Case Document 1 Filed 03/26/13 Page 1 of 9 3133971 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF Criminal No. /3?33 (18 U.S.C. 1341 and UNITED STATES OF AMERICA v. 1956(a) (2) 21 U.S.C. 331(a) and 333(a)(2)) ADAM F. HIGDON INDICTMENT The Grand Jury charges: INTRODUCTION At all times material to this Indictment: 1. Under the Federal Food, Drug and Cosmetic Act, 21 U.S.C. 301 e; seg., the term "drug" included any article intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals, or an article (other than food) intended to affect the structure or any function of the body of man or other animals. 21 U.S.C. 321(g)(1). 2. The introduction or delivery for introduction into interstate commerce of any misbranded drug was prohibited. 21 U.S.C. 331(a). "Misbranding" encompassed dispensing without a prescription a drug intended for use by man which, because of its toxicity or potential for harmful effect, was not safe for use except under supervision of a licensed practitioner. 21 U.S.C. 353(b)(1). A drug was also misbranded where its labeling was false or misleading in any particular, 21 U.S.C. 352(a); where its labeling did not bear adequate directions for use, 21 U.S.C. 352(f)(1); or where the drug was manufactured, prepared, Case Document 1 Filed 03/26/13 Page 2 of 9 propagated, compounded or processed in an establishment not registered with the Secretary of Health and Human Services, 21 U.S.C. 352(0). The introduction or delivery for introduction into interstate commerce of 51 misbranded (drug' with intent to defraud or mislead was a felony. 21 U.S.C. 333(a)(2). 3. "Peptides" were chemical compounds containing 2 or more amino acids linked by the carboxyl group of 1 amino acid and the amino group of another. (Webster's II New College Dictionary, 3d Ed. 2005.) Due to their toxicity or potential for harmful effect, peptides could not be dispensed for human use without a prescription from a licensed medical practitioner. 4. There was an illegitimate market for peptides among body builders and others who engaged in weight training, since it was believed that the tuna of these substances enhanced muscle development. 5. Illegal distribution of peptides was facilitated by use of the Internet, through which such substances could be sold without a prescription.by sources in other countries, including the People's Republic of China. 6. The Food and Drug Administration (FDA) monitored web?sites to ensure that the distribution of prescription drugs was in compliance with the law. 7. Web?site hosts which operated in the United States often monitored web?sites which offered the sale of drugs, and Case Document 1 Filed 03/26/13 Page 3 of 9 would shut down those sites that engaged in illegal activity, including the distribution of prescription drugs without a valid prescription. 8. Go Daddy was a web?site host which, in its Universal Terms of Service Agreement, barred subscribers from any use of its Site and Services which: was illegal or promoted or encouraged illegal activity; promoted, encouraged or engaged in the sale or distribution of prescription medication without a valid prescription; and contained any false or deceptive language. Go Daddy reserved the right remove any itenlcif user content which violated its Terms of Service Agreement. 9. The defendant, ADAM F. HIGDON, was the owner of Amino Outpost at 145 S. Pine St., Palatine, Illinois 60067, and subscribed to the Go Daddy web?site He also maintained.a Google email account at aminooutpost@qmail.cowu Prior to 4/20/10, when he transferred it to RJD (an individual known to the grand jury), ADAM F. HIGDON also subscribed to the Go Daddy web?site THE SCHEME AND ARTIFICE 10. From in and around January of 2010, and continuing thereafter to on. or about February 16, 2011, in the Western District of the Northern District of Illinois, and elsewhere, the defendant, ADAM F. HIGDON, did knowingly and intentionally devise and intend to devise a scheme and artifice to Case Document 1 Filed 03/26/13 Page 4 of 9 defraud and for obtaining money and property by means of false and fraudulent pretenses, representations and promises, which scheme and artifice was in sum and substance as follows: 11. It was a part of the scheme and artifice that ADAM F. HIGDON engaged in the illegal sale of peptides without prescriptions, by advertising such products on the web?site wherein he targeted customers interested in body enhancement. 12. It was further a part of the scheme and artifice that ADAM F. HIGDON used the Go Daddy web?sites and for the illegal sale of peptides. 13. It was further a part of the scheme and artifice that, in order to avoid FDA scrutiny and to assure Go Daddy that he was in compliance with the law, ADAM F. HIGDON posted on his Amino Outpost Go Daddy web?site a "legal disclaimer" which falsely stated that "The chemicals/materials for sale here are intended for laboratory and research use They are not intended for human ingestion or for use in products that may be ingested"; that "Buyer.. warrants to supplier that any Inaterial produced. with products from supplier shall not within the meaning of the Federal Food, Drug and Cosmetic Act"; and that products and services offered are for laboratory and research activities exclusively No jproducts here are to Ibe 'used Case Document 1 Filed 03/26/13 Page 5 of 9 consumption." Prior to its transfer to RJD, ADAM F. HIGDON posted on his Genesis Peptides Go Daddy web-site diSclaimers which falsely stated that all products sold were "intended solely for research purposes"; that they were intended to use as food additives, other inappropriate applications," and that "The products we offer are intended for laboratory/hobbyist research.use only The purchaser further warrants that any material produced with any product shall not be adulterated or misbranded within the meaning of the Federal Food, Drug and Cosmetic 14. It was further a part of the scheme and artifice that the above-described disclaimers were facades which were designed to deceive the FDA and Go Daddy, and which both ADAM F. HIGDON and his customers knew to be false and fraudulent. 15. It was further a part of the scheme and artifice that, when contacted via prospective sales, ADAM F. HIGDON would provide e?mail replies describing the benefits of his products for burning fat and tanning in preparation for body building shows. On occasion when a customer sought Specific directions for peptide usage, HIGDON would reply that he sells only for research but the information the customer sought was easy to find. 16. It was further a part of the scheme and artifice that ADAM F. HIGDON maintained business addresses at 21720 W. Long Grove Road, Deer Park, IL, box 415, and at 1935 S. Plum Grove Rd, Case Document 1 Filed 03/26/13 Page 6 of 9 Palatine, IL, box 219, which addresses were nothing more than rented mailboxes at UPS stores. 17. It was further a part of the scheme and artifice that ADAM F. HIGDON maintained accounts numbered and in his own name, and account number in the name IXOYC Inc., all at JP Morgan Chase Bank, NA. 18. It was further a part of the scheme and artifice that ADAM F. HIGDON obtained peptides from sources in the People's Republic of China, and made payments to his drug suppliers through accounts numbered and It was further a part of the scheme and artifice that, in order to pay for the drugs he purchased, during the period from 1/19/10 to 9/7/10, ADAM F. HIGDON paid $62,963 (in 42 wire transfers) from account number during the period from 1/8/10 to 6/17/10, he paid $8,669.50 (in 11 wires) from account number and during the period from 1/19/10 to 1/24/11, he transferred $59,840 (in 35 wires) from account number for a total of $131,472.50 (in 88 wires) all to payees in China. 19. It was further a part of the scheme and artifice that, during the year 2010, ADAM F. HIGDON, obtained $397,662 in gross receipts from Amino Outpost and Genesis Peptides sales. THE MAILING 20. On or about January 12, 2011, in the Western District of and elsewhere, for the purpose of Case Document 1 Filed 03/26/13 Page 7 of 9 executing the aforesaid scheme and artifice to defraud, and for obtaining money and property by means of false and fraudulent pretenses, representations and promises, and attempting to do so, the defendant, ADAM F. HIGDON, did knowingly cause peptides to be delivered Inf commercial interstate carrier, that ii; UPS parcel addressed from IXOYC Research, Francis Higdon, 1935 S. Plum Grove Rd., Palatine, IL 60067 to Sean Flair, 20436 Route 19, Suite 620?158, Cranberry Township, PA 16066, which parcel contained 3 vials of Sermorelin, vial of Melanotan II, 4 vials of GHRP-6, and vial of PT?l4l, each of which was labeled "Research Purposes Only." In violation of Title 18, United States Code, Section 1341. Case Document 1 Filed 03/26/13 Page 8 of 9 COUNT TWO The Grand Jury further charges: 21. Paragraphs 1 through 20 of Count One are incorporated herein as if fully set forth. 22. On or about January 12, 2011, in the Western District of and elsewhere, the defendant, ADAM F. HIGDON, with the intent to defraud and mislead, did cause the introduction into interstate commerce from Palatine, Illinois to Cranberry Township, of peptide drugs, that is 3 vials of "Sermorelin (2 1 vial of "Melanotan 4 vials of and vial of (10 all of which were misbranded in one or more of the following ways: under Title 21, United States Code, Section 352(a), in that their labeling was false and misleading in any particular; under Title 21, United States Code, Section 352(f)(1), in that their labeling lacked adequate directions for their use; and under Title 21, United States Code, Section 353(b) in that they were prescription drugs dispensed without a valid prescription from a licensed medical practitioner. All in violation of Title 21, United States Code, Sections 331(a) and 333(a)(2). Case Document 1 Filed 03/26/13 Page 9 of 9 COUNT THREE The Grand Jury further charges: From on or about January 8, 2010, and continuing thereafter to on. or about January 24, 2011, in the Northern District of Illinois and elsewhere, the defendant, ADAM F. HIGDON, did transmit and transfer monetary instruments and funds from a place in the United States to a place outside the United States, with the intent to promote the carrying on of specified unlawful activity, that is, ADAM F. HIGDON sent from Illinois 88 wire transfers totaling $131,472.50, to various payees in the People's Republic of China, from JP Morgan Chase Bank NA, accounts numbered and all for the purpose of promoting the scheme and artifice to defraud, in violation of Title 18, United States Code, Section 1341, set forth in Count 1 of this Indictment. In violation of Title 18, United States Code, Section 1956(a) (2) (A). A True Bill, d/nA/%W FORETERSON SW: HICKTON United States Attorney PA ID NO. 34524 Case Document 1-1 Filed 03/26/13 Page 1 of 1 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF Criminal No. 25:3; UNITED STATES OF AMERICA V. ADAM F. HIGDON CERTIFICATION AND NOTICE FOR FILING PRETRIAL MOTIONS I hereby certify that I have been notified by the United States Magistrate Judge that all pretrial motions must be filed within fourteen (14) days of Arraignment unless the Court extends the time upon written application made within said fourteen (14) day period. Date Attorney for Defendant ADAM F. HIGDON Case Document 1-2 Filed 03/26/13 Page 1 of 1 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF Criminal No. UNITED STATES OF AMERICA V. ADAM F. HIGDON ARRAIGNMENT PLEA Defendant Adam F. Higdon being arraigned, pleads in open Court this day of (Defendant's Signature) (Attorney for Defendant) Case Document 1-3 Filed 03/26/13 Page 1 of 2 CRIMINAL CASE INFORMATION SHEET Pittsburgh Erie Johnstown [g #83 Related to No. 12?29 Criminal Judge Donetta Ambrose (All criminal prosecutions arising out of the same criminal transaction or series of transactions are deemed related). CATEGORY: l. Narcotics and Other Controlled Substances 1a. Narcotics and Other Controlled Substances (3 or more Defendants) 2. Fraud and Property Offenses 2a Fraud and Property Offenses (3 or more Defendants) 3. Crimes of Violence 4. Sex Offenses 5. Firearms and Explosives 6. Immigration 7. All Others Defendant's name: Adam F. Hiqdon Is Indictment waived: yes no Pretrial Diversion: yes no Juvenile proceeding: yes no Defendant is: Male Female Superseding Indictment or Information: yes no Previous case number: If superseding, previous case was/will be: Dismissed on defendant's motion Dismissed on government's motion After appellate action Other (explain) County in which first offense cited occurred: Butler Previous proceedings before Magistrate Judge: Case No.: PLEASE INCORPORATE MAGISTRATE CASE WITH CRIMINAL CASE Case Document 1-3 Filed 03/26/13 Page 2 of 2 Date arrested or date continuous U.S. custody began: Defendant: is in custody is not in custody Name of Institution: Custody is on: this charge another charge another conviction State Federal Detainer filed: yes no Date detainer filed: Total defendants: 1 Total counts: 3 Data below applies to defendant No.: 1 Defendant's name: Adam F. Hiqdon SUMMARY OF COUNTS COUNT NO. U.S. CODE OFFENSE FELONY 1 l8 U.S.C. 1341 Mail Fraud 2 21 U.S.C. 331(a) 333(a)(2) Misbranding of Drugs 3 18 U.S.C. 1956(a)(2)(A) Money Laundering I certify that to the best of my knowledge the above entries are true and correct. DATE: March 26, 2013 MW LEO M. Assistant U.S. Attorney PA ID NO. 25806