The owner of AMA Laboratories, a US consumer products testing business, has been arrested for his alleged participation in a scheme to cheat customers out of substantial sums of cash.
Gabriel Letizia Jr was charged with one count of conspiracy to commit wire fraud and one count of wire fraud, which refers to financial fraud involving the use of telecommunications or information technology.
For more then 30 years, AMA, based in Rockland County, New York, has tested the safety and efficacy of cosmetics, sunscreens and other products on specified numbers of volunteer panellists for a range of consumer product companies.
From 1987 to 2017, Letizia, AMA’s owner and Executive Director, along with other senior staff members defrauded AMA customers out of tens of millions of dollars by testing products on materially lower numbers of panellists than specified or paid for by its customers, according to the indictment.
AMA employees acting under Letizia’s direction are said to have sent customers fraudulent reports, which falsely represented to customers that AMA had tested their products on the number of panellists specified by the customers. They also made materially false and misleading statements about the results of the tests to AMA customers.
Letizia, aged 69, was arrested on 9 August. He pleaded not guilty to both charges in federal court in White Plains, and US Magistrate Judge Paul E Davison released him on a US$500,000 bond, secured by the AMA property on Congers Road in New City. The two charges – wire fraud and conspiracy – carry a maximum prison sentence of 20 years each.
Other AMA employees have already pled guilty to various charges of fraud.
David Winnie, who served as Technical Director, pled guilty on 23 May 2019 to one count of conspiracy to commit wire fraud and one count of wire fraud; Mayya Tatsene, who served as AMA’s Clinical Laboratory Director, pled guilty on 29 May 2019 to one count of conspiracy to commit wire fraud and one count of wire fraud; Patrycja Wojitowicz, who served as AMA’s Associate Director of Clinical Studies, pled guilty on 12 June 2019 to one count of conspiracy to commit wire fraud and one count of wire fraud; and Kaityln Gold, who served as AMA’s Supervising Laboratory Technician, pled guilty on 24 June 2019 to one count of conspiracy to commit wire fraud and one count of wire fraud.
Commenting on the case, Geoffrey S Berman, the United States Attorney for the Southern District of New York, said: “AMA Laboratories, a consumer products testing company, tested consumer products for other companies that relied on AMA for genuine, accurate test results in order to safely bring their products to the consumer market. Unbeknownst to them, AMA’s owner, Gabriel Letizia, and others were engaged in a scheme to falsify those crucial test results by testing their products on far fewer panellists than they reported.
"Letizia and his co-defendants’ scheme not only cost the victim companies millions, they endangered the safety of thousands of consumers.”
The Director of the FDA Office of Criminal Investigations, Catherine A Hermsen, added: “Honest reporting of product testing is vital for ensuring the safety of drugs and cosmetics for US consumers. When companies and individuals engage in criminal activity that puts the public health at risk, FDA will work to investigate and bring them to justice.”