Gabriel Letizia Jr., the owner and executive director of AMA Laboratories, Inc. (“AMA”), a consumer product testing company based in Rockland County, New York, has been sentenced to 60 months in federal prison (5 years) for fraud scheme involving fabricated test results.
“For three decades, Gabriel Letizia defrauded AMA’s customers and jeopardized the safety of millions of consumers, all in the name of greed,” said U.S. Attorney Damian Williams.
Letizia began operating AMA in the early 1980s, and became its sole owner in approximately 2003. AMA purported to test the safety and efficacy of cosmetics, sunscreens, and other products on specified numbers of volunteer panelists for consumer products companies. Clients of AMA used the test results to support their claims that their products were safe, effective, hypoallergenic, or provided a certain Sun Protection Factor (“SPF”), including after exposure to water. AMA clients that manufactured sunscreens used the test results to comply with FDA regulations requiring sunscreen manufacturers to have their products tested and to maintain the test results for possible review by the FDA.
From 1987 through April 2017, Letizia and AMA personnel operating at his direction defrauded AMA’s customers of more than USD 46 million by testing products on materially lower numbers of panelists than the numbers specified and paid for by AMA’s customers.
According to AMA employees, the majority of AMA’s tests contained fraudulent results, for two reasons:
First, at Letizia’s instruction, AMA personnel rarely tested products on the number of panelists requested by AMA’s clients. Instead, AMA tested products on a far lower number of panelists, typically 20 or less, rather than the 50 for which the clients had paid. AMA’s fees for tests were based, in part, on the number of panelists that were to participate in the study. At Letizia’s direction, AMA sent its clients fraudulent test results in which AMA personnel included fictitious data for “phantom” panelists who had not actually participated in the tests.
Second, at Letizia’s direction, AMA personnel routinely falsified test results relating to its clients’ products, which included suppressing adverse reactions and deviating from testing protocols.
According to the court, from 2012 through April 2017, AMA received USD 46.2 million in revenue from the fraudulent reports.
In addition to his prison term, Letizia, 72, was sentenced to three years of supervised release, restitution in the amount of USD 1,440,238, and forfeiture in the amount of USD 46,200,000.