DOJ: Michigan Man Sentenced for Unlawfully Importing and Distributing Misbranded Drugs

Matthew Dailey, 36, of Royal Oak, Michigan, was sentenced today to two years in prison for illegally importing kratom—a powerful psychoactive substance—and selling it unlawfully through unapproved claims that it could treat serious diseases and medical conditions, including opiate withdrawal symptoms, the Department of Justice announced. 

Dailey pleaded guilty on Jan. 8 in the Eastern District of Michigan to one count of introducing misbranded drugs into interstate commerce and one count of importing merchandise contrary to law. As part of his plea, Dailey agreed to forfeit $1,000,000 in illegal proceeds.  Today, Judge Judith E. Levy of the Eastern District of Michigan sentenced Dailey to serve two years in prison, followed by three years supervised release.

Dailey was the owner and operator of Nomad Botanicals, an online business that sold kratom, which is made from the leaves of a tree indigenous to Southeast Asia, to consumers throughout the United States. In pleading guilty, Dailey admitted that he sold kratom with the intention that it be used as a drug to treat a variety of diseases, including chronic pain, Lyme disease, rheumatoid arthritis, and fibromyalgia. Dailey also widely distributed kratom as an opiate withdrawal drug, and as a substitute for drugs of abuse and prescription pills. Dailey further admitted that to circumvent the United States Food and Drug Administration’s (FDA) regulation of drugs under the federal Food, Drug, and Cosmetic Act (FDCA), Dailey knowingly and fraudulently portrayed his kratom products to the FDA as “incense,” “paint pigment,” and other substances not intended for human consumption. By deceiving the FDA in this manner, Dailey was able to import several tons of kratom into the United States.

“We will not tolerate the importation or misbranding of drugs and other products without proper regulatory approvals,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “The Department of Justice will continue to work with the FDA to ensure that drug distributors do not put consumers at risk by circumventing their obligations under the Food, Drug, and Cosmetic Act.”

As part of his plea agreement, Dailey further admitted that he repackaged and labeled the illegally imported kratom in his residence, which he did not register as a facility that manufactured, prepared, and processed drugs, as required under the FDCA. Dailey then sold and shipped kratom products to consumers throughout the United States for use as a drug without providing any directions for use, such as indications, dosage instructions, methods of administration, or contraindications. 

This case was prosecuted by Trial Attorneys Clint Narver and Jocelyn Hines of the Department of Justice’s Consumer Protection Branch. The prosecution was assisted by Assistant U.S. Attorney Adriana Dydell of the United States Attorney’s Office for the Eastern District of Michigan. The case was investigated by the FDA’s Office of Criminal Investigations.

For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch.

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