Las Vegas physician, wife convicted of fraud in Botox case

By Mary Manning (contact)

Wednesday, Nov. 19, 2008 | 6:46 p.m.

A federal jury today convicted a Las Vegas physician and his wife of fraud for treating patients with a non-FDA approved drug and falsely representing to their patients that they were receiving a federally approved facial wrinkle treatment, Botox.

Patients were actually receiving a cheaper, unapproved substance, said U.S. Attorney Greg Brower of Nevada.

Following a two-week trial, Stephen Lee Seldon, 53, and Deborah Martinez Seldon, 41, were convicted of 14 counts of mail fraud and one count of adulterating a drug while held for sale. They were indicted in June 2007.

"Doctor Seldon's patients were exposed to potentially very severe health risks, including botulism poisoning," Brower said. "Patients should be able to trust their medical care providers to be honest with them and to do their best to 'do no harm.'"

The Nevada State Board of Medical Examiners Web site lists Dr. Stephen Lee Seldon as a practicing physician. The state issued Seldon a license on Feb. 2, 1995, according to the board's posted information. No disciplinary actions by the board are listed against him.

From 2003 to 2005, Stephen Seldon, who is a licensed medical doctor in Nevada, and Deborah Martinez Seldon, his wife and business partner, operated the medical practice, "A New You Medical Aesthetics (A New You)," at 3663 E. Sunset Road, Suite 303, in Las Vegas, according to court records and evidence introduced at the trial.

From about Oct. 15, 2003, to Sept. 16, 2005, the Seldons offered and advertised Botox injections at "A New You." Botox, used for the treatment of forehead wrinkles and excessive perspiration, is the brand name of a drug derived from Botulinum neurotoxin Type A, a highly potent toxin.

When present at certain levels in humans, this toxin derived from a bacteria can cause botulism, a deadly toxin. The toxin is classified as both a drug and biological product under federal law. No form may be distributed for use on humans unless it has been approved by the Federal Drug Administration.

Allergan, Inc., is the only FDA-approved manufacturer of Botox, meaning all doctors treating patients with Botulinum neurotoxin Type A are required to use Allergan's Botox products.

The Seldons placed ads in local magazines offering Botox at low prices, and represented to their patients that Stephen Seldon was certified and specially trained by Allergan for Botox injections. The Seldons also had patients sign consent forms before receiving cosmetic procedures. The forms fraudulently stated that the defendants intended to use Botox on the patients, when in fact, Stephen Seldon knew he was going to inject his patients with cheaper Botox alternatives.

The evidence demonstrated that patients weren't receiving FDA-approved Botox at "A New You." Instead, the Seldons purchased and unlawfully used on their patients an unapproved Botulinum product marketed and sold by Toxin Research International, Inc., of Tucson, Ariz. That product, Tritox, was sold in vials labeled, "For research purposes only, not for human use." TRI charged customers much less for Tritox than Allergan charged for Botox.

In late November 2004, four people in Florida contracted botulism after receiving injections of Tritox at a Florida medical clinic. An investigation began, and as a result, the principal owners of TRI, Chad Livdahl and Zahra Karim, were charged and convicted of conspiracy and mail fraud in federal court in Florida for unlawfully selling almost $2 million of Tritox to physicians. They are now serving lengthy prison sentences.

The evidence in the Las Vegas case showed the Seldons made a secret purchased of $50,000 worth of Tritox less than two months after the four people in Florida became sick and after search warrants had been executed at TRI's business in Tucson.

The evidence also demonstrated that the Seldons took steps to conceal their fraudulent use of the cheaper alternative product by falsifying computerized records at "A New You" and by making false statements to their patients.

Stephen and Deborah Seldon are scheduled to be sentenced Feb. 18. They face up to 20 years in prison and a $250,000 fine on each mail fraud count and up to one year in prison and a $100,000 fine on the misbranding a drug count.

They have been released on personal recognizance bonds pending sentencing.

The case is being investigated by the FDA's Office of Criminal Investigations and the U.S. Postal Inspection Service, with assistance from the U.S. Immigration and Customs Enforcement. Assistant U.S. Attorneys Crane M. Pomerantz and Christina Brown are prosecuting this case.