Two Tucsonans who made more than $1.7 million selling knockoff Botox to hundreds of doctors were sentenced to prison Thursday by a federal judge in Fort Lauderdale, Fla.
Chad Livdahl, the 34-year-old president of Toxin Research International Inc. and three affiliate companies, was sentenced to nine years in prison by U.S. District Judge James Cohn.
Cohn sentenced Livdahl's wife, 34-year-old Zahra Karim, to almost six years in prison, but she will likely serve less than two years because she will be transferred to her native Canada and be eligible for early release, her attorney said.
The couple, both naturopathic physicians, pleaded guilty in November to fraud and conspiracy charges stemming from their shipments of botulinum toxin type A to more than 200 doctors around the country, making more than $1.7 million. The cheaper alternative to brand-name Botox was used on an estimated 1,000 patients, most of whom thought they were getting the genuine product made by Allergan Inc., according to court documents.
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The botulinum toxin sold at physician workshops and conferences by Livdahl and Karim and their Tucson-based company, Toxin Research, was not approved by the U.S. Food and Drug Administration for use on people and bore labels saying it was for research only, court documents show.
Karim told Cohn she regretted her actions.
"This was all a big mistake, which I so sincerely wish I could undo, but I can't," she said.
In November, Cohn granted a federal request for Livdahl, Karim and the corporate entities to forfeit their assets, including $230,000 of equity in the couple's $750,000 Tucson home on the 5000 block of North Avenida de la Colina, on the far Northeast Side; $600,000 in cashiers' checks issued on a Toxin Research account; more than $40,000 in corporate accounts of Powderz Inc. and the Cosmetic Pharmacy; and $5,000 in proceeds from the sale of "clean room" equipment and shelving from their offices at 3280 E. Hemisphere Loop.
Livdahl and Karim are also responsible for paying restitution to the U.S. government of more than $345,000.
In addition, both still face losing their naturopathic physicians' licenses, said Craig Runbeck, executive director of the Naturopathic Physicians Board of Medical Examiners. The board will discuss revoking the couple's licenses at its Feb. 9 meeting.
"I'm hopeful they'll just surrender their license. If they decide they don't want to, we may have to go through a revocation process. They're pretty much toast, as far as their license goes," Runbeck said.
The board investigated a complaint filed in January 2005 by a woman who claimed she attended a November 2004 "Botox party" at a Tucson home, where Karim injected a wrinkle treatment between her eyebrows for $200. The woman, whose identity was not reported, did not report any side effects. The complaint was included as an attachment in the federal criminal case.
Karim said she examined the patient, who signed a release form that was later seized by federal investigators during a search of her office on the city's South Side. The office north of Tucson International Airport housed at least some operations for the couple's four companies that were also named in the indictment.
A woman at that office who would not give her name said the business was no longer affiliated with Livdahl or Karim and was "under new management."
Some of the corporate entities named in the indictment have dissolved or face dissolution in the near future.
Z Spa Inc., named in the federal indictment, was administratively dissolved in March by the Arizona Corporation Commission. The commission may also dissolve Toxin Research International for not filing an annual report last year. Livdahl also transferred power of attorney for Powderz, Inc. to Todd Livdahl, his brother. Todd Livdahl could not be reached for comment.
Also sentenced Thursday was University of Kentucky ophthalmologist Robert Baker, who pleaded guilty to charges that he helped distribute the unapproved drug.
On Wednesday, Fort Lauderdale-based Dr. Bach McComb, a Toxin Research customer, was sentenced to three years for use of an unapproved drug. In late November 2004, McComb injected himself and three others with knockoff Botox that had not been properly diluted, causing botulism poisoning and nearly killing all four of them.