Gabriel Letizia Jr., whose AMA Laboratories Inc. in New City pocketed $46.2 million in fees for fabricated test results on sunscreen products and cosmetics, was sentenced May 18 to five years in federal prison.
Letizia, 72, pled guilty last year, after three years of vigorously denying wrongdoing, to charges of conspiracy to defraud his customers and misbranding drugs.
U.S. District Court Judge Kenneth M. Karas also sentenced him to 3 years of supervised release after incarceration and ordered him to pay $1.44 million in restitution to clients who have claimed losses and to forfeit $46.2 million in ill-gotten gains.
The feds, however, are pessimistic about finding the money.
The U.S. Probation office reported that the government has been unable to track down significant assets, according to a sentencing memorandum by prosecutors, and concluded that the “staggering loss … will likely not be repaid or recovered.”
The prosecutors noted in the May 11 memo that Letizia “has made no effort to pay restitution to his victims, appears to have spent or hidden almost all of the substantial assets he once held, and continues to conceal assets.”
Letizia founded AMA labs in 1982 to test cosmetics and drugs for safety and efficacy. Companies that made sunscreen products, for instance, hired the lab to test for SPF, or sun protection factor, that customers rely on to protect themselves from exposure to the sun.
But for 30 years, from 1987 to 2017, AMA employees working under Letizia’s direction used fewer test panelists for which the clients had paid. Instead of testing a product on 50 people, for example, AMA used fewer than 20.
AMA then falsified the test results by suppressing adverse reactions and including fictitious data for the phantom panelists.
Letizia had agreed to a plea deal with prosecutors to serve up to 7 years in prison, as calculated by non-binding sentencing guidelines.
But Letizia’s lawyers — Frederick P. Hafetz of Manhattan and George Weinbaum of Scottsdale, Arizona — urged the court to sentence him to home confinement or, alternatively, to no more than a year in prison.
Letizia, they argued, has lived an “extraordinary life of good deeds and devotion to the well-being of others — family, friends, employees, and strangers as well. … He truly saved lives.”
They recounted a Dickensian childhood of abuse at the hands of his mentally unstable, alcoholic mother. Despite the harrowing circumstances, at age 12 he saved his mother’s life by administering CPR after she overdosed on barbiturates. After his parents divorced, he took care of his two younger brothers and a sister.
“Gabe was the glue that held our family together,” one brother said in a letter to the court.
His lawyers also argued that “there was no adverse health consequences as a result of his conduct.”
Federal prosecutors asked the court to impose a 7-year prison sentence.
“The true extent of the harm caused by Letizia’s fraud may never be fully known,” assistant prosecutors Jeffrey C. Coffman, James McMahon and Olga I. Zverovich stated in a sentencing memorandum.
The development of skin cancer, for example, may not occur for several years after too much sun exposure.
The prosecutors acknowledged that Letizia lived a harrowing childhood growing up in the Bronx and Mount Vernon, that he demonstrated admirable qualities as a child and that has used some of his wealth to help others.
But the crimes were not momentary lapses in judgement, they argue. They were choices made every business day for 30 years.
“The nature of this offense is greed,” the prosecutors said.
From 2012 to early 2017, he received $8.7 million in salary and distributions. He used AMA funds to buy a $204,000 Mercedes Benz and other luxury vehicles. He traveled to India 18 times.
One of his children told investigators, according to the prosecutors, that Letizia had hidden $1 million in cash in cases behind car tires. The purported stash has never been found.
When he submitted a sworn affidavit of his assets, he declared that AMA “has no value” while concealing $790,000 owed to the company.
“A sentence involving minimal or no prison time,” the prosecutors argued, “would be perceived by the public as a slap on the wrist and would fail to deter anyone from flouting the law and jeopardizing public health for profit.”
The Rockland County District Attorney’s Office, the U.S. Food and Drug Administration, and the FBI assisted in the investigation.
