Case 2:14-cr JC Document 41 Filed 04/13/15 Page 1 of 15 Page ID #:100

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1 Case 2:14-cr JC Document 41 Filed 04/13/15 Page 1 of 15 Page ID #:100 1 ANDRE BIROTTE JR. United States Attorney 2 ROBERT E. DUGDALE '.Assistant United States Attorney 3 Chief, Criminal Division AMANDA M. BETTINELLI (Cal. Bar No ) 4 Assistant United States Attorney Environmental Crimes Section United States Courthouse 312 North Spring Street 6 Los Angeles, California Telephone: (213) Facsimile: (213) amanda.bettinelli@usdoj.gov 8 Attorneys for Plaintiff 9 UNITED STATES OF AMERICA 10 UNITED STATES DISTRICT COURT 11 FOR THE CENTRAL DISTRICT OF CALIFORNIA 12 UNITED STATES OF AMERICA, No. CR JC 13 Plaintiff, PLEA AGREEMENT FOR DEFENDANT HTS 14 GENERAL, INC. v. 15 HTS GENERAL, INC., 16 dba "Halloween Superstore," 17 Defendant This constitutes the plea agreement between HTS General, 20 Inc., a California corporation, doing business as "Halloween 21 >Superstore," ("defendant") and the United States Attorney's Office 22 for the Central District of California ("the USAO") in the above- 23 captioned case. This agreement is limited to the USAO and cannot 24 bind any other federal, state, local, or foreign prosecuting, 25 enforcement, administrative, or regulatory authorities. 26 ) I 11 1

2 Case 2:14-cr JC Document 41 Filed 04/13/15 Page 2 of 15 Page ID #:101 1 RULE ll(c) (1) (C) AGREEMENT 2 1. Defendant understands that this agreement is entered into 3 pursuant to Federal Rule of Criminal Procedure ll(c) (1) (C). 4 Accordingly, defendant understands that, if the court determines 5 that it will not accept this agreement, absent a breach of this 6 ~agreement by defendant prior to that determination and whether or 7 not defendant elects to withdraw any guilty plea entered pursuant to 8 this agreement, this agreement will, with the exception of paragraph 9 18 below, be rendered null and void and both defendant and the USAO 10 will be relieved of their obligations under this agreement. 11 Defendant agrees, however, that if defendant breaches this agreement 12 prior to the court's determination whether or not to accept this 13 agreement, the breach provisions of this agreement, paragraphs and 21 below, will control, with the result that defendant will not 15 ~e able to withdraw any guilty plea entered pursuant to this 16 agreement, the USAO will be relieved of all of its obligations under 17 this agreement, and the court's failure to follow any recommendation 18 or request regarding the sentence set forth in this agreement will 19 not provide a basis for defendant to withdraw defendant's guilty 20 ~plea. 21 DEFENDANT'S OBLIGATIONS Defendant agrees to: a) At the earliest opportunity requested by the USAO and 24 provided by the Court, appear and plead guilty to the single-count 25 information in United States v. HTS GENERAL, Inc., CR JC, 26 which charges defendant with misbranding of a device while held for 27 sale after shipment in interstate commerce, in violation of 21 2

3 Case 2:14-cr JC Document 41 Filed 04/13/15 Page 3 of 15 Page ID #:102 1 U. S. C ( k), (a) ( 1 ), ( f ), 21 C. F. R O 9, and ( 2 ) 2 causing an act to be done, in violation of 18 U.S.C b) c) Not contest facts agreed to in this agreement. Abide by all agreements regarding sentencing 5 ~contained in this agreement. 6 d) Appear for all court appearances, surrender as 7 ordered for service of sentence, obey all conditions of any bond, 8 and obey any other ongoing court order in this matter. 9 e) Not commit any crime; however, offenses that would be 10 excluded for sentencing purposes under United States Sentencing 11 Guidelines ("U.S.S.G." or "Sentencing Guidelines") 4Al.2(c) are 12 not within the scope of this agreement. 13 f) Be truthful at all times with Pretrial Services, the 14.. United States Probation Office, and the Court. 15 g) Pay the fine set forth in paragraph 11 of this 16 agreement at or before the date of entry of judgment in this case. 17 h) Pay the applicable special assessments at or before 18 the time of sentencing unless defendant lacks the ability to pay and ~ 19 prior to sentencing submits a completed financial statement on a 20 form to be provided by the USAO Defendant further agrees to execute the California 22 Department of Public Health and the Food and Drug Administration 23 voluntary abandonment and destruction forms for any prescription 24 contact lenses seized during the investigation of the business 25 location on or about October 14, THE USAO'S OBLIGATIONS The USAO agrees to: 3

4 Case 2:14-cr JC Document 41 Filed 04/13/15 Page 4 of 15 Page ID #: a) b) Not contest facts agreed to in this agreement. Abide by all agreements regarding sentencing 3 contained in this agreement. 4 CORPORATE AUTHORIZATION 5 5. Defendant represents that it is authorized to enter into 6 this Agreement. On or before the date of entry of this Agreement, 7 defendant shall provide to the USAO and the Court a notarized legal 8 document certifying that defendant is authorized to enter into and ~ 9 comply with all of the provisions of this Agreement. Such corporate 10 resolution shall designate a corporate representative authorized to 11 take these actions, and that all corporate formalities for such 12 authorizations have been observed. 13 ~ ORGANIZATIONAL CHANGES AND APPLICABILITY This Agreement shall bind defendant, its successor 15 corporation, if any, and any other person or entity that assumes the 16 liabilities contained herein ("successor-in-interest"). Defendant, 17 or its successors-in-interest, if applicable, shall provide the USAO 18 and the United States Probation Office for the Central District of 19 California with immediate notice of any name change, business 20 reorganization, sale or purchase of assets, divestiture of assets, 21 or similar action impacting their ability to pay the fine or 22 affecting this Agreement. No change in name, change in corporate or 23 individual control, business reorganization, change in ownership, 24 merger, change of legal status, sale or purchase of assets, or 25 similar action shall alter defendant's responsibilities under this 26 Agreement. Defendant shall not engage in any action to seek to 27 ~avoid the obligations and conditions set forth in this Agreement. 4

5 Case 2:14-cr JC Document 41 Filed 04/13/15 Page 5 of 15 Page ID #: RESPONDEAT SUPERIOR The parties stipulate and agree that under well- 3 4 established principles of corporate liability and respondeat 4 superior, as these principles apply in this case, defendant is 5 liable for the actions of its agents and employees. New York 6 Central and Hudson River R.R. v. United States, 212 U.S. 481, (1909); United States v. Beusch, 596 F.2d 871, (9th Cir ); United States v. Hilton Hotels Corporation, 467 F.2d 1000, (9th Cir. 1972). 10 NATURE OF THE OFFENSES Defendant understands that for defendant to be guilty of 12 -the crime charged in the information~ that is, misbranding a medical 13 device while held for sale after shipment in interstate commerce, in 14 violation of Title 21, United States Codes, Section 331(k), (a) (1), and 352 (f), Title 21, Code of Federal Regulations, 16 Section , and Title 18, Code of Federal Regulations, Section (b), the following must be true: (1) defendant did hold 18 prescription contact lenses for sale after shipment in interstate 19 commerce; and (2)defendant sold such prescription contact lenses 20 without a prescription, thereby causing the contact lenses to be 21 misbranded while held for sale after shipment in interstate 22 commerce. 23 Defendant admits that defendant is, in fact, guilty of this 24 offense as described in the single-count information. 25 PENALTIES 26 '" Defendant understands that the statutory maximum sentence that 27 the Court can impose for misbranding a device while held for sale 5

6 Case 2:14-cr JC Document 41 Filed 04/13/15 Page 6 of 15 Page ID #:105 1 after shipment in interstate commerce, in violation of 21 U.S.C (k), 333(a) (1), 352(f), 353(b) (1), 21 C.F.R , and 18 3 U.S.C. 2(b) is: a five-year period of probation; a fine of 4 $200,000 or twice the gross grain or gross loss resulting from the 5 offense, whichever is greatest; and a mandatory special assessment 6 of $ SUSPENSION/REVOCATION/DEBARMENT 8 Defendant understands that if defendant holds any regulatory 9 license or permit, the conviction in this case may result in the 10 suspension or revocation of such license and/or permit. By this 11 "'Agreement, the USAO makes no representation or promise concerning 12 suspension or debarment of defendant from contracting with the 13 United States or with any office, agency, or department thereof. 14 Suspension and debarment of organizations convicted under various 15 federal environmental protection and criminal statutes is a 16 discretionary administrative action solely within the authority of 17 the federal contracting agencies. 18 FACTUAL BASIS Defendant admits that defendant is, in fact, guilty of the 20 offenses to which defendant is agreeing to plead guilty. Defendant 21 and the USAO agree to the statement of facts provided below and 22 agree that this statement of facts is sufficient to support a plea 23 of guilty to the charges described in this agreement, but is not 24 meant to be a complete recitation of all facts relevant to the 25 underlying criminal conduct or all facts known to either party that 26 relate to that conduct. 27 Beginning on a date unknown and continuing through on or about 6

7 Case 2:14-cr JC Document 41 Filed 04/13/15 Page 7 of 15 Page ID #:106 1 'October 14, 2014, defendant, doing business as "Halloween 2 Superstore," with a retail location in Los Angeles County, within 3 the Central District of California. 4 On or about October 14, 2014, defendant, doing business as 5 "Halloween Store," held approximately two hundred pairs of., 6 prescription contact lenses for sale. These contact lenses, which 7 were "Cleo" brand, were manufactured in Korea. The Cleo contact 8 lens box label said "Rx only" and "Caution: To ensure that your 9 contacts stay comfortable and your vision stay [sic] clear, ask your 10 ~eye-care professional for a valid prescription." 11 On or about October 14, 2014, a Food and Drug Administration 12 investigator purchased one pair of prescription contact lenses from 13 the store manager of HTS General, Inc., namely one pair of "Cleo" 14 brand contact lenses. The investigators were never asked to present 15 a prescription upon purchasing the contact lenses. 16 At all relevant times, defendant knew that prescription contact 17 lenses that it held for sale were being purchased without a 18 prescription. Contact lenses that are sold without a prescription 19 are not properly fitted to the consumer's eyes and may thereby 20 result in corneal abrasion, infection, and blindness. Because of 21 the potential for harmful effect, contact lenses can only be 22 dispensed by prescription. The Food and Drug Administration's 23 sterility testing of the saline solution of contact lenses imported 24 to the United States from Korea, and sold without a prescription, 25 revealed the presence of pathogenic bacterial organisms that can 26 cause blindness. 27 7

8 Case 2:14-cr JC Document 41 Filed 04/13/15 Page 8 of 15 Page ID #: SENTENCING FACTORS 10. Defendant and the USAO agree and stipulate that, pursuant 3 to Sentencing Guidelines 8C2.l and 8C2.10, the sentencing 4 ~guidelines are not applicable in determining the fine for an 5 organization violating statutes relating to the misbranding of a 6 device while held for sale after shipment in interstate commerce 7 (U.S.S.G. 2N2.l). Defendant understands that in determining defendant's set forth in sentence and Guidelines. are advisory sentence, the Court is required to consider the factors 18 U.S.C (a) (1)- (7), including the kinds of sentencing range established under the Sentencing Defendant understands that the Sentencing Guidelines only, that defendant cannot have any expectation of 13 receiving a sentence within the Sentencing Guidelines range, and 14 that after considering the Sentencing Guidelines and the other (a) factors, the Court will be free to exercise its discretion 16 to impose any sentence it finds appropriate up to the maximum set by 17 statute for the crimes of conviction. 18 SENTENCING AGREEMENT The USAO and defendant agree that a total monetary 20 assessment of $2, (including the criminal fine) is both 21 reasonable and appropriate in this case. Pursuant to U.S.S.G. 22 8Dl.1 and 8Dl.2 and the factors set forth in 18 U.S.C. 3553(a), 23 including the nature and circumstances of the offense and the 24 history and characteristics of the defendant, the need for the 25 sentence imposed to reflect the seriousness of the offense, to 26 promote respect for the law, to provide just punishment for the 27 8

9 Case 2:14-cr JC Document 41 Filed 04/13/15 Page 9 of 15 Page ID #:108 1 offense, and to afford adequate deterrence of criminal conduct, the 2 parties agree that defendant shall be sentenced as follows: 3 a) Criminal Fine: Defendant shall pay a criminal fine 4 of $2, The criminal fine shall be paid on or before the 5 entry of judgment by certified check (or equivalent) or wire 6 transfer to the Clerk of the United States District Court for the 7 Central District of California in accordance with instructions to be 8 provided by the USAO. 9 b) Mandatory Special Assessment: Defendant agrees to 10 pay the mandatory special assessment of $125.00, pursuant to U.S.C (a) (1) (B) (iii), to the Clerk of the United States 12,District Court for the Central District of California on the date of 13 sentencing (or as soon thereafter as the Court is able to accept the 14 payment) Pursuant to Federal Rule of Criminal Procedure (c) (1) (A) (ii), the parties request that the Court waive the 17 -~reparation of a pre-sentence report in this matter. The parties 18 further request that the Court sentence defendant at the time its 19 guilty plea is entered pursuant to this Agreement. The Court's 20 decision to require a presentence report or to defer sentencing to a 21 later time will not serve as grounds to withdraw defendant's guilty 22 plea In the event that the Court requires preparation of a pre- 24 sentence report and defers acceptance or rejection of this Agreement 25 until it has reviewed the pre-sentence report pursuant to Federal 26 -Rule of Criminal Procedure ll(c) (3) (A), both defendant and the USAO 2 7 are free to: (a) supplement the facts stipulated to in this 9

10 Case 2:14-cr JC Document 41 Filed 04/13/15 Page 10 of 15 Page ID #:109 1 Agreement by supplying relevant information to the United States 2 '-Probation Office and the Court, and (b) correct any and all factual misstatements relating to the calculation of the sentence. WAIVER OF CONSTITUTIONAL RIGHTS 14. Defendant understands that by pleading guilty, defendant gives up the following rights: a) b) c) The right to persist in a plea of not guilty. The right to a speedy and public trial by jury. The right to be represented by counsel at trial Defendant understands, however, that, defendant retains the right to be represented by counsel at every other stage of the proceeding. 12 d) The right to be presumed innocent and to have the 13 burden of proof placed on the government to prove defendant guilty 14 beyond a reasonable doubt. 15 e) The right to confront and cross-examine witnesses 16 wagainst defendant f) The right to testify and to present evidence on defendant's own behalf and in opposition to the charges, including 19 the right to compel the attendance of witnesses to testify. 20 g) Any and all rights to pursue any affirmative defenses 21 or Fourth Amendment claims, and other pretrial motions that have 22 been filed or could be filed. 23 WAIVER OF APPEAL OF CONVICTION Defendant understands that, with the exception of an 25 appeal based on a claim that defendant's guilty plea was 26 involuntary, by pleading guilty defendant is waiving and giving up 27 10

11 Case 2:14-cr JC Document 41 Filed 04/13/15 Page 11 of 15 Page ID #:110 1 any right to appeal defendant's convictions on the offenses to which 2 defendant is pleading guilty. 3 LIMITED MUTUAL WAIVER OF APPEAL OF SENTENCE Defendant agrees that, provided the Court accepts this 5 specified sentence plea agreement and imposes a sentence consistent 6 ~ith the parties' sentencing agreement set forth in paragraph 11 7 above, defendant gives up the right to appeal any portion of the 8 sentence The USAO agrees that, provided all portions of the 10 sentence are consistent with the parties' sentencing agreement set 11 forth in paragraph 11 above, the USAO gives up its right to appeal 12 any portion of the sentence. 13 RESULT OF WITHDRAWAL OF GUILTY PLEA Defendant agrees that if, after entering a guilty plea 15 pursuant to this agreement, defendant seeks to withdraw and succeeds 16 in withdrawing defendant's guilty pleas on any basis other than a 17 claim and finding that entry into this plea agreement was 18 involuntary, then (a) the USAO will be relieved of all of its 19 obligations under this agreement; and (b) should the USAO choose to 20 ~pursue any charge or any civil, administrative, or regulatory action 21 that was either dismissed or not filed as a result of this 22 agreement, then (i) any applicable statute of limitations will be 23 tolled between the date of defendant's signing of this agreement and 24 the filing commencing any such action; and (ii) defendant waives and 25 gives up all defenses based on the statute of limitations, any claim 26 of pre-indictment delay, or any speedy trial claim with respect to 27 11

12 Case 2:14-cr JC Document 41 Filed 04/13/15 Page 12 of 15 Page ID #:111 1 to criminally prosecute defendant for any crime, including charges 2 that the USAO would otherwise have been obligated to dismiss or not 3 to criminally prosecute pursuant to this agreement. 4 c) The USAO will be free to criminally prosecute 5 defendant for false statement, obstruction of justice, and perjury 6 based on any knowingly false or misleading statement by defendant Following the Court's finding of a knowing breach of this 8 agreement by defendant, should the USAO choose to pursue any charge 9 or any civil, administrative, or regulatory action that was either 10 dismissed or not filed as a result of this agreement, then: 11 a) Defendant agrees that any applicable statute of 12 limitations is tolled between the date of defendant's signing of 13 this agreement and the filing commencing any such action. 14 b) Defendant waives and gives up all defenses based on 15 the statute of limitations, any claim of pre-indictment delay, or 16 any speedy trial claim with respect to any such action, except to 17 the extent that such defenses existed as of the date of defendant's 18 signing this agreement. 19 c) Defendant agrees that: (i) any statements made by 20 defendant, under oath, at the guilty plea hearing (if such a hearing 21 occurred prior to the breach); (ii) the agreed to factual basis 22 statement in this agreement; and (iii) any evidence derived from 23 "such statements, shall be admissible against defendant in any such 24 action against defendant, and defendant waives and gives up any 25 claim under the United States Constitution, any statute, Rule 410 of 26 the Federal Rules of Evidence, Rule ll(f) of the Federal Rules of 27 Criminal Procedure, or any other federal rule, that the statements 13

13 Case 2:14-cr JC Document 41 Filed 04/13/15 Page 13 of 15 Page ID #:112 1 or any evidence derived from the statements should be suppressed or 2 are inadmissible. 3 COURT AND PROBATION OFFICE NOT PARTIES Defendant understands that the Court and the United States 5 Probation Off ice are not parties to this agreement and need not 6 accept any of the USAO's sentencing recommendations or the parties' 7 agreements to facts, sentencing factors, or sentencing. Defendant ' 8 understands that the Court will determine the facts, sentencing 9 factors, and other considerations relevant to sentencing and will 10 decide for itself whether to accept and agree to be bound by this 11 agreement Defendant understands that both defendant and the USAO are 13 free to: (a) supplement the facts by supplying relevant information 14 to the United States Probation Office and the Court, (b) correct any 15 and all factual misstatements relating to the Court's Sentencing 16 Guidelines calculations and determination of sentence, and (c) argue 17 on appeal and collateral review that the Court's Sentencing 18 Guidelines calculations and the sentence it chooses to impose are 19 not error, although each party agrees to maintain its view that the 20 sentence referenced in paragraph 11 is consistent with the facts of 21 this case. While this paragraph permits both the USAO and defendant 22 to submit full and complete factual information to the United States 23 Probation Office and the Court, even if that factual information may 24 be viewed as inconsistent with the facts agreed to in this 25 agreement, this paragraph does not affect defendant's and the USAO's 26 ~obligations not to contest the facts agreed to in this agreement

14 Case 2:14-cr JC Document 41 Filed 04/13/15 Page 14 of 15 Page ID #:113 1 NO ADDI?IONAL _ AGR~EMENTS ? 24. Defendant understands that, exc~pt as set forth herein, 3 there are no promises, understandings, or agreements between the 4 USAO and defendant or defendant's attorney, and that no additional s promise, understand.ing, or agreement may be entered into unless in a 6 writing signed by all parties or on the record in court ,,.,... Lo :J The parties agree that this agreement will be considered part of the.record of defendant's guilty plea hearing as if the entire agreement had been read into tha record of the proceeding. AGREED AND ACCEPTED UNITED STATES ATTORNEY'S OfE'ICE FOR THE CENTRl\L OlS'l'RICT OF CALIFORNil'. ANDRt BIROTTE JR. Un States Attorney i 6 J,,. I Authorized Representative of HTS GENERAL, INC,, doinq business as ~Halloween Superstore" Defendant _r ~-~ PAT HARRIS Attorney fo! Defendant HTS GENERAL, INC., doina business as "Halloween SuperstorB" :.,i J~...;.:; ,~-., - Date 15

15 Case 2:14-cr JC Document 41 Filed 04/13/15 Page 15 of 15 Page ID #:114 1 f.~~j'lf:.f.~_a'i' LON OF _DEFENDANT 2 I am an authorized representative of defendar1l HTS General, 3 Inc., doing business as "Halloween Superstore," 1~defendantu). I 4 understand the terms of this agreement, and I voluntarily agree to S those terms. Defendant's attorney has advised me of defendant's 6 rights, of p<::issible defenses, of the sentencing Gui.del.ine 7 provisions~ and of the consequences of entering into this agreement. 8 No promises or inducements have been made to me other: than tbose 9 contained in this agreement;. No one has threatened or forced me in 10 any way to enter int~ this agreement. Finally, I am satisfied with : the representation provided by defendant's attorney in this matter "_,./?. _'~~-":.. ~ Authorized Representative of HTS GENERAL; INC,, doing business as "Hallow en Superstore" Defendant Date 16 I am HTS General, rnc.'~, doinq business as "Halloween uperstrne," allurney. I tlave ca:retujly ana thorougr1ly discussed every part of this agreement with the authorized representative of defendant. Further, I have fully advised the authorized representative of defendant's rights, of possible defenses, of the Sentencing Guidelines' provisions, and of the consequences of entering into ~his agreement. To my knowledge, the decision of defendant nnd its authorized representative to enter into this r; nl~" Jnformed t-'al' HA~1US Attorney for Defendant HTS GENERAL, INC., doing business as "Halloween Superstoreu and voluntary one. Hi ~ l /). Oate