Kansas Woman Convicted of Tax Evasion Also Faces Counterfeit Drug Charges

Example of counterfeit Botox courtesy USFDA.

The former owner of a Leawood, Kansas business, Midwest Medical Aesthetics, has been charged with importation of misbranded drugs. Kathleen Stegman has been charged with illegally importing $194,000 worth of non-FDA approved “Botox,” Dysport,” “Restylane,” “Perlane,” and “Sculptra,” according to the Food and Drug Administration (FDA).

Stegman is currently serving 51 months in prison after being convicted of tax evasion in an last October, reports the Department of Justice (DOJ).  From 2006 through 2010, “Stegman concealed cash receipts, diverted hundreds of thousands of dollars from Midwest for her personal use, created and used an entity to falsify business expenses and hide Midwest customer checks and falsely claimed as business expenses a mortgage payment on an investment property, the cost of an invisible dog fence, residential gas and electricity bills, Mercedes Benz lease payments and an investment in a deck coating product,” according to the DOJ.

The DOJ also reports that she used money diverted from her business to create a lavish lifestyle for herself, including buying real estate in Las Vegas and North Carolina, investment in gold coins, and the purchase of a 54-foot yacht.

Her tax evasion case proved that Stegman made an “employee destroy business records during a civil tax audit, provided the Internal Revenue Service (IRS) with false and altered documents and attempted to tamper with a witness’s statement to criminal investigators,” the DOJ reports.

If Stegman is convicted on misbranded drug importation charges, she will face up to three years in federal prison, and fines upwards of $250,000 in and additional forfeiture, according to the FDA.

The Food and Drug Administration’s Office of Criminal Investigation investigated this case. Assistant U.S. Attorney Tanya Treadway is prosecuting.