• New York health regulators say Tiger Medical smuggled alloClae into the state and lied about it.
• A court filing includes photos of boxes piled in the driveway of a New Jersey nurse who regulators allege drove the product to NYC.
• Tiger says only the FDA, not New York State, can regulate alloClae, and denied wrongdoing.

On a blustery December day, nine large white cardboard boxes sat stacked next to a garbage can in the driveway of a New Jersey nurse as a man packed them into the bed of a pickup truck.

Other than a manufacturer's label in the corner and a note that the contents were perishable and shouldn't be frozen, there was no indication they held thousands of dollars' worth of processed cadaver fat. Inside the boxes, state regulators allege, was alloClae, a hot new injectable filler derived from the fat of dead people and headed to high-end cosmetic surgeon practices in New York City.

Photos of the boxes were part of a recent court filing by New York State health officials, who have accused Tiger Medical Holdings, which manufactures and sells alloClae with its affiliates, of "smuggling" the product into New York.

Tiger has said only the Food and Drug Administration has the authority to regulate alloClae, and that FDA rules don't require premarket approval. New York is one of a handful of states that issues permission to store and distribute human tissue, and it claims that Tiger violated those rules by bringing alloClae to market without waiting for approval.

Recent court filings reveal that the state obtained FedEx records, including photos, in an attempt to prove that Tiger organized a scheme to smuggle hundreds of boxes of the product — possibly over $1 million worth — into New York.

The dispute could affect the availability of a product that lets busy C-suiters get a boob job during a lunch break or a butt lift between meetings. Doctors have said the injectable is flying off the shelves, and some have continued to administer it during the state investigation.

Tiger co-CEO Oliver Burckhardt said in a filing on Wednesday that 60 doctors have contacted the company about the fat spat with New York — some worried about the case, but most wanting to buy more alloClae.

Tiger hasn't disputed shipping alloClae through New Jersey, though it has called the state's evidence "unreliable" and "self-serving," and said the allegation of "smuggling" is baseless and inflammatory.

It said the health department kept asking for more information without signaling concerns until last month, and that the company submitted testing data as recently as January to show that alloClae was safe.

Tiger's lawyer, Larry Wood Jr., did not address specific questions from Business Insider, referring a reporter to Tiger's court filings.

Building buzz for alloClae while dealing with regulators

AlloClae hit the market in 2024. It didn't take long for plastic surgeons on Manhattan's Tribeca and Upper East Side to realize the appeal. Their patients wanted a quick touch-up and were willing to pay for the convenience. In small quantities, the product can be injected for under $10,000; in other cases, it can cost up to $100,000 per procedure.

The product is a good fit for "the CEOs, COOs, CCOs that don't want to be away from the boardroom," Douglas Steinbrech, who practices in New York City, Beverly Hills, and Chicago, told Business Insider last year. "They have to go to a lot of meetings that just pop up, and they cannot control when they're going to happen. They can't just clear their schedule to recover for a surgery."

AlloClae was advertised on social media and websites: "Revolutionary," said one clinic. "Pure Gold. On Demand," said another.

In a video posted by a Texas plastic surgery practice, audio of Oprah gifting cars to a screaming audience was dubbed over a man in scrubs pretending to dole out alloClae boxes to employees who wriggled with excitement.

Tiger, which is privately held, said this month that alloClae is experiencing "rapid growth" and the company plans to build a 200-person sales force by the end of 2027 to sell alloClae and a similar product in development, dermaClae, to surgeons, med spas, and other buyers.

When Business Insider spoke to Tiger Aesthetics at the end of last year, the company said it was struggling to keep up with demand. Behind the scenes, it was grappling with more than a shortage.

The company was engaged in a back-and-forth with New York's health department. Between October 2024 and May 2025, the agency sent three letters saying that it could not grant Tiger permission to distribute alloClae in the state.

In July 2025, a health inspector visited two Tiger tissue facilities in Pennsylvania and asked why New York doctors were advertising alloClae. Monica Garcia, the COO of Tiger Aesthetic's parent company, said she was unaware of any shipments to the state and asked what the consequences would be if there were, according to a sworn statement from Joseph Giovannetti, the agency's top investigator.

Garcia, in a sworn statement, said the exchange took place at a Tiger affiliate where employees familiar with alloClae weren't present. She said the inspector didn't ask for follow-up information about alloClae distribution to New York, disputing one of Giovannetti's claims.

Giovannetti said the inspection prompted Tiger to stop shipping alloClae directly to New York and start going through New Jersey and Connecticut.

Despite the letters and inspection, Caroline Van Hove, the president of Tiger Medical Holdings affiliate Tiger Aesthetics, provided reassurances about alloClae to at least one New York plastic surgeon. "We can confirm that the New York Department of Health has not reached out to us in connection with our alloClae product," she wrote in an April 2026 letter seen by Business Insider.

Boxes of alloClae were piled up in a New Jersey driveway

Every week or two, starting no later than September 2025, a new set of white boxes would appear at the clapboard, shuttered home of Robert McGee, a nurse who lived on a cul-de-sac in the central New Jersey town of Tinton Falls, according to FedEx records and a state investigator's statement.

The boxes of alloClae would be stacked next to duffle bags and trash cans in McGee's driveway or on his front porch, according to delivery photos and Giovannetti.

Between September 2025 and April 2026, the company sent over 330 boxes of alloClae to McGee, who loaded them in his pickup, drove them the 50 miles into Manhattan, and dropped them off at more than three dozen plastic surgeons and med spas, Giovannetti said.

McGee did not respond to requests for comment.

In January 2026, the state said in a filing that an unidentified "whistleblower" told regulators what was happening. Three months later, health investigators made an "unannounced inspection" at the office of Dr. Adam Schaffner, a Manhattan plastic surgeon.

Schaffner's paper trail laid out a shift in Tiger's shipping processes. Invoices from July 2025 showed Tiger had sent alloClae directly to his Fifth Avenue office. But starting in August, the month after the inspection, the products were mailed to homes and offices in New Jersey and Connecticut, and employees or Ubers would courier them across state lines, the health department said.

Schaffner, who declined to comment, received at least $95,000 worth of alloClae initially shipped to addresses outside of New York, according to invoices filed in court records.

Some boxes went to the New York City office of plastic surgeon Matthew Schulman, the FedEx records show. In a YouTube video posted last fall, he gleefully unpacked 287.5 cubic centimeters of alloClae as the Pointer Sisters' "I'm So Excited" played in the background. Schulman's name, with McGee's home address, was visible on a shipping label.

If Schulman's boxes were typical — as a review of more than a dozen plastic surgeons' unboxing videos on Instagram suggests — a total of 15,840 cubic centimeters of alloClae could have been sent via McGee's home. The prices on 11 of Schaffner's invoices filed in court average $86.29 per cubic centimeter; at that price, more than $1.3 million worth of alloClae could have been shipped through McGee.

Schulman did not respond to requests for comment.

Tiger has asked that the state's allegations be struck from the court record because, among other things, they argue, the health department could be cherry-picking from its investigative file to benefit their case.

Some New York surgeons are still using alloClae

Doctors who received alloClae say they ordered the product from Tiger and didn't know the route it took.

"He had no idea that this was a challenge, or how stuff was showing up, or any of that," said Ken Sterling, an attorney for Dr. Jason Emer. Sterling said Emer has not been contacted by medical authorities.

Samira Shamoon, a publicist for Dr. Darren Smith, said in an email that "when Dr. Smith was using AlloClae, he purchased it directly from the company and had no knowledge of irregularities." Smith is no longer offering the product, she said.

ME Plastic Surgery, which has locations on Manhattan's Fifth Avenue and in Queens, recently updated a blog post to say that it is not offering alloClae.

Several New York doctors said in early June that they're still using alloClae. Tiger has said it's suspending distribution to New York, but the product can still be "legally sold." In the meantime, doctors in the state continue to promote it.

Emer posted an Instagram video on June 12 showing himself injecting alloClae into a patient's buttocks.

"Don't be left behind," the caption reads, along with a peach emoji. The geotag: New York City.

• Senators advanced a bill that would give prosecutors more time to bring pandemic fraud cases.
• They cited Business Insider's reporting on potential misuse of Shuttered Venue Operators Grant funds.
• The Small Business Administration says 69% of the $14.6 billion SVOG program may have been misspent.

Lawmakers just came closer to giving US prosecutors more time to pursue billions of dollars in suspected pandemic-aid fraud tied to restaurants and live entertainment — and cited Business Insider's investigation into how those funds were used by celebrities.

Senators passed a long-delayed bill on Wednesday night that would extend the statute of limitations for fraud tied to two relief programs: the $28.6 billion Restaurant Revitalization Fund and the $14.6 billion Shuttered Venue Operators Grant.

The bill would put the programs on the same legal footing as bigger, better-known pandemic aid packages that lost as much as $200 billion to fraud, like the Paycheck Protection Program. If it becomes law, prosecutors will have 10 years to bring charges of defrauding the programs, instead of the usual five.

Earlier this week, the Government Accountability Office reported that as much as $10 billion from SVOG funds may have been improperly paid out, which is more than 200 times larger than a fraud estimate the Small Business Administration published three years ago.

Business Insider previously reported that hundreds of millions of dollars were paid out to successful artists like Lil Wayne, Post Malone, metal legends Alice in Chains, and DJs including Steve Aoki and Marshmello. They used the money on private jets, luxury clothes, and payments to themselves, according to the investigation.

Sen. Joni Ernst, an Iowa Republican who has been the bill's main advocate, invoked that reporting in remarks on the Senate floor on Wednesday.

"For fraudsters, time flies when you're having fun," she said. "Look no further than rapper Chris Brown, who exploited the SVOG program to pay for his lavish $80,000 birthday party and paid himself $5 million in the process."

Lawyers and representatives for Brown didn't respond to requests for comment. Previously, in response to Business Insider's late 2024 investigation, an attorney for the accounting and wealth management firm that helped Brown's company get a federal grant, NKSFB, called Business Insider's questions "uninformed" and didn't answer them.

COVID fraud cases get more time

The bill passed with an amendment that would require enforcement to be "carried out in a nonpartisan manner," said Sen. Ed Markey, the top Democrat on the small-business committee that Ernst chairs.

The SBA has said that 70% of the restaurant support funds paid out by the RRF program were proper, but that it's "unknown" whether the remaining $8.7 billion was legally paid to eligible recipients. The agency's inspector general previously said more than $6 billion was paid out without doing enough to verify that recipients qualified for the money.

The agency has previously defended cutting checks under the shuttered venues program to "loan-out companies" used by big-name artists to ink performance deals.

Recipients included Broadway shows, arts companies, and cultural institutions that asked Congress for help paying bills they'd run up during the year-plus when public gatherings were limited because of the COVID-19 pandemic. The law also allowed payments to lesser-known groups, like talent agents.

There was no requirement that recipients be on the brink of bankruptcy. One Texas concert promoter received a $10 million grant in July 2021. About four months later, he bought a home for $2.1 million in cash.

The law creating SVOG allowed grant recipients to use the money for a broad range of purposes, including expenses deemed "ordinary and necessary" as well as compensation to the owners of for-profit businesses that received the money.

The new estimate of $10 billion in payment errors amounts to about two-thirds of the program's entire budget. SBA officials said that $4.5 billion of that was overpayments to businesses that "did not align with the established statutory guidelines" for payment. They also found errors with the monitoring of recipients' spending.

In 2023, the Biden administration said that one-third of 1% of the entertainment grants were "likely fraudulent." Government watchdogs say only some "improper payments" amount to fraud, so the new number isn't an apples-to-apples comparison with the 2023 figure.

More than 2,000 people have been sentenced for defrauding pandemic aid programs. The SBA inspector general has said many more cases are pending.

• Contractors said in at least five lawsuits that AI training startup Mercor exposed their data to hackers.
• Mercor said last week it was "impacted" by compromised LiteLLM software.
• One of the suits seeks to hold LiteLLM, security audit firm Delve, and others liable.

Contractors filed five lawsuits against Mercor, the AI training firm valued at $10 billion, in the past week, accusing the company of violating data privacy and consumer protection laws.

The suits, filed in federal courts in California and Texas, allege Mercor's negligence could have resulted in the disclosure of Social Security numbers, addresses, and other information, including recordings of interviews, to bad actors.

The lawsuits seek unspecified monetary damages.

Mercor said last week that it was impacted by a breach of the open-source project LiteLLM, which was created by Berrie AI, without describing the stolen data.

Techcrunch reported that sample materials posted by the hackers included Slack data and videos of conversations between Mercor contractors and an AI system.

It's somewhat common for companies to be sued in the wake of a data breach. The biggest cases have settled for between $1 and $5 per class member, according to a survey of data-breach settlements from 2018 to 2021 by Cornerstone Research.

Victims with documented financial losses are sometimes paid more. Some settlements include non-monetary relief, like free credit monitoring.

A lawsuit filed by NaTivia Esson and her lawyers at Strauss Borrelli says she worked for Mercor from March 2025 to March 2026 and filled out a W-9 form with her personal identifying information each time she got work. She "trusted the company would use reasonable measures to protect it," her complaint read.

"Because of the data breach, plaintiff anticipates spending considerable amounts of time and money to try and mitigate her injuries."

Mercor declined to comment.

Mercor has used gig workers to train AI for clients including Meta, Facebook's parent company. Meta paused its work with Mercor after the data breach, Business Insider previously reported.

One suit against Mercor also names Berrie AI and Delve Technologies, an "automated compliance" firm that had previously certified Berrie's compliance with certain industry standards, as defendants. The complaint in that case said a "whistleblower" exposed misconduct at Delve.

Last month, Delve denied claims in an anonymously authored Substack post that accused it of facilitating "fake compliance" and arranging sham security audits.

Other legal challenges for Mercor might be on the horizon. An apparent lead-generation website, MercorClaims.com, went live on or around April 1, although it does not appear to be sending users to any particular law firm.

Berrie AI and Delve didn't immediately respond to requests for comment.