FTC Levies Fines in Two Supplement-Related Cases

WASHINGTON--The companies behind Seasilver, Focus Factor and V-Factor dietary supplements settled with the Federal Trade Commission (FTC) after allegedly using unsubstantiated claims to promote these products.

FTC alleged Carlsbad, Calif.-based Seasilver USA Inc. and Americaloe Inc. promoted Seasilver as being clinically proven to treat or cure 650 diseases, including cancer and AIDS. (Seasilver is a liquid dietary supplement purported to contain, among other ingredients, aloe vera, phyto-silver sea vegetables, Pau DArco and cranberry concentrate.) Under the terms of the settlements, the defendants must pay a total of $4.5 million in consumer redress. In addition, Seasilver agreed to destroy $5.3 million worth of products carrying the claims. Seasilver also agreed to discontinue manufacturing and distributing misbranded products, including Seasilver, in the future.

The claims for Seasilver threatened consumers health by encouraging delays and replacements for proven treatments, said Howard Beales, director of the FTCs Bureau of Consumer Protection. Products touted as cure-alls almost always cure nothing.

FTCs complaint also named the companies principals, Bela and Jason Berkes, and two Seasilver distributors--Brett Rademacher and David R. Friedman, D.C.

The FTC order also contains a $120 million judgment that will be suspended upon the defendants payment of $3 million for restitution, based on their demonstrated inability to pay more.

In the second case, Portland, Maine-based Vital Basics Inc. (VBI) was charged with not having adequate substantiation to back up claims made about the efficacy of Focus Factor and the safety of V-Factor Natural Pack. The complaint also names the companys principals, Robert Graham and Michael Shane. They have agreed to a consent order preventing them from engaging in similar acts or practices in the future and requiring them to pay $1 million in consumer redress. FTC also charged Creative Health Institute Inc. (CHI) of Corinth, Texas, and its principal, Dr. Kyl Smith, with making unsubstantiated claims about Focus Factors ability to improve users focus, memory, mood and concentration.

Focus Factor, which includes vitamins, minerals, botanicals and amino acids, was marketed as needing only one to 10 days to improve adults focus, memory, stress levels, fatigue, mood swings and concentration; students ability to improve their academic performance; and senior citizens memory, mental clarity and energy.

V-Factor is a dietary supplement that contains, among other things, yohimbine and L-arginine. The VBI respondents allegedly marketed V-Factor as a male sexual performance enhancer. FTC alleged the VBI respondents did not have substantiation for the claim that V-Factor was safe for virtually all men, and that they misrepresented a clinical study investigating V-Factor's influence on sexual response and function.

FTCs complaints further alleged both VBI and CHI failed to disclose that certain endorsers who appeared in Focus Factor advertising had material connections with the product.

The proposed settlement prohibits VBI from making unsubstantiated safety claims for V-Factor or any product containing yohimbine, and the proposed consent agreement with the CHI respondents prohibits them from making any of the claims they were making.

More on FTCs actions can be found at www.ftc.gov/opa/2004/03/seasilver.htm and www.ftc.gov/opa/2004/03/vitalbasics.htm.

In related news, the Food and Drug Administration (FDA) also announced Seasilver USA, Americaloe and their principals, Bela Berkes and Jason Berkes, have signed a consent decree of permanent injunction under which they agreed to stop manufacturing and distributing violative products, including Seasilver. The decree also allows for liquidated damages for any further violations--$1,000 for each article sold in interstate commerce.

For more information on FDA's actions, visit www.fda.gov/bbs/topics/news/2004/NEW01037.html.