FTC Levies Fines in Two Supplement-Related Cases 28973

FTC Levies Fines in Two Supplement-Related Cases

WASHINGTONThe companies behind Seasilver, Focus Factor and V-Factordietary supplements settled with the Federal Trade Commission (FTC) afterallegedly 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 purportedto contain, among other ingredients, aloe vera, phyto-silver sea vegetables, PauDArco and cranberry concentrate.) Under the terms of the settlements, thedefendants 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 misbrandedproducts, including Seasilver, in the future.

The claims for Seasilver threatened consumers health by encouragingdelays and replacements for proven treatments, said Howard Beales, directorof the FTCs Bureau of Consumer Protection. Products touted as cure-allsalmost always cure nothing.

FTCs complaint also named the companies principals, Bela and JasonBerkes, and two Seasilver distributorsBrett Rademacher and David R. Friedman,D.C.

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

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

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 toimprove their academic performance; and senior citizens memory, mentalclarity and energy.

V-Factor is a dietary supplement that contains, among other things, yohimbineand L-arginine. The VBI respondents allegedly marketed VFactor as a male sexualperformance enhancer. FTC alleged the VBI respondents did not havesubstantiation for the claim that V-Factor was safe for virtually all men, andthat they misrepresented a clinical study investigating V-Factors influenceon sexual response and function.

FTCs complaints further alleged both VBI and CHI failed to disclose thatcertain endorsers who appeared in Focus Factor advertising had materialconnections with the product. The proposed settlement prohibits VBI from makingunsubstantiated safety claims for V-Factor or any product containing yohimbine,and the proposed consent agreement with the CHI respondents prohibits them frommaking any of the claims they were making.

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

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

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