Founder of Ives Health Arrested for Selling Drug as an "All-Natural" Supplement

CLAREMORE, Okla.--On April 5, the founder and president of Claremore, Okla.-based Ives Health Co. (OTCBB:IVEH) was arrested for selling an alleged, unapproved drug as an "all-natural" remedy that may prolong an HIV-positive patient's life. Ives Health and Keith Ives, president of the company, were charged with conspiracy and wire fraud. Ives, who was arrested in Oklahoma, was expected to be extradited to New York because FBI agents bought the alleged drug online in Manhattan.

The product in question is the T-Factor Immune Enhancement System, which began being sold on the company's Web site Feb. 13. The product contains juvenile neonatal bovine calf thymus, pituitary gland, spleen, lymph gland and bone marrow. The formula, which was acquired by Ives Health in 1998, was touted as "all-natural" by the company. In a press release dated Feb. 15, Ives stated that an HIV-positive person whose CD-4 count is below 350 and who is considered to be in the final stages of immune deficiency could benefit from T-Factor, which reportedly increases CD-4 at a rate of 18 cells per milliliter of blood. "While T-Factor is not a cure, it still offers hope that this treatment can prolong HIV patients' life spans and, more importantly, improve their quality of life until a cure is found," Ives said in the release.

The U.S. Justice Department is not the only one questioning the efficacy of this product; in March, the Securities and Exchange Commission (SEC) suspended stock trading for Ives Health for 10 days due to concerns about the company's claims. On April 9, the stock was selling for $0.00. If Ives is convicted on both charges, he could face a maximum of 10 years in prison.

Ives Health released a statement April 12 that denied the allegationsbrought against the company and its president. However, it stated that itis fully cooperating with the U.S. attorney's office, SEC and FDA and hassuspended the manufacture, advertising and sale of T-Factor and two otherrelated products until this issue is resolved. The company has taken down related product information from its site at www.iveshealth.com.