Chinese Herb Company Violates FTC Order

WASHINGTON—Sagee USA (www.sagee.com) has settled its second unsubstantiated claims order with the Federal Trade Commission (FTC), which charged the company with violating similar stipulations of the first order, levied back in January 2005. The company is now banned from claiming its products treat or cure diseases, and must turn over profits made from the sale of the offending product, Dia-Cope (www.dia-cope.com).

In the original case, Sagee was charged with marketing a Chinese herbal supplement called Sagee using claims it could improve memory and concentration, repair damaged brain cells, slow the aging of the brain, increase the learning ability of people with mental handicaps and treat various diseases and conditions related to brain function, including Alzheimer’s disease, senile dementia, schizophrenia, autism, cerebral hemorrhage, stroke, epilepsy and Parkinson’s disease. Although the company settled the case, FTC (www.ftc.gov) reported the company violated that order by marketing Dia-Cope online as able to prevent, treat and cure diabetes, in addition to misrepresenting the health benefits of their product and misrepresenting that clinical trials proved their claims.

A U.S. District Court entered the most recent temporary restraining order against the California-based defendants, Sagee U.S.A. Group Inc. and Xiao Hua Li, on July 5, 2006, to halt the deceptive claims. The latest order bans the defendants from claiming any foods, drugs, devices, services or dietary supplements can prevent, mitigate, treat or cure any disease. Under terms of the order, the defendants will give up all of the assets derived from the sale of Dia-Cope, about $10,000.The order also extends the original order’s monitoring and record-keeping provisions and retains the strict provisions requiring Sagee to monitor the activities of its distributors.