Feds Rule Against Hoodia, HGH Spammers

WASHINGTONA federal judge agreed with FTC charges against Sili Neutraceuticals LLC and Brian McDaid, ordering them to pay more than $2.5 million for making false advertising claims and sending illegal e-mail messages in violation of the FTC Act and the CAN-SPAM Act (Controlling the Assault of Non-Solicited Pornography and Marketing Act). U.S. District Court Judge David H. Coar ordered the company and McDaid (individually and doing business as Kaycon, Ltd.) to stop misrepresenting any products or services, including hoodia and human growth hormone (HGH) products, and to stop sending illegal spam. The court also entered a $2.5 million judgment against the defendants.

In August 2007, the FTC charged the defendants with CAN-SPAM violations and making false and unsubstantiated claims about hoodia weight-loss products and HGH anti-aging products; subsequently, a district court judge froze the defendants' assets and halted the e-mails and product claims.

In the latest judgment, Coar found the defendants violated the FTC Act by falsely claiming that the hoodia products cause rapid, substantial and permanent weight loss, and that the HGH products contain human growth hormone and/or cause a clinically meaningful increase in growth hormone levels and/or will turn back or reverse the aging process. Among the CAN-SPAM Act violations were: sending commercial e-mail messages with misleading subject headings; failing to provide clear and conspicuous notice of the opportunity to decline to receive further spam from the sender; and/or not providing a functioning return e-mail address and the senders valid physical postal address. According to the FTCs complaint, the spam drove traffic to the defendants Web sites, which sold the products.