For Release: July
1, 2003
FTC
Charges Direct Marketers of Ephedra Weight Loss Products With
Making Deceptive Efficacy and Safety Claims
FTC Also Challenges
Advertising Claims for Additional Dietary Supplements
The Federal Trade Commission
today announced three enforcement actions against direct marketers
of weight-loss products containing ephedra. The two settlements
and one complaint, filed in U.S. district court, target deceptive
efficacy, safety, and “no side effects” claims
for weight loss supplements containing ephedra (also known
as Ma Huang). The FTC actions challenge false advertising
claims that the ephedra supplements cause rapid, substantial,
and permanent weight-loss without diet or exercise, and that
“clinical studies” or “medical research”
prove these claims. The FTC also challenges claims that the
ephedra weight-loss products are “100% safe,”
“perfectly safe,” or have “no side effects.”
The FTC previously brought
four enforcement actions challenging deceptive safety and
“no side effects” claims for ephedra supplements
marketed for body-building and energy, and as alternatives
to street drugs like Ecstasy.
“In
these cases, the marketers both overstated the benefits and
understated the risks of using the products,” said Howard
Beales, Director of the FTC’s Bureau of Consumer Protection.
“With these enforcement actions, we’re putting
the marketers of ephedra supplements on notice that the law
demands substantiation for your advertising claims, and the
FTC will do its best to make sure you have it.”
The FTC also is challenging
weight-loss claims for several other non-ephedra dietary supplements.
One case challenges safety and efficacy claims for a dietary
supplement used to treat impotence in men, and another challenges
claims that a glucosamine and chondroitin dietary supplement
“cures” arthritis.
The two settlements announced
today require Health Laboratories of North America, Inc.,
USA Pharmacal Sales, Inc., and their principals to stop making
false and deceptive advertising claims, to include warnings
about the health risks of ephedra and certain other products,
and to pay a total of $370,000 in consumer redress. The third
case, against Michael S. Levey and others, will proceed to
litigation.
Michael S. Levey
The FTC charges California residents Michael
S. Levey and Gary Ballen; Bentley Myers International Co.,
based in Vancouver, Canada; and Publisher’s Data Services,
Inc. and Nutritional Life, Inc., both based in Beverly Hills,
California, with violating the FTC Act in marketing dietary
supplements purported to cause rapid and substantial weight
loss without diet or exercise and to “cure” arthritis.
Levey and Ballen control the companies. In addition, the FTC
is charging Levey and the three companies with violating a
1993 FTC order in connection with these marketing activities.
The complaint, filed by the Department of Justice on behalf
of the FTC, alleges that the defendants:
- made false or unsubstantiated
claims that three purported weight loss products –
Zymax and MillinexES (both containing ephedra), and Serotril
(containing St. John’s wort) – cause substantial
weight loss in a short period of time, without the need
to diet or exercise;
- made unsubstantiated “no
side effects” claims for the Zymax and MillinexES
ephedra products;
- falsely represented that clinical
studies prove that Zymax and MillinexES cause substantial
weight loss in a short time without diet or exercise; and
- made unsubstantiated claims that
CartazyneDS, a dietary supplement containing glucosamine
and chondroitin, “cures” arthritis, “rebuilds”
cartilage in human joints “within days,” and
is an effective alternative to joint replacement surgery.
The complaint alleges that the defendants
advertised these weight loss and arthritis products in brochures
that used fictitious expert endorsements, fake consumer testimonials,
and false “before and after” pictures. The defendants
allegedly used different business names in marketing their
products, such as “Denman Scientific Research”
in ads for Zymax, “Cartazyne Sciences International”
in ads for CartazyneDS, and “Serotril Sciences, International”
in ads for Serotril.
The complaint also alleges that Levey violated
the 1993 order by failing to notify the FTC within 30 days
after he became affiliated with Bentley Myers and Publisher’s
Data Services. The FTC’s 1993 cease and desist order
against Michael Levey and his company, Positive Response Marketing,
Inc., was based on allegations that Levey made false and misleading
representations in television infomercials for the EuroTrym
Diet Patch, the Foliplexx hair-loss product, and the Y-Bron
impotence treatment, and performed deceptive demonstrations
in infomercials for the
Magic Wand kitchen mixer. In addition to
requiring a $275,000 redress payment, the order prohibits
Levey from making unsubstantiated advertising claims and from
using deceptive endorsements and demonstrations, and imposes
certain recordkeeping and reporting obligations.
The FTC is seeking monetary civil penalties
from Levey and the three companies for violations of the 1993
order, and also is seeking consumer redress and injunctive
relief from all the defendants.
The Commission vote to refer the Levey complaint
to the Department of Justice for filing was 5-0. The complaint
was filed at the FTC’s request by the Department of
Justice in U.S. District Court for the Central District of
California, on June 30, 2003.
Health Laboratories of North America
The FTC’s complaint names Health Laboratories
of North America, Inc. (HLNA), based in Scottsdale, Arizona,
and its director, Marc Kaplan. According to the FTC, the defendants
marketed two products under the brand name “Berry Trim
Plus” primarily through direct mail. Both products contained
Hydroxycitric Acid or “HCA,” an extract from brindall
berries, and one also contained ephedrine alkaloids from Ma
Huang. The FTC alleges that HLNA made numerous false and unsubstantiated
weight-loss claims for Berry Trim Plus through testimonials
such as, “Teacher Loses 70 lbs. In Only 8 Weeks Easily,”
and other statements. The FTC alleges that the HLNA defendants
falsely represented that Berry Trim Plus products cause rapid
and substantial weight loss, including as much as 70 pounds
in eight weeks, without dieting or increasing exercise, and
that clinical studies prove that Berry Trim Plus causes rapid
and substantial weight loss. The FTC complaint further alleges
that the defendants did not have a reasonable basis to advertise
that Berry Trim Plus is “100% safe” and “perfectly
safe” to use, and that it prevents fat absorption from
whatever the user eats.
The HLNA settlement order prohibits the
defendants from making false and unsubstantiated weight-loss
claims, as well as unsubstantiated safety claims. The order
also prohibits the defendants from misrepresenting the contents,
validity, results, conclusions, or interpretations of any
test or study. The order requires that a prominent warning
about health risks be made in any advertisement, promotional
item, or product label for an ephedra product. The warning
includes information that ephedra use can result in serious
injury, and even death. The order requires HLNA to pay $195,000
in consumer redress. If, however, the defendants have made
any material misrepresentation or omission on their financial
statements, the court may enter a $35 million judgment against
them.
USA Pharmacal Sales, Inc.
The FTC’s complaint names USA Pharmacal
Sales, Inc., and its co-owners, John Pence and Arthur Sussman.
The defendants, based in Palm Harbor, Florida, marketed and
sold three weight-loss products and an erectile dysfunction
supplement. The META-BIOLOGICAL weight-loss cocktail contains
ephedrine alkaloids derived from Ma Huang, caffeine, and 19
other ingredients. FAT•SPONGE IN A PILL is comprised
of chitosan and glucomannan, and digestive aids for lactose-intolerant
people. CALOTROL/MD contains chitosan, gymnema
sylvestre, HCA, and chromium picolinate. The erectile dysfunction
supplement, VIRILE V, contains yohimbine, androstenedione
(a steroid hormone), and 12 other active ingredients. According
to the FTC, the defendants advertised their weight loss and
erectile dysfunction products through free-standing inserts
in regional newspapers and direct mail. The defendants also
used an expert medical endorser in some advertisements to
tout their products’ efficacy and safety.
The FTC’s complaint alleges that advertisements
for the purported weight-loss products made false claims that
the products cause rapid, substantial, and permanent weight
loss without the need to reduce caloric intake. The complaint
also alleges that the ads made false claims that “clinical
tests” or “medical research” proves that
the products cause rapid, significant, or permanent weight
loss. The complaint further alleges that the defendants made
unsubstantiated claims that the META-BIOLOGICAL ephedra weight-loss
product is safe. In addition, the FTC alleges that the defendants
made deceptive efficacy and safety claims for the erectile
dysfunction supplement. According to the FTC, there is no
reliable evidence to suggest that ephedra, an ingredient in
META-BIOLOGICAL, or androstenedione and yohimbe, ingredients
in VIRILE V, are safe. In fact, the complaint alleges that
they have been associated with health risks.
The USA Pharmacal settlement order prohibits
the defendants from making false or unsubstantiated claims
that the weight-loss products or any substantially similar
product causes rapid, substantial, or permanent weight loss
or fat loss. The order also bars them from representing that
clinical or medical studies support such claims. The order
requires that the defendants place a prominent warning about
health risks in any advertisement, promotional item, or product
label for an ephedra product. The warning includes information
that ephedra use can result in serious injury, and even death.
USA Pharmacal likewise must place health risk warnings on
materials that make claims for any products that contain yohimbe
or androgen.
USA Pharmacal has agreed to pay $175,000
in consumer redress. If, however, the defendants have made
any material misrepresentation or omission on their financial
statements, the court may enter a judgment for $9.2 million
against them.
Both the HLNA and USA Pharmacal settlements
require the defendants to take reasonable steps to monitor
and ensure that all employees and agents comply with the order,
and to terminate any employee who knowingly violates the order.
Also, both settlements contain various recordkeeping requirements
to assist the FTC in monitoring the defendants’ compliance.
The Commission vote to authorize the staff
to file the complaint and stipulated final judgment in the
HLNA case was 5-0. The documents are being filed in the U.S.
District Court for the District of Columbia.
The Commission vote to authorize the staff
to file the complaint and stipulated final judgment in the
USA Pharmacal case was 5-0. The documents are being filed
in the U.S. District court for the Middle District of Florida,
Tampa Division.
Consumer Tips:
Resources for consumers, businesses, and
the press are available at www.ftc.gov/dietfit. The FTC has
the following tips for consumers who are interested in weight-loss
products or programs:
- Products and programs that promise quick and easy weight
loss are bogus. To lose weight, you have to lower your intake
of calories and increase your physical activity.
- There are no miracle weight-loss products. Be skeptical
of products and programs that claim they can keep weight
off permanently. Be skeptical about exaggerated claims.
- Consumers who want advice on how to find a healthy weight
loss plan should visit the Partnership for Healthy Weight
Management Web site at www.consumer.gov/weightloss.
NOTE: The Commission
authorizes the filing of a complaint when it has “reason
to believe” that the law has been or is being violated,
and it appears to the Commission that a proceeding is
in the public interest. The complaint is not a finding
or ruling that the defendant actually has violated the
law. The case will be decided by the court.
NOTE: The stipulated
final judgments and orders are for settlement purposes
only and do not constitute an admission by the defendants
of a law violation. A stipulated final judgment and order
have the force of law when signed by the judge.
Copies
of the complaints and stipulated final judgments and orders
are available from the FTC’s Web site at http://www.ftc.gov
and also from the FTC’s Consumer Response Center, Room
130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.
The FTC works for the consumer to prevent fraudulent, deceptive,
and unfair business practices in the marketplace and to provide
information to help consumers spot, stop, and avoid them.
To file a complaint, or to get free information on any of
150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357),
or use the complaint form at http://www.ftc.gov.
The FTC enters Internet, telemarketing, identity theft, and
other fraud-related complaints into Consumer Sentinel, a secure,
online database available to hundreds of civil and criminal
law enforcement agencies in the U.S. and abroad.
MEDIA CONTACT:
Brenda Mack
Office of Public Affairs
202-326-2182
STAFF CONTACTS:
Louise Jung or Joni Lupovitz
Bureau of Consumer Protection
202-326-2989 or 202-326-3743
(Michael Levey et al.)
Richard Cleland or Richard Kelly
Bureau of Consumer Protection
202-326-3088 or 202-326-3304
(Health Laboratories of N.A.)
Thomas Pahl or Matthew Daynard
Bureau of Consumer Protection
202-326-2128 or 202-326-3291
(USA Pharmacal Sales)
(FTC Docket No. C-3459 (Levey/Bentley);
Civil Action No. CV-03-4670 GAF (AJWx)
(FTC File No. 012-3099 (Health Labs); Civil Action No. not
available at press time)
(FTC File No. 002-3319 (USA Pharmacal); Civil Action No. not
available at press time)
(http://www.ftc.gov/opa/2003/07/ephedra.htm)
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Related Documents:
Project
Waistline Campaign Web Page
United States of America
(for the Federal Trade Commission) v. Michael S. Levey;
Gary Ballen; Bentley Myers International Co.; Publisher's
Data Services, Inc.; and Nutritional LIfe, Inc.
(Central District of California, Western Division).
- Complaint for
Civil Penalties, Injunctive and Other Relief [PDF 78KB]
- Exhibit A: Text of and Exhibits to 1993 Complaint
-
Federal
Trade Commission v. USA Pharmacal Sales, Inc.; John Pence;
and Arthur Sussman
(Middle District of Florida, Tampa Division).
-
Complaint
for Permanent Injunction and Other Equitable Relief
[PDF 40KB]
-
Stipulated
Final Judgment and Order For A Permanent Injunction
and Monetary Relief
Against USA Pharmacal Sales, Inc., John Pence, and
Arthur Sussman [PDF 41KB]
Federal Trade
Commission v. Health Laboratories of North America, Inc.,
and Marc J. Kaplan (District of Columbia).
-
Complaint
for Permanent Injunction and Other Equitable Relief
Pursuant to Section 13(b) of the Federal Trade Commission
Act [PDF27KB]
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