Markets Wired

The U.S. Court of Appeals for the Ninth Circuit has upheld a district court ruling requiring marketers of Seasilver, an alleged phony cure-all, to pay almost $120 million for failing to comply with an earlier order requiring them to pay $3 million in consumer redress.

The decision, issued on April 10, 2008, affirmed a district court order requiring Jason and Bela Berkes, Seasilver, USA, Inc., and Americaloe, Inc., to pay almost $120 million under an agreement with the Federal Trade Commission. The March 2004 order barred them from making false or misleading claims and included a $120 million judgment that would be suspended if they paid $3 million within a specified time. The defendants did not meet the required payment terms, and in June 2006 a district court granted the Commission’s request to enforce the stipulated judgment. The defendants appealed the decision.

According to the FTC, the defendants claimed that the dietary supplement “Seasilver” was clinically proven to treat or cure 650 diseases, including cancer and AIDS, and cause rapid, substantial, and permanent weight loss without dieting. The agency alleged that the claims were false and unsubstantiated.

The Commission’s initial action against the defendants was part of “Operation Cure.All,” a comprehensive law enforcement and consumer education campaign to combat health-related fraud on the Internet. Law enforcement actions were coordinated among the FTC, the Food and Drug Administration, Health Canada, Canada’s Competition Bureau, and state Attorneys General against unscrupulous marketers who prey upon seriously ill consumers.

Copies of the decision are available from the FTC’s Web site at http://www.ftc.gov and 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 and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877- 382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://www.ftc.gov/bcp/consumer.shtm.