| U.S. Federal Trade Commission |
FTC News Release, Jan 18, 2005
Body Wise International to Pay over $3.5 Million to Settle Federal and State Deceptive Advertising Charges for “AG-Immune” Dietary Supplement
The Federal Trade Commission, the
Orange County (California) District Attorney, and the
California State Attorney General announced today that they
have reached settlements with Body Wise International, Inc.,
an Orange County business, resolving allegations that Body
Wise deceptively advertised the “AG-Immune” dietary
supplement. The FTC alleges that Body Wise made
unsubstantiated claims that AG-Immune prevents, treats, or
cures numerous diseases, including cancer, HIV/AIDS and
asthma, in violation of a 1995 FTC order. The FTC’s proposed
settlement with Body Wise, if approved by the court, requires
Body Wise to pay a $2 million civil penalty to the FTC.
California’s proposed settlement would require Body Wise to
pay the State of California an additional $1.58 million in
penalties and costs for allegedly violating the State’s
Business and Professions and Health and Safety Codes. The FTC
also reached a settlement with Jesse A. Stoff, M.D., an expert
endorser of AG-Immune, to resolve allegations that he made
deceptive claims for the product.
“There is no immunity for violators of FTC
Orders - especially those making false and unsubstantiated
claims that their products cure or treat serious diseases,”
said Lydia B. Parnes, Acting Director of the FTC’s Bureau of
Consumer Protection.
The FTC complaint names Body Wise
International, located in Tustin, California, and Jesse A.
Stoff, M.D, a resident of Tucson, Arizona. According to the
complaint, in April 2000, Body Wise began marketing AG-Immune,
a dietary supplement containing “antigen infused dialyzable
bovine colostrum/whey extract” or “AI/E-10.” BodyWise marketed
this and other AI/E-10 products directly to consumers and
through a network of “consultants” who market and sell Body
Wise products to consumers. Body Wise sold AG-Immune for
approximately $50 for a one-month supply, and had over $14
million in sales.
According to the complaint, Body Wise
contracted with Dr. Stoff to explain the purported medical
benefits of AI/E-10 and endorse Body Wise products containing
AI/E-10. In promotional materials and at seminars, Body Wise
and Dr. Stoff allegedly claimed that AG-Immune could prevent
or treat numerous diseases or conditions, including cancer,
HIV/AIDS, heart disease, chronic fatigue syndrome, and asthma,
and that scientific research suggested these claims. The
defendants also allegedly claimed that AG-Immune improves
immune system function to prevent or treat these and many
other diseases and conditions. Dr. Stoff was paid royalties
for every bottle of AG-Immune sold.
In 1995, Body Wise settled FTC allegations
that the company made unsubstantiated claims for weight loss
and cholesterol products. The resulting order bars Body Wise
from making certain false or unsubstantiated claims for
dietary supplements, misrepresenting any test or study, and
failing to disclose any material connection between Body Wise
and any person endorsing a Body Wise product. The FTC alleges
that Body Wise violated this FTC order by making
unsubstantiated disease prevention, treatment, and other
health claims for AG-Immune, misrepresenting that scientific
research demonstrated the alleged benefits, and failing to
disclose the material connection between AG-Immune and its
expert endorser, Dr. Stoff. The complaint also alleges that
Dr. Stoff made similar unsubstantiated claims, misrepresented
that scientific research demonstrated the claimed benefits of
the product, and made these claims without exercising his
purported expertise in the prevention and treatment of
disease.
The FTC has obtained two stipulated orders.
One order requires Body Wise to abide by the terms of the
FTC’s 1995 order and to pay the FTC a $2 million civil
penalty. The order also prohibits the company from making
unsubstantiated disease treatment and prevention and other
health benefit claims for any product or service for the
immune system or weight control, or any health-related service
or therapy, dietary supplement, food, drug, or device.
The FTC’s other stipulated order prohibits
Dr. Stoff from making false or unsubstantiated claims that any
food, drug, or dietary supplement prevents, treats, or cures
any disease; activates the immune system to prevent or treat
diseases; or provides any other health benefit. The order
prohibits Dr. Stoff from misrepresenting the existence or
results of tests or studies. In addition, the order requires
Dr. Stoff, when acting as an expert endorser, to support his
expert conclusions with both competent and reliable scientific
evidence and an actual exercise of his purported expertise.
The settlement contains a monetary judgment of $358,000
against Dr. Stoff, which is suspended because of his inability
to pay. This amount will become due immediately if the court
finds that he misrepresented his financial condition to the
FTC.
The Commission vote to refer
the complaint and settlements to the Department of Justice for
filing was 5-0. The complaint and proposed orders
were filed on January 13, 2005, in the U.S. District Court for
the Central District of California by the Department of
Justice at the FTC’s request. The state action was filed in
Orange County Superior Court in Santa Ana. The proposed orders
require the court’s approval.
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
defendants actually have violated the law. The case will be
decided by the court.
NOTE: These orders are for
settlement purposes only and do not constitute an admission by
the defendants of a law violation. An order is subject to
court approval and has the force of law when signed by the
judge.
The text in this article was prepared by the U.S. Federal Trade Commission.