| U.S. Federal Trade Commission |
FTC News Release, Aug 10, 2006
Repeat Offenders Banned From Claiming Products Treat or Cure Diseases
Most Recent Claim: Pill Would Prevent, Treat, and Cure Diabetes
An operation selling Chinese herbal supplements is banned
from claiming its products treat or cure diseases, to settle
Federal Trade Commission charges it violated a previous court
order. The FTC alleged the sellers of Dia-Cope, a pill claimed
to prevent, treat, and cure diabetes, violated the order by
misrepresenting the health benefits of their product and
misrepresenting that clinical trials proved their claims. The
defendants will give up their ill-gotten gains – all of the
assets they received from the sale of Dia-Cope.
The defendants originally sold “Sagee,” a Chinese herbal
supplement that they claimed 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. They advertised Sagee
mainly in Chinese-language media; some ads also appeared in
Vietnamese and English. The supplements were sold by
distributors on the Internet and in some stores.
The FTC charged that the claims about Sagee were false and
unsubstantiated and an order entered in January 2005
prohibited the defendants from making unsubstantiated health
benefit, performance, or efficacy claims for any dietary
supplement, food, drug, device, or service. The order also
barred them from misrepresenting the existence, results,
validity or conclusions of any scientific study.
According to the FTC, the defendants then began advertising
Dia-Cope on Web sites available in seven languages: English,
Chinese, Japanese, Korean, Indonesian, Spanish, and Russian.
The defendants claimed Dia-Cope could prevent, treat, and cure
diabetes and claimed that thousands of human clinical trials
proved it. Their Web sites, www.sagee.com and
www.dia-cope.com, stated that the FDA had approved the
product. Bottles of Dia-Cope with 90 capsules sold for $60 –
enough with the suggested dosage to last one or two weeks.
According to the FTC, the defendants violated their court
order by misrepresenting the health benefits of Dia-Cope,
falsely claiming that the FDA had approved the product, and
misrepresenting that there was clinical support for their
claims. A US District Court entered a temporary restraining
order against the California-based defendants, Sagee U.S.A.
Group, Inc. and Xiao Hua Li, on July 5, 2006, stopping their
deceptive claims.
The modified order against the defendants bans them from
claiming that any foods, drugs, devices, services, or dietary
supplements can prevent, mitigate, treat, or cure any disease.
Under the order, the defendants will give up all of the assets
derived from the sale of Dia-Cope, $10,396. The order extends
the original order’s monitoring and record-keeping provisions
and retains the strict provisions requiring the corporate
defendant, Sagee, to monitor the activities of its
distributors.
The Commission vote to authorize staff to file the modified
stipulated final order was 5-0. The modified stipulated final
order for permanent injunction was entered in the U.S.
District Court for the Central District of California on
August 9, 2006.
NOTE: This stipulated final order is for
settlement purposes only and does not constitute an admission
by the defendant of a law violation. A stipulated final order
requires approval by the court 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.