The importance of this article is for supplement brands rests in the fact that if you aren't compliant with the set guidelines of manufacturing and marketing supplements you pay the price. We will discuss one of the more recent instances where legal action was necessary and give you insight on how who you choose to work with the most quintessential.
Smiling Bob—real name, Steve Warshak— was the founder of Berkeley Premium Nutraceuticals. He was also handed a 25-year jail sentence following a federal court case which found him guilty of an astounding 93 counts of fraud, conspiracy and money laundering. Steve and his company were ordered to forfeit $500 million by a federal court.
Smiling Bob’s Scheme
In Cincinnati, Ohio, the federal jury convicted Mister Warshak—alongside his 75-year-old mom—for creating and maintaining a money scheme centered on male sexual enhancement. It wasn’t a duo job, however, as both worked alongside a number of associates, tricking thousands of consumers into purchasing their products with false expectations.
The scheme revolved around a product called Enzyte. Promising sexual enhancement, Enzyte was featured in a grand advertising campaign. The states’ complaints purport that Warshak and his posse violated state laws which prohibit both deceptive and false advertisement. Unfair business practices, of course, were claimed.
Overall Claims Against Smiling Bob
The Attorneys General asserted the falsehood of Warshak’s product. Their advertisements, it seems, made fake claims about the product’s effectiveness—claims which were supported by neither scientific evidence or trusted reviews. Warshak made quite a lot of unsubstantiated claims about Enzyte, too, stating the product would aid in sexual performance and function, giving the user firmer erections.
While he promoted Enzyte, his other products were pushed and—some assume—might’ve been promoted under false advertising as well. The company’s other dietary compounds include Avlimil, Dromias, Ogoplex, Pinadol, Rovicid and Rudofil. As of now, these other supplements have entered the realm of scrutiny.
Smiling Bob's Free 30-Day-Trial Deception
The unearthing of unethical practices doesn’t stop there, either. The Attorneys General dug deeper, finding that Warshak and the other defendants deceived consumers by marketing “free” 30-day trial periods attached to their dietary supplement products. Warshak and the company’s associates, however, neglected to inform consumers about the additional payments which followed; 30-day testers would be automatically billed for continuous shipments—and the company made it rather hard to both obtain a refund and cancel the shipments.
Big Changes in the Supplement World
Fortunately, some good came from the fiasco. The settlement resulting from Smiling Bob’s deeds requires Warshak’s company to provide restitution to all consumers who currently have unresolved complaints. The defendants must also pay restitution to any consumers who’ve filed complaints with the Better Business Bureau, the Attorney Generals’ office or Berkely within 90 days following the settlement’s filing period.
Even better, the settlement made several mandates—reforming the supplement manufacturing world’s business practices with a solid example. To protect consumers from future harm, Warshak and his crew need to reform their business practices. Beneath the mandates, they can’t utilize the word “free” when advertising in any form—unless, that is, all conditions surrounding the offer are disclosed to consumers. If the offer really is free, the offer must then be double-checked by industry regulators to assure full adherence to state and federal laws alike.
The company must also stop making health claims which can’t be supported by scientific evidence. Additionally, all telemarketing calls conducted by the brand must be recorded and retained for one year.
Making the Wrong Kind of History
The dietary supplements industry got a message—and a potent one. Misleading claims can, and will, result in big penalties. As per a statement by James R Pronchnow—a veteran, Colorado-based lawyer—”This is the most significant decision in the history of the dietary supplements industry.”
The case’s results are a big departure from the industry’s previous sentencing. Plus, it makes note of the supplement world’s frequent transgressions against hopeful consumers. The case asserted the importance of scientific backings. Currently, criminal prosecutions of dietary supplement businesses are rare. It’s even more uncommon to see a criminal prosecution occur due to FDA allegations.
In the event an illegal structure-function is claimed, it’s still difficult to determine actual fraud. Fortunately, The case made such processes a little more clear-cut. He was given a prison sentence alongside a $93,000 charge from his personal savings—not to mention other payments amounting to over $10,000.
What Does This Mean for the Supplement Brands?
Warshak’s high fine is telling: The FDA is gaining traction, capably handling unethical providers. In the past, minor slaps on the wrist didn’t end entire companies or careers. Warshak’s ruling, however, was different. If companies can’t survive as ethical providers, the law might remove them from the equation completely.
These actions truly victimized thousands of customers, resulting in criminal charges to a fittingly criminal case.
Importance of Selecting the Right Supplement Manufacturer
The key in avoiding mishaps like this rely heavily on who you choose to manufacture your supplements. ABH Pharma is transparent on all angles and focus on creating relationships with our customers. We are GMP and NPA compliant and can complete all facets of manufacturing under one roof! Click here to take a tour of our 50,000 square foot facility!