VITAMIN/HEALTH SUPPLEMENT COMPANY TO PAY ORANGE COUTNY DISTRICT ATTORNEY THE LARGEST CONSUMER FRAUD JUDGEMENT IN COUNTY HISTORY

OCDASeal

Orange County District Attorney
Press Release


Tony Rackauckas, District Attorney
401 Civic Center Drive West
Santa Ana, CA 92701

For Immediate Release
January 18th, 2005
Contact:

Mark Macaulay
Media Relations Spokesperson(714) 347-8405

Santa Ana – Orange County District Attorney (OCDA) Tony Rackauckas announced today the completion of a civil settlement with Body Wise International, Inc. The Tustin based vitamin/health supplement company, which markets nutrient products as medicinal, has agreed to pay $3.58 million in civil penalties and costs pursuant to a stipulated judgment. This is the largest consumer fraud settlement in Orange County history.

Law Prohibits Companies from Marketing cancer and AIDS cures to Protect Consumers

The California Health and Safety Code prohibits anyone from claiming that any substance can have any effect at all on the following illnesses: Appendicitis, blood disorders, bone or joint disease, Kidney disease or disorders, cancer, carbuncles, diseases disorders or conditions of the eye, diabetes, diphtheria, gallbladder diseases or disorders, heart and vascular diseases, high blood pressure, diseases or disorders of the ear or auditory apparatus, measles, meningitis, mental diseases, paralysis, pneumonia, polio, prostrate gland disorders, conditions of the scalp effecting baldness, alcoholism, periodontal disease, epilepsy, goiter, endocrine disorders, sexual impotence, sinus infections, encephalitis, tumors, venereal disease, tuberculosis, ulcers of the stomach, varicose ulcers, scarlet fever, typhoid fever, whooping cough, AIDS, ARC, diseases or disorders or conditions of the immune system.

OCDA initiates Investigation of Body Wise

The OCDA began an investigation of Body Wise in April 2001, when DA Investigator Grant Gulickson received a flyer claiming that one of Body Wise’s products, AG-Immune, could help prevent and treat diseases such as cancer, AIDS and other serious illnesses. The Body Wise advertisements were making claims on many of the above mentioned diseases in violation of California law.

In April 2000, Body Wise began marketing AG-Immune through the internet, promotional materials, and seminars claiming it were effective, in among other things, the treatment of cancer, heart disease and HIV/Aids.

One Body Wise advertisement for AG-Immune claimed:

“This is not just another vitamin. Ai/E-10 is an amazing nutrient found in AG-Immune. Some of the conditions which are highly resistant to cure, but for which Ai/E-10 in clinical use has proven to be very effective are cancer, Irritable Bowel Syndrome, colds and flu, Chronic Fatigue Syndrome, sinusitis, Candida Albicans, arthritis and rheumatism, heart disease, infection, Lupus and Hepatitis C.”

The advertisements also contained personal and compelling testimonials from “cured” individuals.

FTC joins the Investigation

According to the Federal Trade Commission investigation, Body Wise hired a licensed Homeopathic physician from Tucson, Arizona, Dr. Jesse A. Stoff, to endorse AG-Immune in advertisements. AG-Immune was sold for about $50 a bottle. Dr. Stoff was paid royalties for every bottle of the product purchased from Body Wise. He also wrote a book about Ai/E-10 called “The Ultimate Nutrient” which claimed that Ai/E-10 had clinically proven benefit for anyone suffering from diseases such as AIDS and cancer. Body Wise marketed this and other products directly to consumers and through a network of “consultants” who market and sell Body Wise products to consumers.

The Law Protects Consumers from Exploitation

“The reason we have this law is to prohibit marketing substances to those who are in a vulnerable state and likely to spend their money on anything that offers them “hope in a bottle”, said Orange County District Attorney Tony Rackauckas. “Desperate for a cure, a person would pay anything for renewed health. This law prevents companies from exploiting that desperation with unproven remedies.”

Final Judgment

The judgment was signed by Orange County Superior Court Judge Michael Brenner on January 13, 2005. As part of the settlement, Body Wise has eliminated from their advertising all of the claims concerning the effect of AG-Immune on diseases such as cancer, AIDS and Hepatitis C. They have agreed to pay $2 million to the Federal Trade Commission and $900,000 to the County of Orange in civil penalties.

The Orange County District Attorney’s office will receive $470,000 and the Department of Health Services will receive $10,000 for costs of the investigation. The remaining $200,000 will be placed in a statewide consumer protection trust fund which will help to pay for the costs of future consumer protection cases in California. Body Wise admitted no wrongdoing in entering the stipulated judgment.

The case was prosecuted by Deputy District Attorney Michelle Cipolletti in the Consumer Fraud unit in conjunction with the Federal Trade Commission and the California Attorney General’s Office.

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