Marketers of Seasilver Agree to Pay $4.5 Million to Settle FTC Charges

Two California-based companies that promoted the dietary supplement “Seasilver” with allegedly false medical claims are banned from making false or unsubstantiated claims for any dietary supplement, food, drug, or device as part of a settlement with the Federal Trade Commission. In June 2003, the FTC and the Food and Drug Administration (FDA) announced a coordinated action against Seasilver USA, Inc. and Americaloe, Inc., their owners, and two of the companies’ principal distributors. The FTC alleged that the defendants promoted Seasilver through false claims that it was clinically proven to treat or cure 650 diseases, including cancer and AIDS. Under the settlements, the defendants will pay a total of $4.5 million in consumer redress. In its settlement with FDA, Seasilver agreed to destroy misbranded Seasilver product worth $5.3 million dollars. Seasilver also agreed to discontinue manufacturing and distributing misbranded products, including Seasilver, in the future.

“The claims for Seasilver threatened consumers’ health by encouraging delays and replacements for proven treatments,” said Howard Beales, Director of the FTC’s Bureau of Consumer Protection. “The FTC and FDA are committed to taking aggressive action against false and unsubstantiated claims in the dietary supplement market. Products touted as cure-alls almost always cure nothing.”

The FTC’s complaint named Seasilver USA, Inc. and Americaloe, Inc., their principals, Bela and Jason Berkes, and two Seasilver distributors, Brett Rademacher and David R. Friedman, D.C. The two companies and the Berkes are located in Carlsbad, California; Rademacher and Dr. Friedman are located in Anchorage, Alaska, and Wilmington, North Carolina, respectively. The complaint alleged that the defendants’ ads and promotional materials represented that Seasilver treats or cures cancer; enables nine out of ten diabetes patients to stop their insulin medication; and causes rapid, substantial, and permanent weight loss without dieting. The FTC charged that these and other claims are false and unsubstantiated. Seasilver is a liquid dietary supplement purported to contain, among other ingredients, aloe vera, phyto-silver sea vegetables, the herb Pau D-Arco, and cranberry concentrate.

The Settlements

Three separate stipulated final judgments prohibit the defendants from making, or assisting others in making, false or misleading claims about the health benefits, efficacy, or safety of Seasilver or any covered product. Specifically, the orders prohibit the defendants from misrepresenting that Seasilver is effective in the treatment of multiple myeloma; non-Hodgkin’s lymphoma; lung, breast, and prostate cancer; brain tumors; diabetes; AIDS; typhoid; and anthrax, among other ailments. The orders also enjoin the defendants from representing that Seasilver or any other product causes rapid, substantial, or permanent weight loss without reducing caloric intake. In addition, the orders prohibit the defendants from making any representation about the health benefits, efficacy, or safety of any covered product without reliable scientific evidence to support the representation.

The order against Seasilver, Americaloe, Jason Berkes, and Bela Berkes contains a $120 million judgment that will be suspended upon the defendants’ payment of $3 million for restitution, based on their demonstrated inability to pay more. In the event that it is found that the Berkes misrepresented their financial condition or failed to provide required security interests, the Berkes must pay the full amount of the judgment. The orders against the distributors, Friedman and Rademacher, require them to pay $1 million and $500,000, respectively.

The settlements also contain standard recordkeeping provisions to assist the FTC in monitoring the defendants’ compliance.

The Commission vote authorizing staff to file the stipulated final judgments with all of the defendants was 5-0. The final orders were entered by the U.S. District Court, District of Nevada, in Las Vegas, on March 4, 2004.

NOTE: These stipulated final judgments are for settlement purposes only and do not constitute an admission by the defendants of a law violation. Stipulated final judgments have the force of law when signed by the judge.

Copies of the stipulated final judgments are available from the FTC’s Web site at http://www.ftc.gov and also from 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 in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad

(FTC Matter No. X030064)
(Civil Action No. CV-S-0676-RHL-LRL)