| DEBRA VALENTINE General Counsel JEFFERY A. KLURFELD THOMAS J. SYTA DAVID P. FRANKEL Federal Trade Commission ATTORNEYS FOR PLAINTIFF UNITED STATES DISTRICT COURT FEDERAL TRADE COMMISSION, Plaintiff, v. ENFORMA NATURAL PRODUCTS, INC., Civil Number Plaintiff, the Federal Trade Commission (the "Commission"), filed a complaint for a permanent injunction and other equitable relief against Enforma Natural Products, Inc., Andrew Grey, and Fred Zinos, pursuant to Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 53(b), alleging violations of Sections 5 and 12 of the FTC Act, 15 U.S.C. §§ 45 and 52. The Commission and defendant Zinos have stipulated to the entry of the following Stipulated Final Order for Permanent Injunction and Settlement of Claims for Monetary Relief ("Order") in settlement of the Commission's complaint against defendant Zinos. The Court, being duly advised in the premises, finds: FINDINGS 1. This Court has jurisdiction of the subject matter of this action and of defendant Zinos. Venue in the Central District of California is proper. 2. The Complaint states a claim upon which relief can be granted, and the Commission has authority to seek the relief it has requested under Sections 5, 12 and 13(b) of the FTC Act, 15 U.S.C. §§ 45, 52, and 53(b). 3. The acts and practices of the defendant Zinos were or are in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. § 44. 4. Defendant Zinos waives all rights to seek judicial review of, or otherwise challenge or contest the validity of, this Order. Defendant Zinos also waives any claim that he may have held under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action to the date of this Order. 5. This action and the relief awarded herein are in addition to, and not in lieu of, other remedies as may be provided by law. 6. Each party shall bear its own costs and attorneys' fees. 7. Defendant Zinos, without admitting or denying the allegations of wrongdoing set forth in the Commission's Complaint, stipulates and agrees to entry of this Order under Section 13(b) of the FTC Act, 15 U.S.C. § 53(b). 8. Pursuant to Federal Rule of Civil Procedure 65(d), the provisions of this Order are binding upon defendant Zinos, and his agents, servants, employees and attorneys, and all other persons or entities in active concert or participation with them, who receive actual notice of this Order by personal service or otherwise. 9. Entry of this Order is in the public interest. DEFINITIONS For the purposes of this Order, the following definitions shall apply:
CONDUCT PROHIBITIONS I. IT IS HEREBY ORDERED that defendant Zinos, directly or through any corporation, partnership, subsidiary, division, or other device, and their officers, agents, servants, employees and attorneys, and all other persons or entities in active concert or participation with them who receive actual notice of this Order, by personal service or otherwise, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale or distribution of the Enforma System, Fat Trapper, or Exercise In A Bottle, or any other product, service or program in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, including through the use of the names "Fat Trapper" and "Exercise In A Bottle," that such product, service or program:
unless at the time the representation is made, defendant Zinos possesses and relies upon competent and reliable scientific evidence that substantiates the representation. II. IT IS FURTHER ORDERED that defendant Zinos, directly or through any corporation, partnership, subsidiary, division, or other device, and their officers, agents, servants, employees, and attorneys, and all other persons or entities in active concert or participation with them who receive actual notice of this Order, by personal service or otherwise, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any product, service or program in or affecting commerce, are hereby enjoined from representing, in any manner, expressly or by implication, including through use of the names "Fat Trapper" and "Exercise In A Bottle," that any such product, service or program enables consumers to lose weight, avoid gaining weight, or maintain weight loss, unless defendant Zinos discloses, clearly and prominently, that reducing caloric intake and/or increasing exercise is required to lose weight;
III. IT IS FURTHER ORDERED that defendant Zinos, directly or through any corporation, partnership, subsidiary, division, or other device, and their officers, agents, servants, employees, and attorneys, and all other persons or entities in active concert or participation with them who receive actual notice of this Order, by personal service or otherwise, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of the Enforma System, Fat Trapper, or Exercise In A Bottle; or any other food, dietary supplement, drug, device; or weight loss product, service, or program; in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, about the health or weight loss benefits, performance, safety, or efficacy of such product, service or program, unless, at the time the representation is made, defendant Zinos possesses and relies upon competent and reliable scientific evidence that substantiates the representation. IV. IT IS FURTHER ORDERED that defendant Zinos, directly or through any corporation, partnership, subsidiary, division, or other device, and their officers, agents, servants, employees, and attorneys, and all other persons or entities in active concert or participation with them who receive actual notice of this Order, by personal service or otherwise, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any product, service or program, in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, the existence, contents, validity, results, conclusions or interpretations of any test, study, or research. V. Nothing in this Order shall prohibit defendant Zinos from making any representation for any drug that is permitted in the labeling for such drug under any tentative final or final standard promulgated by the Food and Drug Administration, or under any new drug application approved by the Food and Drug Administration. Nothing in this Order shall prohibit defendant Zinos from making any representation for any product that is specifically permitted in labeling for such product by regulations promulgated by the Food and Drug Administration pursuant to the Nutrition Labeling and Education Act of 1990. RECORD KEEPING VI. IT IS FURTHER ORDERED that defendant Zinos, for a period of ten (10) years after the last date of dissemination of any representation covered by this Order, shall maintain and upon request make available to the Commission for inspection and copying:
MONITORING VII. IT IS FURTHER ORDERED that defendant Zinos, for a period of ten (10) years after the date of entry of this Order, shall deliver a copy of this Order to all current and future principals, officers, directors, and managers, and to all current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this Order, and shall secure from each such person a signed and dated statement acknowledging receipt of the Order. Defendant Zinos shall deliver this Order to current personnel within thirty (30) calendar days after the date of service of this Order, and to future personnel within thirty (30) calendar days after the person assumes such position or responsibilities. Defendant Zinos shall maintain and upon request make available to the Commission for inspection and copying each such signed and dated statement for a period of five (5) years after such statement is signed. VIII. IT IS FURTHER ORDERED that defendant Zinos, within five (5) business days of entry of this Order, shall notify the Commission of (1) his residence address and mailing address; (2) his telephone number(s); (3) the name, address, and telephone number of his employer; (4) the full names of his employer's principals; (5) if applicable, the names of his supervisors, and (6) a description of his employer's activities, and the defendant's duties and responsibilities. IX. IT IS FURTHER ORDERED that defendant Zinos, for a period of ten (10) years after the date of entry of this Order, shall notify the Commission of any changes in his residence or mailing address or employment status. Notice of changes in employment status shall include: (1) the new employer's name, address and telephone number; (2) the full names of the employer's principals; (3) if applicable, the names of defendant's supervisors, and (4) a description of the employer's activities, and defendant's duties and responsibilities. X. IT IS FURTHER ORDERED that defendant Zinos shall, within sixty (60) calendar days after the date of entry of this Order, and at such other times as the Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which he has complied with this Order. XI. IT IS FURTHER ORDERED that the Commission is authorized to monitor the compliance of defendant Zinos with this Order by all lawful means, including but not limited to the following means:
RIGHT TO REOPEN XII. IT IS FURTHER STIPULATED AND ORDERED that, within fifteen days after entry of this Order, defendant Zinos shall submit to the Commission a truthful sworn statement, in the form shown on Appendix A, that shall acknowledge receipt of this Order and shall reaffirm and attest to the truth, accuracy and completeness of the financial statement previously submitted to the Commission. The Commission's agreement to this Order is expressly premised on the truthfulness, accuracy and completeness of such financial statement. If, upon motion by the Commission, the Court finds that the such financial statement contains any material misrepresentation or omission, the Commission may request that this Order be reopened to allow the Commission to modify the monetary liability of the defendant; provided, however, that in all other respect this Order shall remain in full force and effect unless otherwise ordered by the Court; and, provided further, that proceedings instituted under this provision would be in addition to, and not in lieu of, any other civil or criminal remedies as may be provided by law, including any other proceedings that the Commission may initiate to enforce this Order. For purposes of this Paragraph XII, defendant Zinos waives any right to contest any of the allegations in the Complaint. ACKNOWLEDGMENT OF RECEIPT OF ORDER XIII. IT IS FURTHER ORDERED that within five (5) business days from the date of entry of this Order, defendant Zinos shall submit to the Commission a truthful sworn statement, in the form shown on Appendix A, that shall acknowledge receipt of this Order. RETENTION OF JURISDICTION XIV. IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order. SO STIPULATED:
SO ORDERED DATED: __________ APPENDIX A UNITED STATES DISTRICT COURT FEDERAL TRADE COMMISSION, Plaintiff, v. ENFORMA NATURAL PRODUCTS, INC., Civil Number AFFIDAVIT OF FRED ZINOS Fred Zinos, being duly sworn, hereby states and affirms: 1. My name is Fred Zinos. I am a citizen of the United States and am over the age of eighteen. I have personal knowledge of the matters discussed in this declaration, and if called as a witness, I could and would competently testify as to the matters stated herein. I am a defendant in the above captioned action. 2. My current business address is ________________________. My current business telephone number is ________________. My current residential address is ________________. My current residential telephone number is _____________. 3. On (date) __________, I received a copy of the Stipulated Final Order and Settlement of Claims for Monetary Relief, which was signed by the Honorable ___________, United States District Court Judge for the Central District of California. A true and correct copy of the Order that I received is appended to this Affidavit. 4. I reaffirm and attest to the truthfulness, accuracy and completeness of the financial statement that I submitted to the Federal Trade Commission on or about __________. I hereby declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on (date) __________, at (city, state) __________, __________. (Name of Defendant) STATE OF __________ BEFORE ME this day personally appeared , who being first duly sworn, deposes and says that s/he has read and understands the foregoing statement and that s/he has executed the same for the purposes contained therein. SUBSCRIBED AND SWORN TO before me this day of , 199 , by . S/he is personally known to me or has presented (state identification) as identification. Print Name NOTARY PUBLIC, Commission Number |