Direct Response Marketer Banned

The mastermind behind a scheme to sell dietary supplements using claims the Federal Trade Commission alleged were false and unsubstantiated has been banned from the direct response marketing of foods, unapproved drugs, and dietary supplements. The defendant, A. Glenn Braswell, who was already under another consent decree stemming from alleged violations of the FTC Act, also will pay $1 million and turn over assets worth $3.5 million to settle the FTC’s charges. The FTC also is announcing a settlement with one of the “expert” endorsers for Braswell’s dietary supplement products.

“We charged Braswell with peddling empty promises to consumers battling serious illnesses,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection. “This settlement will prevent him from profiting from these sorts of deceptive claims in the future, and deter others who may think they can get away with similar practices.”

Braswell sold dietary supplements, mostly through direct mail advertising, including the Journal of Longevity, a direct mail ad that purported to be a health-information magazine. The FTC alleged these ads, aimed at elderly consumers, used false and misleading claims of medical or scientific “breakthroughs,” expert endorsements, and misrepresented the results and applicability of scientific studies. According to the FTC, Braswell’s operation was one of the largest U.S. direct mail marketers of health-related products during the time he was running the companies.

The products the FTC targeted, Lung Support Formula, AntiBetic Pancreas Tonic, Gero Vita G.H.3, ChitoPlex, and Testerex, were supposed to cure, prevent, or treat a number of illnesses, such as Alzheimer’s disease, diabetes, and emphysema. Braswell is the former owner of the California-based corporate defendants and controlled the misleading advertising and marketing materials.

In settling the FTC’s charges, Braswell not only is banned from direct response marketing (with a few exemptions, such as FDA approved product claims), he also is prohibited from making false, misleading, or unsubstantiated health claims, misrepresenting endorsements, making unsubstantiated endorsements, or misrepresenting scientific evidence for all foods, drugs, dietary supplements, and health-related products and services. Braswell already was under a 1983 consent order to resolve the FTC’s charges related to his marketing of baldness and anti-cellulite products.

Today, the FTC also is announcing a settlement with defendant Hans Kugler. The FTC alleged that Kugler was an expert endorser for two of the products, Lung Support Formula and Gero Vita G.H.3. The FTC’s complaint charged that Kugler did not have the required expertise or a reasonable basis for his endorsements. The settlement prohibits him from making future endorsements, unless they are based on competent and reliable scientific information and an actual exercise of his represented expertise, as well as misrepresentations about scientific tests or studies. Kugler will pay $15,000 in settlement of the allegations.

With today’s announced settlements, all of the seven corporate defendants and four of the five individual defendants have settled the FTC’s charges in this case. Litigation continues against Chase Revel.

The Commission votes authorizing staff to file the stipulated final orders were both 4-0. The stipulated final orders for permanent injunction were filed in the U.S. District Court for the Central District of California on October 21, 2005 (Kugler) and December 28, 2005 (Braswell).

NOTE: These stipulated final orders are for settlement purposes only and do not constitute an admission by the defendants of law violations. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

Copies of the stipulated final orders 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 in English or Spanish (bilingual counselors are available to take complaints), 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.