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FTC levies nearly $27 million judgment against marketers' fake hoodia weight-loss claims

Consumer Reports News: November 03, 2011 05:08 PM

The Federal Trade Commission announced it has settled its two year old case against two companies which hyped weight-loss products based on "hoodia," a substance derived from the Hoodia gordonii cactus of southern Africa.

The 2009 FTC complaint alleged executives at Nutraceuticals International LLC and Stella Labs LLC falsely marketed hoodia products as effective weight-loss and appetite-suppression supplements even though there has been no scientific evidence of such properties for the plant material. The complaint further alleged that some of the companies' hoodia products didn't even contain the chemical.

David Romero, a principal at both companies was assessed a $22.5 million fine for his role in the bogus marketing claims. Romeo forfeited to the FTC a Vermont vacation home and $635,000 in business loans as part of his settlement.

A $4 million judgment was also assessed against Deborah Vickey, a marketing executive at Nutraceuticals International. Her judgment has been suspended over her inability to pay the fine, however, says the FTC.

No monetary fine was levied against Craig Payton, another principal at Nutraceuticals International because his assets were already seized in another unrelated federal drug case, said the FTC.

In the settlement, all the defendants have also been barred from making any false or unsupported claims about foods, drugs, or dietary supplements; from helping others to make these claims; and from misrepresenting the results of any scientific study.

In FTC ‘Hoodia’ Weight Loss Case, Settlement Requires Defendants to Turn Over Assets [FTC]

Paul Eng

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