FTC, FDA Actions Put Seasilver Makers Out of Business
Posted on: 06/19/2003
WASHINGTON--Companies selling a liquid supplement purported to aid with conditions as diverse as AIDS and obesity had product seized for unsubstantiated claims on product labels and literature. On June 13, the Federal Trade Commission (FTC) filed a complaint with the U.S. District Court in Nevada against Carlsbad, Calif.-based Seasilver USA Inc. and its subsidiary, Americaloe Inc., stating the companies were making false and unsubstantiated claims. The companies, due to the expenses involved with changing labels, "substantially curtailed operations," according to a Seasilver press release. In an article appearing in the June 18 edition of The San Diego Union-Tribune (www.uniontrib.com), it was reported the company sent home hundreds of employees June 16. On the companies' Web site (www.seasilver.com), employees were informed that checks for the week ending June 15 would be hand-delivered.
Seasilver is a liquid multivitamin, mineral, amino acid supplement containing aloe vera, "phyto-silver" (a reportedly plant-based silver), sea vegetables Pau D'Arco and cranberry concentrate; a 32-oz. bottle ran $39.95. The defendants, which included Bela and Jason Berkes, Brett Rademacher and David Friedman, claimed Seasilver USA earns $180 million per year in Seasilver sales.
FTC reported the defendants promoted Seasilver as a safe and effective way to treat or cure 650 diseases, such as cancer. FTC was granted a temporary restraining order that prohibits the companies from selling or distributing product until labeling changes have been made.
In a June 19 FTC press release, the agency reported it and the Food and Drug Administration (FDA) combined forces against the fraudulent claims these companies were making. On June 16, U.S. Marshalls, acting on behalf of FDA, seized 132,480 bottles totaling $5.3 million from the companies' headquarters.
"This is the sort of intolerable health fraud I had in mind when I announced six months ago that the FDA will take vigorous actions against firms that prey on consumers and patients by selling worthless dietary supplements as cures for serious and chronic diseases and conditions," said Mark B. McClellan, M.D., Ph.D., FDA commissioner.
This is not the first time Seasilver has had a run-in with FDA; as recently as December 2002, FDA cited the company for using improperly cleaned equipment and for permitting employees to work the production line in street clothes. And in April 2002, FDA wrote Berkes, threatening regulatory action if the company did not stop making unsubstantiated claims on its product.
A preliminary injunction hearing is scheduled for June 26 in Las Vegas.