Dietary Supplement Company Faces Fraud Charges

The federal government has brought fraud charges against a dietary supplement company, Berkeley Premium Nutraceuticals, claiming the company bilked consumers out of $100 million using unauthorized credit card charges. Berkeley Nutraceuticals marketed a number of products it said would help in weight control, memory loss and clear skin, but its main business was sexual enhancement products such as Enzyte “male enhancement” pills. According to the indictment, consumers were put into an automatic shipping program, through which their credit cards were billed without authorization. The company also offered full refunds, “double your money back,” and “triple your money back” guarantees that were false. It also is accused of referring complaints to a director of customer care who did not exist. Defendants include Berkeley, its president Steve Warshak, his mother, an in-house lawyer, a computer expert and a warehouse manager. They are accused of fraud, conspiracy to commit money laundering, and of obstructing two federal agencies in their investigations. Last year, Berkeley agreed to pay $2.5 million to settle allegations by attorneys general in Ohio and other states that the company engaged in deceptive practices in the sale of its products. The safety and efficacy of the products were not on trial.

Source: AP Wire, January 9, 2008.