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Response to Atman (Reply #107)

Sun Oct 20, 2013, 05:36 PM

121. You'll be happy to know then, that the company founder was sent to prison and heavly fined.

 



Enzyte is an herbal nutritional supplement originally manufactured by Berkeley Premium Nutraceuticals (now Vianda, LLC) of Cincinnati, Ohio. The manufacturer has claimed that Enzyte promotes "natural male enhancement," which is a euphemism for penile enlargement. However, its effectiveness has been called into doubt and the claims of the manufacturer have been under scrutiny from various state and federal organizations. Kenneth Goldberg, M.D., medical director of the Male Health Center at Baylor University, says, "It makes no sense medically. There's no way that increasing blood flow to the penis, as Enzyte claims to do, will actually increase its size."

In March 2005, following thousands of consumer complaints to the Better Business Bureau, federal agents raided Berkeley facilities, gathering material that resulted in a 112-count criminal indictment. The company's founder and CEO, Steve Warshak, and his mother, Harriet Warshak, were found guilty of conspiracy to commit mail fraud, bank fraud, and money laundering, and in September 2008 they were sentenced to prison and ordered to forfeit $500 million in assets. The convictions and fines forced the company into bankruptcy, and in December 2008 its assets were sold for $2.75 million to investment company Pristine Bay, which continued operations.

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Federal indictment and trial

Thousands of consumer complaints were made to the Better Business Bureau about the company's business practices, especially the "autoship" program that repeatedly charged customers' credit cards for refills even after they canceled their orders. Federal agents raided Berkeley facilities in March 2005, gathering material that led to criminal charges. On September 21, 2006, Berkeley Premium Nutraceuticals; its owner and president, Steven Warshak; and five other individuals were indicted by the United States, Southern District of Ohio, U.S. Attorney Greg Lockhart, on charges of conspiracy, money laundering, and mail, wire, and bank fraud. The indictment alleged that the company defrauded consumers and banks of US$100 million. The United States Food and Drug Administration, Internal Revenue Service, United States Postal Inspection Service, and other agencies participated in the investigation. The federal fraud trial began on January 8, 2008.

In testimony during the trial, a former executive with Berkeley testified that the enhancements the company claimed were achieved by use of Enzyte were fabricated, and the company defrauded customers by continuing to charge them for additional shipments of the supplement. He further testified that company employees were instructed to make it as difficult as possible for unhappy customers to receive refunds.
Conviction and sentencing

On February 22, 2008, Steven Warshak was found guilty of 93 counts of conspiracy, fraud, and money laundering. On August 27, 2008, he was sentenced by U.S. District Judge Arthur Spiegel to 25 years in prison and ordered to pay $93,000 in fines. His company, Berkeley Premium Nutraceuticals, along with other defendants, was ordered to forfeit $500 million. His 75-year-old mother, Harriet Warshak, was sentenced to two years in prison but released on bond pending appeal after turning over her house, bank accounts, and other assets related to her crimes.

Both Steven and Harriet Warshak appealed their convictions. The United States Court of Appeals for the Sixth Circuit in United States v. Warshak (6th Cir. Dec. 14, 2010) 631 F.3d 266, upheld Steven Warshak's convictions and all convictions against Harriet Warshak except for money laundering and vacated their sentences, remanding the sentencing to the lower court.

On September 21, 2011, Steven Warshak's sentence was reduced from 25 years to 10 years. With credit for time served, he could be out in five years. His mother's sentence was reduced from two years to one day, and she never served any time in jail. Factors in reducing the sentence were that the amount of total loss by customers may have been less than $400 million and that the sentences of co-defendants were only two years.

http://en.wikipedia.org/wiki/Enzyte#Federal_indictment_and_trial

What I find both disturbing and amazed by all this, is there were actually that many people out there scammed by this (as evidenced by the amount of money the company raked in).

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LineLineLineLineReply You'll be happy to know then, that the company founder was sent to prison and heavly fined.
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