Orders Australian Defendants to Pay $2.2 Million
A U.S. district court judge has ordered a permanent halt to an operation that used illegal spam to make bogus claims for human growth hormone products that contained no human growth hormone and diet patches that did not provide the miraculous results they claimed. Judge Marvin E. Aspen ruled that the operators were violating federal laws and ordered them to pay a total of $2.2 million – the entire amount of their ill-gotten gain.
In April 2004, the FTC filed legal charges against Global Web Promotions Pty Ltd., an Australian company that the FTC alleges is responsible for massive amounts of spam in the United States. Global Web claimed its human growth hormone products “HGH” and “Natural HGH” could “maintain [a user’s] appearance and current biological age for the next 10 to 20 years.” Experts cited by the FTC disputed the claims, and the FTC alleged the claims were false. The products do not contain growth hormone of any sort, according to papers filed with the court. The operation also promoted a diet patch it sold, claiming it could result in weight loss of as much as six pounds per week. The FTC alleged the claims were unsubstantiated. The diet patch was sold for $80.90 and the HGH products cost $74.95.
In addition to making the deceptive and unsubstantiated claims, which the FTC alleged violate the FTC Act, the FTC also alleged that Global Web and its principals forged headers on e-mail to make it appear that they came from an innocent third parties – a practice known as spoofing. Undeliverable e-mail is returned to the innocent victims, often flooding their servers and interfering with normal operations. Spoofing violates the CAN-SPAM Act.
At the request of the FTC, the judge ordered a temporary halt to the claims and issued orders to the U.S. companies filling the orders for the patches and HGH products to stop filling Global Web’s orders in the United States. The court also temporarily froze assets located in the United States.
The FTC charged Global Web Promotions Pty Ltd., Michael John Anthony Van Essen, and Lance Thomas Atkinson with violations of the FTC Act and the CAN-SPAM Act. In addition to barring the false claims in its final judgment, the court concluded that the defendants made $490,280 selling the bogus diet patches and HGH products, and earned $1,709,982.74 sending illegal spam for affiliates that also made deceptive claims for dietary supplements. The court ordered the defendants to give up $2,200,262 – the total of their ill-gotten gains.
The Global Web Promotions Pty case was brought with the assistance of the Australian Competition and Consumer Commission and the New Zealand Commerce Commission.
Copies of the complaint and default judgment 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.
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