FOR RELEASE: JANUARY 16, 1992
FEDERAL COURT BANS FALSE AND MISLEADING CLAIMS FOR DIET PROGRAM AND PURPORTED GAS-SAVING DEVICE FOLLOWING FEDERAL TRADE COMMISSION CHARGES
A federal court in Arizona has permanently banned false and misleading claims made by Amerdream Corporation for its "Ultimate Solution Diet Program," and by Advanced Automotive Technologies, Inc. for the "PetroMizer," a purported gasoline-saving device, following Federal Trade Commission charges. The court also ordered the companies -- and an Arizona man who is president of both these firms -- to pay nearly $675,000 for consumer redress.
The default judgments stem from an April 1991 FTC complaint against the makers and marketers of Ultimate Solution and the PetroMizer, and alleging that they made numerous false and deceptive claims in their advertising and marketing practices. Among the claims were that consumers of the Ultimate Solution program would receive a 100 percent money-back guarantee and a $1,000 U.S. Treasury Bond just for buying and testing a two-month supply, which the court now has found to be false. The court also found that Amerdream and its president Frank J. Sarcone, who is also president of Advanced Automotive, falsely claimed that a Harvard University study showed an ingredient in the Ultimate Solution's "Night Trim" diet tablets to be effective in achieving significant weight loss and reducing cholesterol levels and blood pressure.
In addition, the court found that Advanced Automotive and Sarcone falsely represented that the PetroMizer increases gas mileage by more than 28 percent, increases automobile horsepower and acceleration by 11 percent, and reduces automobile emissions, including a 100 percent reduction in carbon monoxide emissions, and that various federal and state organizations helped develop or had tested the product and proven its effectiveness.
- more - Amerdream/AAT Injunctions--01/16/92)
Upon the filing of the FTC complaint containing these alle- gations last April, the court immediately granted a temporary re- straining order pending review of the case, and froze the assets of the corporate defendants and the president of both firms, Frank J. Sarcone of Arizona.
After finding that the defendants did, indeed, violate the law as alleged by the FTC, the court now has entered permanent injunctions banning the false and misleading claims, determined that the consumer injury resulting from the claims amounted to a total of at least $673,496, and ordered the defendants to pay that amount into a fund the FTC may use to compensate consumers who purchased the products.
The permanent injunction naming Sarcone and Advanced Auto- motive, signed by the judge Dec. 16, permanently prohibits them from making any false or misleading statement in the promotion or marketing of any after-market automotive product (for Sarcone, the prohibition extends to any product, program or service). Further, the defendants must possess a reasonable basis for making any statement about the performance or efficacy of these types of products. In addition, they are ordered to pay $622,634 for consumer redress.
The other permanent injunction, naming Sarcone, Amerdream, and Amerdream Securities Corporation, prohibits them -- in connection with the marketing of any diet product, program or service -- from making any misrepresentations as to:
-- gifts that purchasers of such products, programs or services receive;
-- the terms and conditions under which refunds will be given to dissatisfied customers; and
-- the identity of those who have tested the product, program or service, or the results of such a test or tests concerning the performance, safety or efficacy of these products, programs or services.
Sarcone, Amerdream, and Amerdream Securities must have substantiation for any representations regarding the performance, safety or efficacy of diet products, programs or services. The court also ordered them to pay $50,862 for consumer redress. This permanent injunction and order was signed by the judge last Oct. 30.
Not yet decided by the court are related FTC charges against the remaining defendant in this case, Robert H. Morrison, Jr., a director of Advanced Automotive Technologies, Inc.
The injunctions announced by the FTC today were issued by the U.S. District Court for the District of Arizona, in Phoenix. Amerdream has offices in North Miami Beach, Florida, and in Kula, Hawaii. Advanced Automotive is located in Phoenix, Arizona.
Copies of the permanent injunctions and orders are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY 1-866-653-4261.
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MEDIA CONTACT: Bonnie Jansen, Office of Public Affairs 202-326-2161
STAFF CONTACT: Eileen Harrington, Division of Marketing Practices, 202-326-3127 or Claude C. Wild III, Denver Regional Office 1405 Curtis Street, Suite 2900 Denver, Colorado 80202-2393 303-844-2271
(Civil Action No. CIV-91-0505 PHX RCB) (amer-aat)