FOR RELEASE: April 4, 1991
FTC CITES DECEPTIVE MARKETING OF DIET PRODUCT AND FUEL SAVING DEVICE IN CHARGES AGAINST AMERDREAM CORP. AND ADVANCED AUTOMOTIVE TECHNOLOGIES
In a case involving both a diet program and a purported gas- saving device, the Federal Trade Commission charged in federal court on Tuesday that Amerdream Corporation and Advanced Auto- motive Technologies, Inc., as well as principals of both com- panies, made false and misleading claims in the marketing and sale of their products. The court granted a temporary restrain- ing order against all defendants prohibiting the deceptive practices late Wednesday afternoon. The FTC also is seeking a permanent injunction and funds for consumer redress. The products involved in the case are the "Ultimate Solu- tion Diet Program," and the "PetroMizer," a device purported to improve gas mileage and reduce emissions. Named in the FTC complaint are Amerdream Corporation and Amerdream Securities Corporation (collectively, "Amerdream"), Advanced Automotive Technologies, Inc. ("Advanced Automotive"), Frank J. Sarcone, president of both Amerdream and Advanced Automotive, and Robert H. Morrison Jr., an officer of Advanced Automotive.
The court also froze the assets of the corporate defendants and Frank J. Sarcone.
The Ultimate Solution Diet Program:
The FTC complaint alleges that, in marketing and selling its diet program, Amerdream and Sarcone have promised consumers who tested the program (after paying $230 to $345 each to do so) that they would receive $1,000 in U.S. Treasury Bonds, and that
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dissatisfied consumers would receive a full refund. In fact, the complaint alleges, Amerdream has failed to deliver any kind of bond to many consumers, and those consumers who did receive a bond received only coupon instruments that were neither U.S. Treasury Bonds nor guaranteed by the U.S. government. Further- more, the complaint alleges, Amerdream has not provided refunds to many consumers who requested them.
Amerdream also has falsely claimed that a Harvard University study has shown an ingredient in the Ultimate Solution's "Night Trim" Diet Tablets is effective for weight loss and for reducing cholesterol and blood pressure levels, according to the complaint.
In the same complaint, the FTC alleges that Advanced Automotive, Sarcone, and Morrison have placed full-page ads for the PetroMizer in newspapers throughout the country. The device sold for $59.95 to $79.95, and has been on the market since at least September 1990. According to the complaint, the ads made numerous false representations, including that:
-- the device increases gas mileage by more than 28 percent;
-- the device reduces automobile emissions, including eliminating carbon monoxide emissions;
-- the PetroMizer was developed under a grant from NASA;
-- the U.S. Army issued an official report on tests of the PetroMizer showing its fuel economy benefits; and
-- the PetroMizer was the "first and only" such device "ever" to receive a State of California Air Resources Board exemption.
In addition, the complaint alleges, Advanced Automotive had no reasonable basis for its mileage-improvement, horsepower and acceleration-improvement, or emissions-reduction claims. More- over, the defendants allegedly failed to disclose that the Cali- fornia Air Resources Board exemption doesn't state that the PetroMizer reduces emissions, but merely that the device does not harm the emissions system of any vehicle in which it is installed, according to the FTC complaint.
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In its investigation of the claims made for the PetroMizer, the FTC received information and assistance from law enforcement agencies in several states that were also looking at the device, including the Arizona Attorney General's office. The FTC's Division of Marketing Practices and its Denver Regional Office jointly handled the investigation in this case.
Amerdream has offices in North Miami Beach, Florida and in Kula, Hawaii. Advanced Automotive is located in Phoenix, Arizona. Both Morrison and Sarcone reside in Arizona. The case was filed in U.S. District Court for the District of Arizona, in Phoenix.
NOTE: The Commission files a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.
Copies of the complaint 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: Lydia Parnes, Division of Marketing Practices, 202-326-3126
Claude C. Wilde III, Denver Regional Office 1405 Curtis Street, Suite 2900 Denver, CO 80202-2393 303-844-2271
(Civil Action No. CIV 91-0505 PHX RCB)