$24M released for supplement company’s customers
May 8, 2012, 4:21 PM
CINCINNATI (AP) – The U.S. Justice Department has released $24 million to pay people who bought products promising sexual enhancement and other benefits that were sold through fraudulent practices, authorities said Tuesday.
The money is from forfeitures by Berkeley Premium Nutraceuticals founder Steve Warshak and 10 other executives. Warshak was convicted in 2008 of conspiracy, fraud and money laundering.
Among their products was Enzyte, touted as improving male sexual performance in commercials featuring a satisfied character known as “Smilin’ Bob.”
Company officials were accused of bilking thousands of customers who bought Cincinnati-based Berkeley’s herbal supplements by making unauthorized charges on their credit cards, refusing refunds, lying to banks and using false advertising.
Federal authorities said that more than 138,000 claims have been approved for customers across the country, and new customer claims are being accepted through July 9.
The compensation will be based on company records of credit card transactions from 2001 to 2005. The amount of money people get back will depend on the number of valid claims received and won’t top the original purchase price, a claims website advises.
Authorities initially said customers lost some $400 million, but that estimate was reduced to $100 million during appeals. Warshak’s prison sentence was also reduced from 25 years to 10 years.
At his new sentencing hearing last year, Warshak told a federal judge that he has turned his life around and learned a “life-changing lesson.” Warshak said he hopes to someday teach a class in business ethics.
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