Thursday, February 28, 2008

Smiling Bob Forfeits $33 Million

Back in 2002, USA Today had a story about Smiling Bob, the first penis enlargement program to have television advertisements. A snip from that article:

The folks who market Enzyte offer up their "Independent Customer Study," which involved mailing a questionnaire with the product to 70 men.

According to a company brochure, the most-improved volunteers reported that the length and circumference of their erect penis increased a total of four inches.

"It makes no sense medically," counters Dallas urologist Kenneth Goldberg. There's no way that increasing blood flow to the penis, as Enzyte claims to do, will actually increase its size, he says.

Well, Dr. Goldberg was proved right this week in a Cincinnati court room.

Steven Warshak is the president and owner of Berkeley Premium Nutraceuticals, the makers of "Enzyte" which you might have seen advertised by "Smiling Bob" if you watch Spike TV. It turns out that the product was sold through advertising that included fake "size increase" testimonials, fake customer satisfaction ratings, and fictitious doctors.

The jury also found that it was a common business practice to bill customers who asked for a free-trial, and to refuse to honor money-back guarantees.

The US Postal Inspection Service, the FBI's Cincinnati Field Office, the IRS, and the FDA all provided evidence in the jury trial today in the Southern District of Ohio.

Warshak was convicted of 5 counts of conspiracy to commit money laundering and various types of fraud, conspiracy to obstruct proceedings before the US Federal Trade Commission, 12 counts of mail fraud, three counts of bank fraud, and 73 counts of money laundering.

His mother, Harriet Warshak, aged 75, got 8 counts of conspiracy, bank fraud and money laundering.

His lawyer, Paul Kellogg, aged 41, was convicted of 6 counts of conspiracy including conspiracy to obstruct proceedings before the FDA and FTC, and money laundering.

Steven Pugh, a warehouse manager for Warshak, got 1 count of conspiracy to obstruct proceedings before the FDA.

TCI Media and Berkeley Premium Nutraceuticals were also charged.

The most exciting news is that the jury also found for forfeiture of $33,190,000 worth of assets, including real estate, bank accounts, cars, and insurance policies.

Although Warshak was indicted back on September 21, 2006, the trial just concluded today.

I know I saw Smiling Bob ads as recently as two weeks ago. I'll have to watch Spike TV tonight and see if they are still airing.

The FBI Press Release on the jury's verdict was released on February 26th.