Sellers Beware: Regulatory Action May Lead to Criminal Charges


Having the Federal Trade Commission – or any other government agency – initiate an action against you or your company may seem like very bad news. But it can get much worse. Sometimes, what starts as a civil action by a government regulator can culminate in jail time. This is the hard lesson learned by Donald Barrett, founder and president of iTV Direct, an infomercial company.

Barrett and iTV Direct came under fire by both the Food and Drug Administration and the FTC in 2004 for marketing a purported health product, Supreme Greens. Barrett’s company had marketed the product with some pretty bold claims, such as that the product could prevent major health problems including cancer, Parkinson’s disease and heart disease. The FDA initially issued a warning letter to the company for marketing a non-licensed drug with false and misleading claims. The FDA letter was quickly followed by an FTC lawsuit for deceptive advertising, among other charges.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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