Florida Supplement Maker Indicted on Fraud Charges

USDOJ News Release
October 23, 2007

R. Alexander Acosta, U.S. Attorney for the District of Southern Florida, in conjunction with FDA, IRS and U.S. Postal Inspection Service, reported the arraignment and pre-trial detainment of Frank Sarcona (aka Frank Sarcone, aka Dave Johnson), who was earlier indicted by a West Palm Beach, Fla., grand jury on 55 separate counts related to charges of fraudulent sale of dietary supplements. Among the charges were: 10 counts of introduction of a misbranded food, 12 counts of money laundering, 25 counts of mail fraud, three counts of wire fraud, three counts of criminal contempt of court, one count of conspiracy to commit mail fraud, wire fraud and criminal contempt, and one count of conspiracy to commit money laundering.

The superseding indictment alleges that beginning in January 2000 and continuing to October 2004, Sarcona conspired with George Forgione and others to defraud tens of thousands of consumers of millions of dollars through the sale of a misbranded dietary supplement marketed as Lipoban. Federal officials charged Sarcona and Forgione claimed Lipoban, a chitosan-based product, could eat away excess weight without “torturous” dieting or exercising. It was offered in capsules containing 11,500 mg of Lipoban Ultra chitosan and mineral extract, with a recommended dose of two capsules daily. The product was sold through direct mail, the Internet and national newspaper advertisements.

The U.S. Attorney’s office explained the Lipoban duo masqueraded as a health care clinic engaged in clinical studies and the treatment of obesity. They placed a medical insignia on their mailings and forms; represented that Dr. Joseph Maya was the medical director; gave customers a business card listing Dr. Maya with a Boca Raton address; stated they were engaged in a test study and were staffed by a team of researchers, as well as weight loss and nutrition professionals; and they assigned each customer what appeared to be a unique number, such “test participant number 731”.

According to the indictment, this so-called clinic was, at various times, a mail drop box, the residence of a defendant and an office in an industrial park. Further, Dr. Jose (not Joseph) Maya is not licensed to practice medicine in the United States, but in Mexico. In addition, there were no test studies, no researchers, and the “nutrition professionals” were really telephone customer service operators hired to process orders and perform clerical work. None were trained weight loss and nutrition professionals, nor medical personnel. Most customers received the same “test participant number”, which the feds said was merely a way for Sarcona and Forgione to track the mailing list or advertisement generating the response. Also, the defendants falsely claimed two doctors endorsed their product, yet they failed to state those doctors, who merely recommended generic chitosan, recommended usage in conjunction with diet and exercise.

Following Sarcona’s arraignment, U.S. Magistrate Judge James Hopkins stated the defendant had an extensive prior record of fraudulent marketing, including numerous alias and bank stamps for accounts in associates’ names. In a July 1999 FTC case against him, Sarcona was ordered to post a performance bond prior to engaging, directly or indirectly, in any business related to weight loss products or services. This bond was to be used to compensate anyone injured as a result of any deceptive practice, misrepresentation or violation by Sarcona of the court’s order. However, Sarcona never posted the bond. In an interesting twist, the Feds also revealed documents filed by Sarcona, which claim he is a sovereign citizen of the Republic of Florida and does not recognize the laws or authority of the United States.

Thus, Hopkins labeled Sarcona was “an economic danger to the community, a serious risk to obstruct justice as well as a flight risk”, ordering him detained until trial, which has not yet been set; at the time of the arraignment, Forgione had not been arrested.

This article was posted on March 7, 2010.

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