In a separate statement, concurring in part and dissenting in part, Leibowitz noted the possibility that, had the Commission rejected the settlement, it would not have been able to take advantage of the recently enacted bankruptcy law’s limitations on state law homestead provisions in this case. “Despite the timing issues in this case,” the Commission statement noted, “the Commission is committed to exploring ways to employ the new limitations on homestead exemptions in future cases.” According to the statement, “Homestead exemptions have too often frustrated the Commission’s ability to redress consumer injury suffered at the hands of malefactors and the Commission will act aggressively to ensure that these people will no longer live high at the expense of their victims.” Unfortunately, in this case the timing made it difficult for the Commission to apply the new bankruptcy law provisions. In a Commission statement, the agency noted that recent changes to the bankruptcy law suggest a potential mechanism by which the Commission could obtain more assets for consumer relief.
The Commission vote authorizing staff to file the complaint and stipulated final judgment in the Creaghan Harry matter was 4-1, with Commissioner Jon Leibowitz dissenting. If it is found that the financial statements were inaccurate, the entire $5.9 million will immediately become due.įinally, the settlement contains various recordkeeping requirements to assist the FTC in monitoring the defendant’s compliance. Based on financial statements provided by the defendant, the settlement contains a suspended judgment of $5.9 million, the total amount of estimated consumer injury. In addition, to paying consumer redress, the settlement bars Harry from violating the CAN-SPAM Act.
In fact, according to the FTC, 40,000 spam messages claiming Harry’s products would stop or reverse the aging process, cause weight loss, increase muscle, or regrow hair and remove wrinkles, ended up in the FTC’s spam database.
The settlement bars the Boca Raton, Florida-based defendant from making claims about any products sold over the Internet, including health and weight-loss claims, without scientific evidence.įiled in July 2004, the FTC’s complaint charged that the defendant violated the FTC Act by making false claims, and violated the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act) by sending e-mail that disguised its source, did not provide a way for recipients to opt-out of receiving future messages, and did not give a valid physical postal address. Harry, doing business as Hitech Marketing, Scientific Life Nutrition, and Rejuvenation Health Corporation, will pay $485,000 in consumer redress to settle Federal Trade Commission charges that he used millions of illegal spam messages to tout the bogus anti-aging properties of HGH herbal supplements.