A company that heavily advertised an herbal dietary supplement to the Chinese and Vietnamese-language communities has settled Federal Trade Commission charges of making false and unsubstantiated claims for the product.
The defendants allegedly advertised and sold the product "Sagee" through Chinese-language advertising on radio and television, in newspaper ads, and on the Internet. Some ads also appeared in Vietnamese and English, according to the FTC.
The ads claimed that Sagee can improve brain health and revitalize and rejuvenate the brain, as well as alleviate or treat a number of serious, chronic brain-related diseases.
Under the terms of the settlement the defendants, Sagee U.S.A. Group Inc., and its president, Xiao Hua Li, are prohibited from making any health benefits, performance, or efficacy claims for any product that purports to repair damaged brain cells; improve memory or concentration; slow down the brain’s aging process; and treat or alleviate conditions such as insomnia, migraine headaches, or cerebral embolism, unless the defendants have reliable scientific evidence to substantiate their claims.
The order also requires the defendants to pay $10,000 in redress and contains a $1.38 million avalanche clause that would become due if the court finds that the defendants misrepresented their financial condition.
In addition, the order requires the City of Industry, CA company, to notify its distributors about the terms of the final judgment and warn them that if they fail to have their ads approved in advance, or make any claims prohibited by the order, the company will not ship further products to them.
According to the complaint filed in U.S. District Court in Los Angeles, Sagee purported to treat or alleviate such conditions as insomnia, migraine headaches, neuroticism, schizophrenia, tinnitus, autism, Alzheimer’s disease, cerebral embolism, cerebral hemorrhage, epilepsy, Parkinson’s disease, senile dementia, and stroke. In addition, the defendants’ ads contained statements that Sagee repairs brain cells, improves memory, concentration, attentiveness, and response times, slows down the brain’s aging process, and relieves aging-related conditions of the brain.
The complaint alleges that the defendants made unsubstantiated efficacy claims for Sagee and falsely claimed that clinical studies support their therapeutic claims for the product.
The proposed stipulated final judgment and order prohibits the defendants from making unsubstantiated efficacy claims for any dietary supplement, food, drug, device, or service. It also prohibits the defendants from misrepresenting through endorsements, the existence, contents, validity, results, conclusions, or interpretations of any test, study, or research.
