HARTFORD, Conn. (AP) — Connecticut Attorney General George Jepsen and the Federal Trade Commission have obtained a $32.7 million settlement against three dietary supplement companies and their owner for alleged deceptive marketing practices across the country.
Jepsen announced the settlement Tuesday with the companies: LeanSpa LLC, NutraSlim LLC and NutraSlim U.K. Ltd., all based in Branford, Conn. The settlement also involves the companies’ owner, Boris Mizhen of Guilford, Conn., and his wife, Angelina Strano.
Mizhen’s lawyer, William I. Rothbard, said Mizhen has not admitted any wrongdoing, but decided to settle the case to avoid expensive litigation. Rothbard said Strano wasn’t involved in the businesses.
Connecticut and the FTC sued the companies and Mizhen in 2011, alleging the companies engaged in several deceptive practices including marketing their supplements with fake news websites and testimonials. The companies also offered free trials if consumers paid for shipping and handling, but then charged the consumers’ credit cards for the trials, Jepsen said.
The settlement awaits federal court approval.
“My office reviewed approximately 1,278 consumer complaints, not just from Connecticut but around the country, and the unfair and deceptive conduct alleged in those complaints was simply unacceptable,” Jepsen said.
Jepsen said it’s likely Mizhen and Strano won’t be able to pay the entire settlement amount, so a court-appointed receiver will sell certain properties they own. Those sales are expected to bring in up $7 million, Jepsen said. Settlement money will be placed in an FTC fund to relieve consumers harmed by the alleged deception.
Rothbard said LeanSpa was an excellent company with respected scientific advisers and a clinically tested weight-loss product, and should never have been named in the lawsuit. He said the company didn’t mislead consumers and was a victim of fraudulent conduct by unnamed marketing partners.
“Could they have had their day in court, they are confident they and their actions would have been wholly vindicated,” Rothbard said.