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Tracking a diet scam
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CTV News Staff
Date: Fri. Feb. 22 2002 2:41 PM ET
We love to eat. And we love to eat unhealthy foods even more.
As a result, all those sweets and fried foods can often add up to some unwanted weight. In fact the latest surveys indicate that 50 per cent of all Canadians are overweight.
But as fast as people put on pounds, they want to take them off. And they're not always willing to do the work.
The Holy Grail of weight loss would be a product that involved no diet and no exercise. You could just take it and watch the pounds melt away.
Rebecca Law from Salt Lake City, Utah thought she had found the Holy Grail after she saw an ad in an airline magazine.
"So I figured it was in this magazine on the airplane and now it's in the Salt Lake Tribune. I mean it can't be all that bad. And then it said it had a money back guarantee. So I figured I might as well try it."
Law wanted to lose weight so she could have another child. She had hurt her back the year before and gained about 30 pounds. Rebecca's doctor told her that unless she lost some weight, the pregnancy would cause too much stress to her back.
So Law decided to call the 1-800 number and give the product a try. It was called Plant Macerat, featuring Chantel Legrand's testimonial. Allegedly, she was just an average person who lost 54 pounds in six weeks using this product.
As soon as the Plant Macerat arrived, Law started the program.
"It just really started making me sick. I got really nauseous and then I got diarrhea and a lot of just I don't know," said Law.
Rebecca began to get stomach cramps, started having problems with her menstrual cycle and actually gained weight.
Unhappy about how she looked Rebecca started to get depressed. She ended up on anti-depressant drugs and then she started to get angry. She went online and started to search for answers. What she found were numerous people talking about their own terrible experiences with the product.
She also found a private investigator in Calgary, Alberta who was trying to do something about Plant Macerat.
Ron Reinhold, formerly a drug inspector for Health Canada, had seen these kinds of diet claims before. So when ads for Plant Macerat began to turn up in the Calgary newspapers, he was suspicious.
Reinhold tried to figure out how the scheme was operating and who was behind it. He found a company name, Phytopharma.
He then found a tangle of companies that didn't exist, addresses that were merely post office boxes, and third parties with no idea who they were working for. Reinhold believed this was a well-planned fraud in action. The only thing he knew for sure was that Phytopharma was just one of dozens of similar operations.
No one knows more about all those operations than Dr. Terry Polovoy. He's a physician with a particular interest in diet frauds.
"Canada happens to be the world's headquarters for some of the largest marketers of fraudulent health products."
Polovoy operates a web page called www.dietfraud.com. He says if you think that this kind of fraud is a nickel and dime operation, think again.
"We're not talking about a few hundred thousand dollars worth of sales a month. We're talking about tens of millions of dollars a week probably going out in some of these companies mailboxes."
He also says the people who run these schemes work internationally. Polovoy had also been tracking Plant Macerat, with little success.
So W-FIVE took up the challenge and one of our associate producers orders some Plant Macerat. After telling them that she's 30 pounds overweight, they make their claim.
"Some people experience weight loss in the first 72 hours," said Cory, the sales operator.
The producer ups the ante to see how far they'll go.
"So eating healthy is not really a big deal... I really like junk food... So I can continue to eat that as long as I stay on the product?" said W-FIVE's associate producer.
"Yeah, it's not mandatory whatsoever, sometimes it's recommended, but it's not mandatory..." he said.
"So I can continue to eat junk?"
Yeah it shouldn't be a problem," said the sales operator.
Another promise. So she ups the ante once again.
"Now, I really don't like exercise at all, do I have to exercise while doing this?"
"No. I mean afterwards if a person reaches their desired weight, some people decide they want to eat healthier and exercise. Other people just want to re-order the productâ|" said the sales operator.
So there's the guarantee. If you take Plant Macerat, you can eat junk food and not exercise and still lose up to 54 pounds in six weeks.
Within a few weeks the product arrives, bottles of some kind of liquid. It's supposed to be a blend of 16 different herbs including dandelion roots, black radish, and cherry stems.
This herbal blend is supposed to accomplish almost miracle-like changes to a person's body.
W-FIVE decides have it checked out by Dr. Ron Aronson, an endocrinologist. He runs a clinic that helps people with obesity and is a member of the North American Association for the Study of Obesity.
"There is no scientific proof that this would help you lose weight based on the ingredients in the compound."
Aronson says Plant Macerat, at best works as a diuretic and laxative.
We run Aronson's study by another diet expert. He agrees. Plant Macerat cannot possibly do what it's claiming. Now the next question. Who's making these claims?
The only address that Phytopharma lists is its so-called corporate headquarters on Morningside Drive in Toronto. But at that address, there's only a post office box.
Eventually this man in a red van shows up and picks up three bags of mail, with thousands of letters, likely holding around $100 each to order the product. If he's doing that every day, that's an operation worth millions. After winding his way through the streets, he pulls into a company called Globel Direct. They process Phytopharmaâs mail.
Globel Direct is a legitimate company used by whoever's behind Phytopharma. But there's another lead, the 1-800 number to order the Plant Macerat. All orders and complaints are directed to who's at the end of that phone line.
The number is located in St. John, New Brunswick, the 'call centre' capitol of Canada, at a company called Corporatel. They refuse an interview, but eventually someone comes out of the building.
"All we know is that people are calling us up and asking to place orders, which we take the orders in the form with the information," said Andrew O'Brien.
But they're not just passively taking orders. They're making false claims about this diet product and the Competition Act states: "No person who engages in telemarketing shall make a representation that is false or misleading..."
Corporatel owes the public an explanation. It's been given an $812,000 interest-free loan from the New Brunswick government. But the company is ultimately just another hired gun. But thanks to them, there's now a better idea of who's doing the hiring.
In the end, all roads lead to Montreal to a company called Infogest. They seem connected to every facet of the operation, from advertising to sales to manufacturing.
A man named Daniel Sousse acknowledges they are the North American representatives of Phytopharma. Their phone number traces back to a prestigious address in downtown Montreal, One Place Ville Marie.
Security says that two people pick up the mail there only, Daniel Sousse and Patrice Runner, and that there's another office somewhere in Montreal.
The offices are in a building in old Montreal, the headquarters of Infogest. Daniel Sousse refuses to answer any questions. He also won't talk about his past.
Sousse was involved with various companies a few years ago that were fined half a million dollars in Canada and about half a million dollars in the United States for selling a number of bogus diet products, including one called the Svelt Patch, similar to a nicotine patch.
Sousse's boss at that time was a man called Patrice Runner. He picks up the mail at the Infogest post office box and his name appears on the contract for the rental.
So who is behind Plant Macerat and Phytopharma? Well, for a simple diet product, it's a complex trail.
The product is made in Florida. A company in New Jersey handles the advertising. The orders are processed in New Brunswick and shipped out of Toronto and New York. The money ends up in a bank in Ireland.
And does a company called Phytopharma actually exist? It's a company registered in Panama. Finally, all of this activity revolves around Infogest in Montreal and Daniel Sousse and Patrice Runner.
It's a complex scheme with international implications, not the least of which is that most of the victims are in the United States. This fact has the American authorities fuming.
In Washington, D.C. the activities of Phytopharma have even come to the attention of the Federal Trade Commission.
Richard Cleland at the FCC investigates diet fraud and says Canada has become such a problem that he's considering recommending a boycott of Canadian mail order products, even though it will punish a lot of legitimate businesses.
"You know it's not a message that we want to deliver to consumers and it's very unfortunate and I think, I hope that long term, you know, various countries come up with ways to deal with that issue."
Cleland says unless Canada cleans up its act with mail orders, the U.S. may have no choice.
And that means no more cases like Rebecca Law. She's managed to rebuild her shattered self-esteem and is back to doing what she loves best, singing opera.
The New Brunswick telemarketer, Corporatel, ended its contract with Infogest and no longer handles their calls, following W-FIVEâs investigation. But Plant Macerat is still being sold by a new Pennsylvania-based telemarketer.
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This is just wrong but if I were to send something to the politicians I would have sent the brain!
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