March 1, 2010: Boca Raton Man Sentenced for Nutritional Supplement Scam
Food and Drug Administration
Office of Criminal Investigations
U.S. Department of Justice Press Release
For Immediate Release
March 1, 2010
United States Attorney
Southern District of Florida
Contact: Alicia Valle
Special Counsel to the U.S. Attorney
Jeffrey H. Sloman, United States Attorney for the Southern District of Florida, David W. Bourne, Special Agent in Charge, Food and Drug Administration, Office of Criminal Investigations, Daniel W. Auer, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, and Henry Gutierrez, Postal Inspector in Charge, U.S. Postal Inspection Service, announced the February 26, 2010 sentencing of defendant Frank Sarcona, a/k/a Frank Sarcone, a/k/a Dave Johnson, 58, of Boca Raton, FL. U.S. District Court Judge Kenneth A. Marra sentenced Sarcona to a term of 20 years’ imprisonment for conspiracy to commit mail and wire fraud, and criminal contempt of court; conspiracy to commit money laundering; and multiple counts of substantive mail fraud, wire fraud, money laundering, misbranding of a food, and criminal contempt of court.
Defendant Sarcona defrauded more than 130,000 customers out of more than $7 million by marketing a purported weigh loss product, called Lipoban, by misrepresenting that the product was sold in conjunction with a medical facility and clinical test.
According to court documents and statements made in court, Sarcona marketed Lipoban through newspapers, national magazines, the internet and direct mail solicitation. To sell Lipoban, Sarcona caused the mailing of millions of letters to consumers across the U.S., inviting customers to participate in what he termed “a restricted nationwide test” of a new product that would promote large weight loss without diet and exercise. The advertisements created the false impression that a study was being conducted in conjunction with a healthcare clinic, the Lipoban Clinic, and that those who purchased the product would participate in that study. Virtually every customer was told that he/she was test participant #731. Included in the mailings was a letter from Dr. Joseph Maya, the purported medical director of the Lipoban Clinic. The printed material falsely contained the statement that the “clinic” had a team of weight loss and nutrition professionals. In addition, a newsprint insert included in the mailing falsely claimed that a New York cardiologist endorsed Lipoban.
In fact, however, according to evidence introduced at trial, the “clinic” was located at the residence of a co-defendant and later at an office in an industrial park. Dr. Jose (not Joseph, as stated in the material) Maya Behar was not licensed to practice medicine in the U.S., but only in Mexico. Dr. Maya never came to the “clinic” or performed any services for the clinic. The “clinic” was not conducting any study nor were there weight loss and nutrition professionals on site. Further, the referenced cardiologist never endorsed Lipoban and stated that diet and exercise was essential in any weight loss program.
Defendant Sarcona funneled the monies he received from the scam into the bank account of a defunct corporation he maintained solely for personal use. Thereafter, large sums of money were withdrawn as cash or transferred into other accounts in the name of a nominee. Sarcona was given a signature stamp so that he could write checks on those accounts, and used some checks to purchase valuable real estate in the U.S. Virgin Islands.
In 1999, U.S. District Court Judge Ferguson issued a final injunction (FTC v. SlimAmerica, Frank Sarcona et. al.,) prohibiting Sarcona from engaging in deceptive sales and marketing practices because of his sale of another weight loss product. Almost immediately after the injunction was issued, Sarcona started the marketing and sale of Lipoban, using the name Dave Johnson to hide his identity.
Victims of the fraud are asked to contact the following website within the next 30 days regarding requests for restitution: http://www.usdoj.gov/usao/fls/VictimWitness/LipoBanClinic.html.
Mr. Sloman commended the efforts of the Food and Drug Administration, Office of Criminal Investigation, the IRS’s Criminal Investigation Division, and the U.S. Postal Inspection Service. The case was prosecuted by Assistant U.S. Attorney Kerry S. Baron and Special Assistant U.S. Attorney Jason Hadges.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.