R. Alexander Acosta, United States Attorney for the Southern District of Florida; David Bourne, Special Agent in Charge, Food and Drug Administration, Office of Criminal Investigation; Michael E.Yasofsky, Special Agent in Charge, Internal Revenue Service Criminal Investigation; and Enrique Gutierrez, Postal Inspector in Charge, United States Postal Inspection Service announce today that on September 17, 2007, the arraignment and pre-trial detention of defendant Frank Sarcona, a/k/a Frank Sarcone, a/k/a Dave Johnson took place.
Defendant Sarcona was indicted by a federal grand jury sitting in West Palm Beach through a superseding indictment charging him with 55 separate counts, that included 10 counts of introduction of a misbranded food, 12 counts of money laundering, 25 counts of mail fraud, 3 counts of wire fraud, 3 counts of criminal contempt of court, 1 count of conspiracy to commit mail fraud, wire fraud and criminal contempt and 1 count of conspiracy to commit money laundering.
The superseding indictment alleges that beginning in January 2000 and continuing to October 2004, defendant Sarcona conspired with George Forgione and others to defraud tens of thousands of consumers of millions of dollars through the sale of a misbranded dietary supplement marketed under the name Lipoban.
Lipoban is a chitosan product, derived from ground crustacean shells, which the defendants advertised as allowing “people to lose their excess weight and inches without torturous dieting or exercising.” They claimed the customer could experience the loss of “15, 25, 35 … even 50 or more unwanted pounds gone without dieting as you eat the foods you love!” The defendants sold Lipoban through direct mail, the internet and national newspaper advertisements.
As part of their sales strategy, they created the false impression that they were a healthcare clinic engaged in clinical studies and the treatment of obesity. To support this false impression, they placed a medical insignia on their mailings and forms; represented that Dr. Joseph Maya was the medical director; gave customers a business card listing Dr. Maya with a Boca Raton address; stated that they were engaged in a test study; stated that they had a team of researchers as well as weight loss and nutrition professionals. They assigned each customer what appeared to be a unique number, “test participant number 731-…”
In reality, their clinic was at various times a mail drop box, the residence of a defendant and an office in an industrial park. Dr. Jose (not Joseph) Maya is not licensed to practice medicine in the United States, but in Mexico. There were no test studies; no researchers and the “nutrition professionals” were really telephone customer service operators. Virtually all customers were “test participant number 731-…” and the numbers following “731″ were codes which enabled the defendants to track the mailing list or advertisement which generated the response.
The defendants falsely claimed that two doctors endorsed their product yet failed to state that those doctors, who merely recommended generic chitosan, recommended usage in conjunction with diet and exercise.
Following Sarcona’s arraignment, United States Magistrate Judge James Hopkins conducted a detention hearing. At the hearing, the United States placed into evidence a 1999 final order of the United States District Court stating that Sarcona had been involved in 13 prior proceedings relating to fraudulent marketing. The United States introduced evidence of Sarcona’s use of various aliases; as well as the use of signature stamps to utilize bank accounts opened in associates’ names.
The United States also introduced numerous documents filed by Sarcona, in Broward County, Florida in which Sarcona claimed that he is a sovereign citizen of the Republic of Florida and does not recognize the laws or authority of the United States.
Magistrate Judge Hopkins ordered defendant Sarcona to be detained until trial, finding that Sarcona is an economic danger to the community, a serious risk to obstruct justice, as well as a flight risk.
Mr. Acosta commended the investigative efforts of the Food and Drug Administration, the Internal Revenue Service Criminal Investigation, and the United States Postal Inspection Service. The case is being prosecuted by Assistant United States Attorney Kerry S. Baron and Special Assistant United States 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 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 www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.List your legal jobs on the LawFuel Network