Court Upholds Seasilver $120M Avalanche Fine

SAN FRANCISCO—The U.S. Court of Appeals for the Ninth Circuit upheld a prior district court ruling requiring the marketers of the Seasilver dietary supplement to pay almost $120 million for failing to comply with an earlier order to pay $3 million in consumer redress.

This latest decision requires the defendants—Jason and Bela Berkes, Seasilver USA Inc. and Americaloe Inc.—to pay almost $120 million under a 2004 agreement with FTC, which barred them from making false or misleading claims and included a $120 million judgment that would be suspended if they paid $3 million within a specified time. The defendants did not meet the required payment terms, and a June 2006 district court granted FTC's request to enforce the stipulated avalanche judgment. However, the defendants appealed this 2006 decision.

FTC initially focused on the defendants in 2002 for claiming Seasilver, a combination of Aloe vera, phyto-silver sea vegetables, herbs, cranberry concentrate and other ingredients, was clinically proven to treat or cure 650 diseases, including cancer and AIDS. It was also claimed to cause rapid, substantial and permanent weight loss without dieting. The agency alleged the claims were false and unsubstantiated.

In 2003, FTC joined with FDA in seizing $5.3 million in Seasilver inventory; this followed FDA's efforts in 2002 to halt fraudulent Seasilver claims and violations including improperly cleaned equipment and production employees working the line in street clothes.

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