Following a six-day trial, a federal jury has determined that James Cole "operated schemes to defraud his customers in the operation of two separate but related businesses." One of the businesses, Maxam Neutraceutics, apparently sold dietary supplements in the form of spray bottles, marketed as effective treatments for "incurable medical conditions, including autism." The bottles were sold for $125, and Cole allegedly claimed they had been created and were marketed by a Harvard chemist. According to the U.S. Food and Drug Administration (FDA), the products were actually "made by a twice-convicted federal felon and self-taught chemist in the Boston area operating in unknown labs under unknown conditions." Cole also allegedly failed to disclose that the products contained rare bacteria and that he had never conducted clinical trials to support his product claims, despite advertising them as "clinically proven" to improve a host of diseases.
The government also showed that the customer service representatives working for Cole’s company had no medical training, but "were instructed to provide medical-sounding advice to customers who called the office." Cole’s other business involved the sale of machines, falsely claimed to be FDA-approved, that "were capable of treating over 100 medical conditions if the machine’s dials were turned to particular settings, including cancer and HIV." Because the matter was filed as a civil asset forfeiture case, the government is apparently entitled to retain more than $700,000 in assets seized from Cole’s home and businesses. Information about FDA enforcement action taken against another Cole company appears in Issue 13 of this Report. Tax fraud-related counts are also apparently pending against Cole. See FDA News Release, November 20, 2013.