An executive behind a green coffee weight loss product scam was hit with a $30 million judgment in a recent Federal Trade Commission action in Florida federal court.
In 2014, the agency filed suit against several defendants involved in the advertising of Pure Green Coffee, a product touted as causing substantial weight loss. The marketing overseen by Nicholas Scott Congleton included fake news websites and false testimonials, the FTC said, and lacked any scientific evidence to back up the claims.
Green coffee beans as a weight loss treatment gained popularity after a segment on "The Dr. Oz Show" and within weeks, the defendants (including Congleton) began selling their Pure Green Coffee extract at a price of about $50 for a one-month supply. The agency charged the defendants with making false and unsupported advertising claims that consumers who used the product could lose 20 pounds in 4 weeks and 16 percent body fat in 12 weeks, that studies proved Pure Green Coffee use could result in an average weight loss of 17 pounds in 12 weeks, and that websites linked to the defendants' sites were objective news sites containing comments that reflected the views of independent consumers.
Many of the defendants have already reached deals with the agency. In the most recent action, the federal court judge overseeing the case granted summary judgment in favor of the FTC and ruled that Congleton could be individually liable for the corporate defendants' false advertising. The court entered a $30 million judgment against Congleton and permanently banned him from deceptive advertising practices.
"Because Congleton conducted a deceptive advertising campaign for years, because Congleton knew of the advertisements' falsity, because Congleton failed to immediately discontinue the deceptive advertising after learning of the FTC's demand, because another violation could seriously harm a consumer, because Congleton appears proficient in Internet-advertising techniques, and because the barriers to entry in the dietary-supplement industry are low, the FTC proves a cognizable danger of a prospective violation," U.S. District Court Judge Steven D. Merryday wrote.
Dylan Loher, a separate relief defendant—who did not directly participate in the scheme but indirectly profited from it—was also ordered to turn over $549,000.
To read the complaint and the orders in FTC v. NPB Advertising, Inc., click here.
Why it matters: "As this case shows, the FTC is willing to go the distance to make sure that defendants like these are held accountable," Jessica Rich, Director of the FTC's Bureau of Consumer Protection, said in a statement. "We're pleased that the court has put an end to Congleton's deceptive scheme." The agency also noted that the action advances its goals as a member of the National Prevention Council, a group that "provides coordination and leadership at the federal level regarding prevention, wellness, and health promotion practices," as the FTC strives to protect consumers from misleading health advertising.