Marketers Pay Full $1.9 Million After Hidden Assets Are Discovered

An operation that hid assets from the Federal Trade Commission when settling false advertising charges will pay $1.9 million to be used for refunds. Last year, the defendants agreed to pay $375,000 to settle FTC charges. The $1.6 million balance of the judgment was suspended based on sworn financial disclosure documents showing inability to pay. Shortly after that settlement, the FTC discovered that defendants kept at least $1.8 million in an undisclosed PayPal account. The FTC immediately obtained a temporary restraining order to freeze the funds, which was granted on December 8, 2006. The defendants have been ordered to pay the entire $1.9 million.

On November 22, 2006, the FTC charged the defendants, Sunny Health Nutrition Technology & Products, Inc., and Sunny Sia, with making false and unsubstantiated claims for three dietary supplements, including HeightMax, advertised to make kids and young adults taller. On November 30, 2006 the Honorable Susan C. Bucklew, Federal District Court Judge, signed a Stipulated Judgment requiring defendants to pay $375,000 based on the accuracy of sworn financial statements. The Judgment included an avalanche clause, requiring payment of full redress for $1.9 million if the financial statements were not accurate. Read more at ftc.gov.