Markets Wired

An Administrative Law Judge has dismissed a Federal Trade Commission administrative complaint alleging that the respondents were responsible for the deceptive advertising of an herbal remedy that was falsely advertised as a cure for cancer.

Although Chief Administrative Law Judge D. Michael Chappell did not evaluate the allegation in the complaint that deceptive and false claims were made about the herbal remedy RAAX11, he wrote that complaint counsel had failed to prove those claims were made by the respondents named in the complaint – the company Gemtronics, Inc., or its officer, William H. Isely. Specifically, Judge Chappell found that complaint counsel had failed to prove that Gemtronics or Isely had a role in creating or circulating the Internet advertisements for RAAX11that were alleged to be deceptive.

“Complaint Counsel failed to meet its burden of proof in support of the violations alleged in the Complaint,” Judge Chappell wrote in his decision.

In September 2008, the FTC charged Gemtronics and Isely with making deceptive and false claims that RAAX11 effectively prevents and cures cancer, and that it is scientifically proven to work. The set of claims was one of 11 challenged in “Operation False Cures,” a law enforcement sweep aimed at peddlers of phony cancer remedies. RAAX11 was promoted as a mixture of chrysobalanus icaco, a derivative from a tropical bush, and agaricus, a medicinal mushroom. Gemtronics and Isely also received a letter from the U.S. Food and Drug Administration last year warning that RAAX11 was being marketed in violation of federal law.

The Initial Decision was filed on September 16 and announced today. Complaint counsel has 30 days to appeal the decision to the full Commission.

The judge’s initial decision in this matter is subject to review by the Commission on
its own motion or at the request of any party. The initial decision will become the final decision of the Commission 30 days after it is served on the parties, unless either a party files a timely notice of appeal, or the Commission places the case on its own docket for review.

Copies of the public version of the initial decision by the administrative law judge are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580; 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261.

(FTC File No. 082 3080; Docket No. 9330)
(Gemtronics.wpd)