DietFraud.com Plant Macerat - PhytoPharma scam exposed on CTV W-FIVE

On Sunday January 6th, 2002 the award winning documentary show W5 exposed the 2 year old diet scam, known as PhytoPharma. CTV has been overwhelmed with requests to run the show again. So, they repeated it twice on February 19th and 24th. Our sincere thanks to Wei Chen, producer Robert Osborne, associate producer Marnie Sugarman, and the rest of the W5 gang. You did a great service for many North Americans affected by this!

For those of you who missed it, and for our U.S. friends - here’s the story. As we have described on many occasions, PhytoPharma was a series of bogus weight loss promotions marketed by mail order out of Toronto mailboxes.

Rainbow Investigations, along with help from Dr. Terry Polevoy of www.dietfraud.com, began to take notice of the situation back in February 2000. The first ads were Apple Cider Vinegar capsules by Naturalab.

By March of 2001, it was to us that this operation was not only not being curtailed, it was growing rapidly. Many U.S. citizens were upset about it. Rainbow Investigations, along with help from Dr. Polevoy began to more aggressively put together the pieces of this operation.

By mid summer we made considerable progress, but were limited by our time and financial resources (we don’t get paid for this work!). W5 contacted us in August 2001, and offered to continue on with this investigation.

The promotions were run out of mailboxes which were rented by employees of a Toronto direct mail firm. Mail was couriered from the mailboxes to the direct marketer. The ads contained various 800’s leading to a Saint John New Brunswick call centre. The extensive ad campaign was run out of an ad agency in New Jersey.

The products were manufactured by a contract manufacturer in Florida, and sold to an athletic supplements distributor in Miami. Orders were shipped out of Toronto for Canadian orders, and Inwood, New York for U.S. orders. The were delivered by a well known international courier.

The money, and it must be in the millions, went to Ireland. PhytoPharma doesn’t exist anywhere in Canada as a registered company, and W5 found it registered in Panama.

Who’s behind all this? A small two man operation based in Montreal, called Infogest. Infogest had a maildrop pickup location in a prestigious Montreal office building, but the proprietors actually worked out of a small office in an older building in “Old Montreal”.

The proprietors are suspected to be Daniel Souss and Patrice Runner. Both were previously involved in United Research Center, a Montreal company convicted in 1997 by the U.S. Federal Trade Commission for a similar weight loss scam known as the Svelt Patch. See www.ftc.gov/us/1997/9706/urcic.

While Rainbow Investigations generally limits its role with these stories to reporting the news, on this one occasion, we feel obligated to a few of our own editorial comments.

As W5 accurately portrayed in the story, and both Dr. Polevoy and the undersigned have reported, Canada is clearly seen now as the “Land of Opportunity” with respect to diet scams. Between the three of us we are aware of at least a half a dozen similar advertised weight loss promotions out there - all claiming to be based in Ontario, all marketed out of mailboxes, all with hired answering services, many with webpages. Millions of dollars weekly, most of it in U.S. dollars, are coming into the hands of fraud artists right here in Canada.

The U.S. Federal Trade Commission considers Canada such a problem, that they are considering recommending a ban on ANY mail order product from Canada to the U.S.

Health Canada has a serious challenge on their hands. In September 2001 Rainbow Investigations wrote a letter to Minister Rock recommending the following changes to the HC field compliance body, known as the Inspectorate:

Health Canada must immediatly employ a team of professional investigators specifically hired to crack planned frauds. It is imperative these investigators be trained in the most up to date investigative techniques including and not limited to surveillance, investigative photography, intelligence gathering, paper trail searching, computer intelligence
The Inspectorate staffing levels must be brought to a level where employees can do the job. In Western Canada, where we have the most familiarity, there are only approximately 15 designated inspectors west of Toronto.
Health Canada must include in urgent investigative priorities, planned frauds. Traditionally, Health Canada has almost always prioritized its investigations almost solely on health risk. While of course, situations with a health risk are important, but when planned frauds are not investigated, it provides an incentive for new players to enter into the game. This is clearly happening now.
Health Canada should provide consumers with up to date investigative and enforcement news on its webpage such as is done in the U.S. with the Federal Trade Commission, the FDA, and First Government for consumers.

The situation in Canada now can only be described as a complete disgrace. Canadians deserve better. U.S. citizens are sick and tired of having our scams being thrown at them (we know - we’ve talked on e-mail with over 300 upset U.S. citizens).