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1
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DECISION & ORDER
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EXTRACTED KEY WORDS
COMMISSION FEDERAL TRADE COMMISSION REPRESENTATION COMPLAINT ACT DRUG RESEARCH CORPORATION SALE FOOD DISORDERS RESPONDENT GERALD GERALD MCCARTHY OFFICER BUSINESS DIRECTS LABELING VIOLATION RELIABLE SCIENTIFIC EVIDENCE MANNER SUCCESSORS AFFECTING COMMERCE CONSUMERS AGREEMENT JURISDICTION EMPLOYMENT ADVERTISING PROMOTION DISTRIBUTION RESPONDENTS POSSESS |
9723234
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
COMMISSIONERS:
Robert Pitofsky, Chairman
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle
Thomas B. Leary
In the Matter of
J & R RESEARCH CORP., a corporation, and GERALD G. MCCARTHY,
individually and as an officer of the corporation.
DOCKET NO. C-3961
DECISION AND ORDER
The Federal Trade Commission having initiated an investigation of
certain acts and practices of the respondents named in the caption
hereof, and the respondents having been furnished thereafter with a
copy of a draft of complaint which the Western Region proposed to
present to the Commission for its consideration and which, if issued
by the Commission, would charge respondents with violation of the
Federal Trade Commission Act; and
The respondents and counsel for the Commission having thereafter
executed an agreement containing a consent order, an admission by the
respondents of all the jurisdictional facts set forth in the aforesaid
draft of complaint, a statement that the signing of said agreement is
for settlement purposes only and does not constitute an admission by
respondents that the law has been violated as alleged in such
complaint, or that the facts as alleged in such complaint, other than
jurisdictional facts, are true and waivers and other provisions as
required by the Commission's Rules; and
The Commission having thereafter considered the matter and having
determined that it had reason to believe that the respondents have
violated the said Act, and that complaint should issue stating its
charges in that respect, and having thereupon accepted the executed
consent agreement and placed such agreement on the public record for a
period of thirty (30) days, now in further conformity with the
procedure prescribed in § 2.34 of its Rules, the Commission hereby
issues its complaint, makes the following jurisdictional findings and
enters the following order:
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2
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COMPLAINT
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EXTRACTED KEY WORDS
RESEARCH CORPORATION RESPONDENTS PRACTICE MCCARTHY COMPOUND FEDERAL TRADE COMMISSION DOCTOR TRADE COMMISSION ACT ATTENTION DEFICIT DISORDER PATIENTS BLOOD HEALTH VITAMIN STROKES PROSTATE PROBLEMS UNITED STATES INFLAMMATION HEART PROBLEMS ATTENTION DEFICIT NUTRITION RHEUMATOID ARTHRITIS ANTI-OXIDANT BLOOD VESSELS HEART ATTACKS CIRCULATORY PROBLEMS PHYSICIANS REPRESENTATIONS SET FREE RADICALS MULTIPLE SCLEROSIS |
9723234
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
In the Matter of
J & R RESEARCH CORPORATION, a corporation, and GERALD G. MCCARTHY,
individually and as an officer of the corporation.
DOCKET NO: C-3961
COMPLAINT
The Federal Trade Commission, having reason to believe that J & R
Research Corporation, a corporation, and Gerald G. McCarthy,
individually and as an officer of the corporation ("respondents"),
have violated the provisions of the Federal Trade Commission Act, and
it appearing to the Commission that this proceeding is in the public
interest, alleges:
1. Respondent J & R Research Corporation is an Iowa corporation with
its principal office or place of business at 109 Main Street, Massena,
Iowa 50853.
2. Respondent Gerald G. McCarthy is an officer of J & R Research
Corporation. Individually or in concert with others, he formulates,
directs, or controls the policies, acts, or practices of J & R
Research Corporation, including the acts or practices alleged in this
complaint. His principal office or place of business is the same as
that of J & R Research Corporation.
3. Respondents have been general partners in a distributorship that
has promoted the products of Kaire International, Inc., a multilevel
marketing company. Kaire International's marketing plan allows
distributors to earn commissions by recruiting other consumers both to
purchase Kaire's products and to become distributors. The amount of
commission earned by a distributor is based on the total dollar amount
of the products purchased by those consumers and others whom they, in
turn, recruit to be distributors.
4. Respondents have profited from the sale of various Kaire
International nutritional supplement products containing pycnogenol, a
substance derived from the bark of the maritime pine tree. These
products have been sold under the names UltraPrime, Maritime Prime,
Super Maritime Prime and Maritime Plus ("pycnogenol products").
Respondents' pycnogenol products are "foods" and/or "drugs," within
the meaning of sections 12 and 15 of the Federal Trade Commission Act.
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3
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ANALYSIS
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EXTRACTED KEY WORDS
PROPOSED ORDER DISORDERS PYCNOGENOL ADVERTISEMENTS COMMISSION DISEASE PROPOSED CONSENT AGREEMENT MATERIALS SUBSTANTIATE COMPLAINT ALLEGES ATTENTION DEFICIT REPRESENTATION TESTIMONIALS DRUG POSSESS COMPETENT RELIABLE SCIENTIFIC EVIDENCE KAIRE CURE CIRCULATORY PROBLEMS STROKES RHEUMATOID DIABETES HEART SCLEROSIS BLOOD TUMORS CANCER |
ANALYSIS OF PROPOSED CONSENT
ORDER TO AID PUBLIC COMMENT
The Federal Trade Commission has accepted an agreement, subject to
final approval, to a proposed consent order from J & R Research, Inc.,
and its principal, Gerald G. McCarthy ("respondents"). Respondents
were general partners in a distributorship of Kaire International,
Inc., a multi-level marketing company. Respondents also created and
marketed to Kaire distributors audio tapes and other promotional
materials touting a Kaire product containing pycnogenol, a substance
derived from the bark of the maritime pine tree.
The proposed consent order has been placed on the public record for
sixty (60) days for the reception of comments by interested persons.
Comments received during this period will become part of the public
record. After sixty (60) days, the Commission will again review the
agreement and any comments received and will decide whether it should
withdraw from the agreement and take other appropriate action or make
final the agreement's proposed order.
Respondents' advertisements claimed that pycnogenol could mitigate or
cure the effects of numerous diseases or disorders. The proposed
complaint alleges that respondents could not substantiate claims that
pycnogenol: (1) alleviates rheumatoid arthritis, osteoarthritis and
rheumatism; (2) reduces the amount of insulin needed to treat
diabetes; (3) treats and/or improves health disorders associated with
diabetes, including neuropathy, retinopathy, osteomyelitis,
circulatory problems and heart problems; (4) helps treat lupus,
Parkinson's Disease, multiple sclerosis and fibromyalgia; (5) treats
or improves digestive disorders, including Crohnes Disease and
irritable bowel syndrome; (6) helps prevent strokes and the
reoccurrence of strokes; (7) dramatically improve physical
disabilities caused by stroke; (8) dramatically helps prevent heart
disease, including arterial sclerosis; (9) reduces blood pressure;
(10) dramatically improves and helps prevent circulatory problems,
including phlebitis, thrombophlebitis, blood clots, and varicose
veins; (11) dramatically promotes the shrinkage of tumors and helps
prevent tumor formation; (12) treats cancer and/or prolongs the life
of cancer victims; (13) reduces or eliminates inflammation of the
prostate; (14) eliminates or reduces the incidence of asthma attacks
and symptoms caused by allergies; (15) improves eyesight and treats
disorders of the retina; (16) helps rebuild joints and soft tissue;
(17) greatly accelerates the healing time of injuries; (18) improves
or cures skin conditions such as psoriasis and acne; (19) treats
Attention Deficit Disorder and Attention Deficit Hyperactive Disorder;
(20) reduces or eliminates the need for medication in individuals with
Attention Deficit Disorder and Attention Deficit Hyperactive Disorder;
and (21) is twenty times more protective as an antioxidant than
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4
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AGREEMENT CONTAINING CONSENT
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EXTRACTED KEY WORDS
FEDERAL TRADE COMMISSION COMPLAINT REPRESENTATION PROPOSED RESPONDENTS RESEARCH CORPORATION GERALD MCCARTHY OFFICER AGREEMENT DRUG SALE FOOD ACT MANNER DISORDERS DRAFT COMPLAINT BUSINESS DIRECTS ACCEPTANCE LABELING RELIABLE SCIENTIFIC EVIDENCE SUCCESSORS AFFECTING COMMERCE CONSUMERS EMPLOYMENT ADVERTISING PROMOTION DISTRIBUTION RESPONDENTS POSSESS |
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
In the Matter of
J & R RESEARCH CORP., a corporation, and
GERALD G. MCCARTHY, individually and as an officer of the corporation.
FILE NO. 972-3234
AGREEMENT CONTAINING CONSENT ORDER
The Federal Trade Commission has conducted an investigation of certain
acts and practices of J & R Research Corporation, a corporation, and
Gerald G. McCarthy, individually and as an officer of the corporation
("proposed respondents").
Proposed respondents are willing to enter into an agreement containing
a consent order resolving the allegations contained in the attached
draft complaint. Therefore,
IT IS HEREBY AGREED by and between J & R Research Corporation, by its
duly authorized officers, and Gerald G. McCarthy, individually and as
an officer of the corporation, and counsel for the Federal Trade
Commission that:
1.a. Proposed respondent J & R Research Corporation is an Iowa
corporation with its principal office or place of business at
109 Main Street, Massena, Iowa 50853.
1.b. Proposed respondent Gerald G. McCarthy is an officer of
the corporate respondent. Individually or in concert with
others, he formulates, directs, or controls the policies, acts,
or practices of the corporation. His principal office or place
of business is the same as that of J & R Research Corporation.
2. Proposed respondents admit all the jurisdictional facts set
forth in the draft complaint.
3. Proposed respondents waive:
a. Any further procedural steps;
b. The requirement that the Commission's decision contain
a statement of findings of fact and conclusions of law;
and
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