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August 27, 2008

The man behind "smiling bob" not likely smiling after federal sentencing

Smilig_bob As detailed in this local article, the man who helped give us the character "smiling bob" had a downer federal sentencing today.  Here are the details:

A federal judge today sentenced the founder of Berkeley Premium Nutraceuticals to 25 years in prison and ordered that he and the company pay back more than $500 million. Berkeley distributes various products alleged to boost energy, manage weight, reduce memory loss and aid sleep.  The company's main product, Enzyte, which promises sexual enhancement, has ads featuring "Smiling Bob," a happy man with an exaggerated smile.

A federal jury convicted the company, founder Steve Warshak and several others of participating in a massive scheme that included fraud, money laundering and bogus claims about the effectiveness of Berkeley’s products. U.S. District Judge S. Arthur Spiegel ordered Warshak, 42, to begin serving his sentence within 30 days.

Spiegel said it was impossible to calculate exactly how much money was lost by customers, so he accepted a figure based on how much Warshak and the company took in. "This is a case about greed," Spiegel said as he reviewed the case. "Steven Warshak preyed on perceived sexual inadequacies of customers."  Spiegel said one aspect of the fraud relied on the reluctance of customers to come forward, which would mean admitting they ordered the sexual enhancement pills. "I don't see any evidence of remorse or concern for anyone but himself," Spiegel said.

Among interesting aspects of this case was the district court's decisions on bail pending appeal:

Spiegel denied Warshak's request to remain free on bond pending appeal, but gave him 30 days to wrap up personal business and report to prison.

Warshak's mother, Harriet Warshak, was sentenced to two years in prison. She was convicted of conspiracy and other charges. Spiegel allowed her to remain free pending appeal and acknowledged that she is 75, has cancer and likely will never be incarcerated because of the time it takes appeals to work through the courts.

August 27, 2008 at 02:55 PM | Permalink

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Comments

I am really not understanding this? Are they saying the product does not work? What is the USAO saying? There was re curring charges on a credit card? That is exactly what Pro Active does for there Acne products and their sales are close to 500Million basically for a Sal Acid Acne product nothing at all out of this world just a basic Acne product.

Is the DOJ saying his products did not work?

Posted by: | Aug 27, 2008 5:20:09 PM

It was a case of people not being told they were gonna be charged. He couldn't prove if they were told that or not because it wasn't until after he got into trouble that he started recording the calls.

I work there.. I make more money than I've ever made. I fear for the people like me who have families who depend on them. I'm just an innocent employee. I know people hate Steve Warshak.. I've never met him but this company takes care of my family.

Posted by: RANDOM PERSON | Aug 27, 2008 6:11:40 PM

The trial and sentencing wasn't about the ineffectiveness of the product, but the recurring credit card charges that took place even after the customer with the small penis called and canceled.

Spiegel said it was impossible to calculate exactly how much money was lost by customers, so he accepted a figure based on how much Warshak and the company took in. So let's just make up a number Judge, right?

This was a local Cincinnati case that got alot of attention. Judge Spiegel has absolutely no business on the bench anymore. He has to be close to 85 years old by now and in my opinion (don't need a defamation suit thankyouverymuch) is completely senile, not to mention nasty and bitter. Again, in my opinion, because of his extreme age and loss of mental faculties, he has no idea what goes on in his courtroom and the federal prosecutors run everything there. They're very helpful to the old man, and I believe he has to appreciate that.

But that being said, 25 years for a cash crime? His priorities are as screwed up as his courtroom.

Posted by: babalu2u | Aug 27, 2008 6:27:16 PM

Many Many companies use the recurring charge. Look at Pro Active they do it. I went on the web site today and the company is still selling products.

I still don't understand the fraud? They sold a consumer product.

Can I now take pro active to court because there is a recurring charge.

Posted by: | Aug 27, 2008 8:36:25 PM

Because he didnt say this he gets 25 years?

Proactiv Solution Deluxe 5-piece system plus bonuses. By ordering now, you will receive a two month supply of our 5-piece club package every 60 days, and your credit card will be billed $59.95 plus $7.95 shipping and handling for each shipment.

Look at the fraud here 7.95 for shipping a small Acne package to you in 5 to 7 days

Posted by: | Aug 27, 2008 8:39:57 PM

Doug,

None of the press reports indicate what court this was in. Was it the SD Ohio? Was there a written memorandum, or was it just announced in open court?

Posted by: Def. Atty. | Aug 28, 2008 11:01:10 AM

hi

i like your site

curt smith

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Posted by: curtsmith | Aug 28, 2008 1:32:39 PM

Total scumbag for sure. But 25 years is crazy. This is a non-violent crime. Did anyone lose more than $100? Is there a single life ruined?

Posted by: DAG | Aug 28, 2008 7:56:19 PM

You can read the indictment, it was posted in a prior post on this blog a while back. The indictment clearly sets forth all the reasons why this guy should spend every day of the next 25 years locked up in a federal prison.

Fraudulent advertising and deceptive commercial speech are the most offensive crimes imaginable... far worse than rape, murder, etc. Reading this guy's indictment makes me far angrier than reading an indictment that says the defendant pulled a gun on someone, shot, and committed murder. At the same time, I have absolutely no sympathy for anyone who was stupid enough to order "male enhancement" pills.

What's the harm of the crime? Putting those TV commercials on the air. A patently annoying, ludicrous commercial for a blatantly fraudulent product that is only somewhat clearly sold up on a recurring-charge, recurring order basis.

Free credit report dot com commercials are also guilty of this, and I hope the scam artist behind that website and those commercials gets locked up for 25 years, too.

Posted by: bruce | Aug 30, 2008 11:37:22 PM

"Fraudulent advertising and deceptive commercial speech are the most offensive crimes imaginable... far worse than rape, murder, etc"?

Good lord, what sort of bizarre hell-world do you live in?

Scamming sad little inadequate losers out of a few bucks for wiener-pills is worse than MURDER? Worse than RAPE?

I can only hope that someone does a little rape and murder on someone you care about.

Maybe you'll develop some sense of what's important in the world then.

But I doubt it, you'll no doubt remain a nasty little bit of self-righteous dogshit...

Posted by: Earnan Maguire | Jun 9, 2009 10:53:46 AM

And yet I just saw one of these crap ads on TV today at Noon 06/14.

Posted by: SmirkingBob | Jun 14, 2009 1:05:56 PM

This is a very fascinating site and I really would like to applaud the owner or owners of this blog for publishing it. I have found your information extremely useful in helping me with a grad school sociology project.

I wanted to express a concern though. The comments on this story start off rather matter of fact with some good insights into the legal system. However, as I scrolled down, I noticed that some of these comments became much more emotional and even what may be considered to be mean spirited. The comment about this being a crime that supersedes rape and murder caught me off guard. Those are crimes that physically assault another human being while this topic is about a man who committed a monetary crime. I am not sure how the commenter can compare the two and make that statement? I would be interested in the commentators viewpoint as to why. Was the commenter personally a victim of a monetary crime?

Thank you.

Posted by: Noah D. Creamer | Sep 2, 2009 9:18:40 AM

College Student
Worse than rape or murder????? Whoever said that needs to stand back and check their morals.In my opinion that type of thinking throws up a huge red flag. Reocurring shipmnents happen everyday because it is not legal if the customer is told. Unfortunately too many people don't listen to what they are being told when they buy on the phone or even online. The product is still being sold using the same commercials. So obviously there is nothing wrong with the commercials or product or it would have been banned. As far as taking advantage of a customer with issues, how is that any different than the BIG name pharmaceutical companies that sell products for erectile disfunction

Posted by: Susan | Sep 9, 2010 5:29:21 PM

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