Founder of Male Enhancement Pill Gets His Sentence Enhanced
On August 25, 2008, Steven Warshak, founder of Berkeley Premium Nutraceuticals which produced Enzyte — “the once-daily tablet for natural male enhancement,” was sentenced to 25 years in federal prison. Warshak was also ordered to forfeit $500 million in restitution as part of the sentence. The judge also sentenced Warshak’s 75-year-old mother to two years in prison, but he agreed to let her remain free pending her appeal because of serious medical problems.
The sentences are the result of a federal investigation into Warshak’s activities that lasted at least four years and resulted in criminal charges against a dozen employees and associates. He was eventually convicted earlier this year on 93 counts of conspiracy, fraud and money laundering.
Nothing More than a Sham
Warshak acquired the majority of his wealth from the product Enzyte by gimmicky marketing on TV ads which featured a grinning character known as ‘Smiling Bob.’ Federal Prosecutors insist the catchy ads actually helped mask Warshak’s criminal enterprise which involved false advertising, fraudulent bank documents, hidden profits and unauthorized charges on customer credit cards.
At trial, prosecutors introduced evidence suggesting that Warshak produced fraudulent studies showing the effectiveness of Enzyte and e-mails he sent to employees urging them to keep charging customer credit cards through the “continuity program.” In fact, prosecutors insist, the key to the scheme was Berkeley’s continuity program, which automatically charged additional orders of Enzyte to credit cards each month. Furthermore, the continuity program was not fully disclosed in the TV ads, and customers who complained were given the run-around or referred to a quality control officer who did not exist. Prosecutors also asserted at trial that Warshak created a criminal environment that involved workers from the mail room to top executives within the company. “This scheme permeated the entire operation of this company,” said Assistant U.S. Attorney Anne Porter.
Not much for Smiling Bob to Smile about Anymore
United States District Judge Arthur Spiegel did not give much credence to the argument put forth by Warshak that he was unaware of any wrongdoing within the company. “This is a case about greed,” Judge Spiegel said. “Steven Warshak preyed on perceived sexual inadequacies of customers.” “He was the mastermind of the debacle,” Spiegel said. “But for his arrogance, he could have helped them all by taking responsibility. But he was blinded by his arrogance and greed.”
Judge Spiegel did, however, avoid ordering a complete shutdown of Berkeley Premium Nutraceuticals in hopes that the company could actually operate in a legal manner.