"Smiling Bob" Verdict: Guilty
CINCINNATI -- A federal court jury on Friday found the owner of a company that sells "male enhancement" tablets and other herbal supplements guilty of conspiracy to commit mail fraud, bank fraud and money laundering.
Steve Warshak is founder and president of Berkeley Premium Nutraceuticals, which distributes Enzyte and a number of products alleged to boost energy, manage weight, reduce memory loss and aid restful sleep.
Television ads for Enzyte feature "Smiling Bob," a goofy, grinning man whose life gets much better after he uses the product.
Warshak, 40, could face more than 20 years in prison and his company could have to forfeit tens of millions of dollars.
Messages seeking comment from Warshak's Boston attorney Martin Weinberg and Assistant U.S. Attorney Anne Porter were left at their offices Friday night.
Prosecutors claimed customers were bilked out of $100 million through a series of deceptive ads, manipulated credit card transactions and the company's refusal to accept returns or cancel orders. They said unauthorized credit card charges generated thousands of complaints over unordered products.
Warshak's mother, Harriett Warshak, also was convicted of conspiracy, bank fraud and money laundering. Two other company employees were convicted on related charges.
Harriet Warshak said she would appeal.
"We don't believe it was a fair verdict," she said.
Several friends and relatives of the defendants wept as the verdicts were read.
"It's a sad day," said Bruce Whitman, an attorney who represented an employee who was acquitted. "I find it hard to believe the other defendants were convicted."
He said the accusations should have been made in a civil court, not a criminal court.
The government also alleged the defendants obstructed investigations by two federal agencies.
Some former employees, including relatives of Warshak, pleaded guilty to other charges and cooperated with prosecutors. They testified that the company created fictitious doctors to endorse the pills, fabricated a customer-satisfaction survey and made up numbers to back claims about Enzyte's effectiveness.
Defense lawyers characterized that testimony as tainted because it was forced by the threat of prosecution.
The defense contended in the trial that Berkeley suffered from customer service that didn't keep pace with the company's rapid growth from a one-person startup in 2001 to 1,500 employees in 2004.
Weinberg also had told jurors that Berkeley had been targeted by the government in "a relentless criminal investigation."