State raids offices of diet pill telemarketers; 37 arrested

Friday, Feb. 11, 2000 | 10:06 a.m.

CARSON CITY -- A raid on a Las Vegas "boiler room" that sold diet pills across the nation resulted in the arrest of 37 people -- some identified as higher-level managers -- on charges of deceptive trade practices, obtaining money under false pretenses and unregistered telemarketing, the state attorney general's office said Thursday.

The raid on Shop From Your Home, Suite 440 at 1785 E. Sahara Ave., resulted in the seizure of records, bank documents and "tons of pills" said Deputy Attorney General Brian Kunzi.

The business, operating since March 1999, is owned by Brien Keith, according to the attorney general's office. Keith could not be located for comment. He was not at the company at the time of the raid and there is no warrant for his arrest at this time.

Records in the secretary of state's office show Shop From Your Home is a limited liability company whose manager is American Home Shopping Club Inc., of which Keith is the president, secretary and treasurer. A second manager of the company is shown as Taylor Communications Inc. of Tempe, Ariz.

Kunzi said the business played on the nationwide desire of people to lose weight. These telemarketers, he said, would "make outrageous claims" guaranteeing success and cite false medical support for the products.

"They would tell (consumers) they were located in a doctor's office or a weight-loss lab," Kunzi said, adding that they would claim the product would absorb all fat, that weight could be lost by eating pizza, fried chicken and french fries and that the telemarketers were weight-loss consultants.

The most notable consumer complaint, Kunzi said, was failure of the company to provide any refunds. Investigators discovered the company guarantee was honored only if the consumer threatened to contact law enforcement officials.

Any attempt to obtain a refund resulted in a consumer being forced by the business to complete numerous refund request forms and suffer delay after delay until the effort was abandoned, the attorney general's office said.

A search warrant was obtained by the Bureau of Consumer Protection of the attorney general's office after an undercover investigation, which was triggered by a flood of complaints to state agencies.

Kunzi said a salesman would talk a customer over the telephone into buying one product and then a "closer" would come on the line and persuade the consumer to buy additional items. But they were all the same pills, only bottled under different labels. An estimated 10 different labels were found at the business.

The products bore such names as "Fat Eliminator," "Crave Cure" and "Colon Cleanser," according to Kunzi. These substances are not regulated by the Federal Drug Administration.

Shop From Your Home also operated under other names including Doctors Wellness Network, Better Health Products, Wealthy Through Health Investments and Doctor Golden's Weight Laboratories.

Attorney General Frankie Sue Del Papa's called it a "boiler room" telemarketing scheme. She said the company had a sophisticated computer automated dialing system. There was nothing, she said, to suggest the operation was run by a physician or was part of a weight-loss laboratory.

Cooperating in the investigation were the FBI, postal inspectors, Metro Police and the state Division of Parole and Probation.

Kunzi said he expected those arrested to be arraigned in Justice Court early next week. Deceptive trade practices is a misdemeanor charge. Obtaining money under false pretenses and unregistered telemarketing are felony charges.

Kunzi said there were about 150 employees at the location when the raid was conducted. But authorities concentrated on arresting mostly those in management positions.