State fines T-UP millions

Company also facing federal trial in sale of aloe vera as treatment

May 11, 2000|By Gail Gibson | Gail Gibson,SUN STAFF

A Baltimore company accused of selling sick and dying people an untested and possibly dangerous aloe vera treatment must pay a $3.7 million fine and repay its customers, the head of the state Consumer Protection Division has ruled.

Under the ruling announced yesterday by state Attorney General J. Joseph Curran Jr., the company, T-UP Inc., also must stop claiming that its product can treat or cure diseases such as cancer, AIDS or herpes.

The decision by the state consumer protection chief, William Leibovici, comes in the middle of a federal criminal trial against T-UP's president, Allen J. Hoffman. It is one of the first trials in the country focusing on alternative medicines.

Federal prosecutors charge that Hoffman duped thousands into buying a "miracle treatment" that amounted to little more than a wide-scale fraud. T-UP officials have countered that they believed in the product, and no one was misled.

The trial in U.S. District Court in Baltimore started early last month and is expected to continue through this month, prompting an attorney for one of Hoffman's partners to question the timing of Curran's announcement about the state case.

Attorney David Freishtat represents T-UP financing partner Neal Deoul, who was named in the consumer protection case along with Hoffman but not in the federal criminal charges. Freishtat said he plans to hold a news conference Friday to comment on the decision.

Through spokesman Levi Rabinowitz, Freishtat said he would explain "questions about how unethical and irresponsible he feels the attorney general's news conference was."

Hoffman attorney Michael Marr could not be reached last night to comment.

A spokesman for the attorney general said the announcement about the consumer fraud case was not intended to influence the outcome of the separate federal trial. The final order in the state's case was handed down Friday.

Curran's office contacted U.S. District Judge William M. Nickerson before holding yesterday's news conference, said Curran spokesman Sean Caine.

Curran called the alleged T-UP scheme the "most outrageous deception" case he has pursued as attorney general.

"When you're dealing with a cancer victim or a diagnosis of cancer, there's high anxiety to the patient and also to the patient's family," he said. "Then you have this that suggests here's a cure. That's something that obviously raises your hopes and certainly, the claims were unfounded."

The consumer protection claim said T-UP Inc. collected more than $2.3 million from April 1997 to October 1998 from desperate and dying patients. About 3,700 people sought treatment -- and the state's $3.7 million fine reflects the maximum penalty against T-UP of $1,000 for each patient.

The company also was ordered to pay restitution, which Caine said could total millions more.

The federal trial focuses on the families of 17 terminally ill people, all of whom paid for T-UP treatments, a concentrated form of aloe vera and the compound cesium chloride. Some took the treatment in pills or syrup form, but some were injected.

Aloe vera is legally sold over the counter, and health food stores sell it as a nutritional supplement. But Hoffman and his partners marketed their product as a cure and treatment for cancer, though it had not been tested or approved by the U.S. Food and Drug Administration.

Hoffman's attorneys argued that the company wasn't trying to mislead anyone. Marr said in the trial's opening statements that Hoffman thought he was providing a valuable service.

"His intention was to help people get well," Marr said. "He might not have crossed every `t' and dotted every `i,' but he was trying to help them."

After weeks of hearing from prosecution witnesses, jurors are listening to defense testimony.

A Canadian man said yesterday the aloe treatments have kept him alive for three years after he was diagnosed with cancer of the esophagus and told he had two weeks to live.

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