• FTC Settles for $7.65 Million Against Canadian Advertiser of Fraudulent Cancer Therapy
  • March 9, 2004
  • Law Firm: Manatt, Phelps & Phillips, LLP - Los Angeles Office
  • With the cooperation of the Competition Bureau in Canada and Mexico, the Federal Trade Commission announced that it tracked down, sued, and on February 12, 2004, settled with defendants CSCT, Inc., John Armstrong, and Michael Armstrong in connection with a sham cancer treatment marketed primarily on their Web site. The FTC commenced a lawsuit against the defendants in February 2003 in U.S. District Court for the Northern District of Illinois (Eastern Division). The complaint charged that the defendants' treatment, known as Cell Specific Cancer treatment, or Zoetron therapy, was bogus and could not, as advertised, kill cancerous cells while protecting healthy cells around the cancer site. Consumers who signed up for the treatment had to fly to Tijuana, Mexico to receive electro-magnetic pulses that would supposedly heat and kill the cancer cells. The defendants charged each consumer up to $15,000-$20,000 for the treatment. The Mexican authorities closed the clinic upon the filing of the complaint by the FTC.

    The settlement contains a judgment in the amount of $7.65 million that was suspended due to the defendants' inability to pay. The settlement also prohibits the defendants from engaging in the advertising, promotion, and sale of the Zoetron therapy. It also bans the defendants from making false and misleading statements or assisting others to make false claims in connection with any cancer therapy and any other service, program, food, drug, or device.

    Significance: This action illustrates that the FTC continues to utilize and build international alliances to help stop Internet scams initiated outside American borders. The FTC is sending a strong message that a physical location outside of the FTC's jurisdiction will not prevent the FTC from reaching and holding marketers legally accountable for scams targeting American citizens.