The onetime promoter of Body Solutions Evening Weight Loss Formula faces a federal court judgment of $155 million.
Harry Siskind, former President of Mark Nutritionals, Inc., has agreed to settle charges by the Federal Trade Commission that he falsified his financial statements in an effort to hide assets from the Commission and to obtain a more favorable settlement to a lawsuit filed against him by the FTC.
The order calls for a judgment of $155 million to be entered against Siskind personally. If the U.S. District Court for the Western District of Texas approves, the $155 million would be due immediately.
Original Suit Against Siskind
In December 2002, the Commission sued Siskind and several other defendants alleging that they engaged in a nationwide scheme to bilk millions of consumers out of $155 million. The FTC reached settlement agreements with all defendants in the fall of 2003.
The settlement with Siskind required him to pay $500,000 and was based on his sworn financial statements that he had no additional assets. The FTC later uncovered evidence establishing that Siskind falsified the financial statements, upon which the Commission relied in accepting the original settlement.
The original settlement with Siskind also contained a $155 million suspended judgment and provided that, if his financial disclosures contained misrepresentations, a judgment for the full $155 million would be entered against him -- a so-called "avalanche clause."
In May 2004, the Commission filed a motion detailing Siskinds false financial statements and asking the district court to reinstate the $155 million judgment against him. The Commissions motion alleged that Siskind misrepresented the nature, cost, and value of assets worth approximately $600,000 and failed to disclose assets worth an additional $300,000.
The FTC charged that Siskinds actions were not mere oversights, but rather part of an elaborate scheme to defraud the FTC and the district court. Just prior to a hearing on the Commissions motion, Siskind agreed to the reinstatement of the full suspended judgment in the amount of $155 million.
The proposed settlement also would require Siskind to cooperate fully with the Commission in all attempts to collect the amounts due, including cooperating with attempts to locate, liquidate and transfer assets.
