PHOENIX (Legal Newsline) — The Federal Trade Commission (FTC) could go after HCG Diet Direct LLC and owner Clint Ethington in an attempt to collect $3.2 million owed from a 2014 case involving allegations of deceptive advertising.
After the initial settlement, the monetary penalty was suspended due to Ethington’s inability to pay. U.S. District Court Judge Neil V. Wake recently lifted the suspension, however, finding the defendant failed to disclose certain material assets during the settlement.
“There are serious consequences when defendants lie to the FTC about their finances,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Because Mr. Ethington misled us about his ability to pay, the FTC has triggered the avalanche clause and the judgment against him for $3.2 million.”
The original allegations said Ethington and his company, HCG Diet Direct, marketed an unproven human hormone for weight loss. HCG Diet Direct allegedly advertised their liquid homeopathic HCG drops through YouTube videos, product packaging and in testimonials–all falsely promising rapid and substantial weight loss.
After the settlement, Ethington was banned from making false or misleading claims and required to have scientific evidence for any future claims. The order also imposed a $3.2 million judgment, which was suspended at the time.