Business ProfileforSloan Health Products LLC

8:24-cv-01459-JLB-AAS

On June 17, 2024, the FTC brought against this business and others for violations of federal law. For more information, please check in United States District Court, Middle District of Florida, Tampa Division (case no:  Case 8:24-cv-01459-JLB-AAS)


Acting alone or in concert with others, the businesses have advertised, marketed, distributed, or sold products to consumers throughout the United States, and Sloan Health Products, LLC ("Sloan Health") provides products and fulfillment services consisting of labeling, packaging,
and product returns to online marketers selling purported diet and cosmetic products including the Legion Media Defendants. In 2019, the Better Business Bureau notified Sloan Health that consumers had submitted complaints about incurring unauthorized charges relating to products distributed by Sloan Health.


Since at least 2021, the owner has operated or participated in online unauthorized-billing scams that have taken over $200 million dollars from consumers, using unlawful tactics perpetrated through entities they control, including Legion Media, LLC, KP Commerce, LLC, and Pinnacle Payments, LLC (collectively with Defendants Topiwala and Patel, the "Legion Media Defendants"). 3. The Legion Media Defendants primarily market and sell over the Internet cannabidiol-related products (more commonly known as CBD) and other purported diet and cosmetic products that allegedly promote weight loss, clear skin, and pain relief, among other things. The Legion Media Defendants charge consumers more than the product prices shown online to consumers during the ordering process. The Legion Media Defendants also enroll consumers, without their knowledge or consent, in continuity programs that charge them for additional supplies of products and memberships to access online purported health and wellness resources they never consented to purchase. 4. Since at least December 2022, the Legion Media Defendants have operated as a common enterprise or de facto partnership with Defendants Manindra Garg and Sloan Health Products, LLC (the "Sloan Health Defendants"), with regard to the sale of purported diet and cosmetic products sold through undisclosed continuity programs. The Sloan Health Defendants package, distribute, and handle the returns of these products, and share in the profits of the scam. They also worked together with the Legion Media Defendants to perpetuate the scheme by concealing the Defendants' identities from consumers. In addition, the Legion Media Defendants participate in other unauthorized-billing scams where consumers are subjected to recurring unauthorized charges after they use their credit card to pay a small shipping fee to receive a gift (such as ear buds) after the consumer is told, falsely, that they won the gift from a recognized business (such as Verizon or Ace Hardware). The Legion Media Defendants participate in these business impersonation scams by managing over one hundred merchant accounts, using shell companies and straw owners, that are needed to accept - consumers' credit and debit card payments. This practice of processing credit card transactions through shell entities' merchant accounts is known as "credit card laundering," and it is an unlawful practice used by fraudulent merchants to circumvent credit card associations' monitoring programs and avoid detection by consumers and law enforcement. 



The following are violations under Section 5 of the FTC Act that prohibits "unfair or deceptive acts or practices in or affecting commerce." found by the FTC:
  
COUNT I: Misrepresenting that Consumers Will Receive Free Products (Against all Defendants)


COUNT II: Unfairly Charging Consumers Without Consent (Against all Defendants)


COUNT III: Unfairly Injuring Consumers by Engaging in Credit Card Laundering  (Against the Legion Media Defendants)


COUNT IV: Misrepresenting Affiliation With Businesses (Against the Legion Media Defendants)


COUNT V: Violation of ROSCA - Inadequate Disclosures (Against all Defendants)


COUNT VI: Violation of ROSCA- Nonconsensual Enrollment (Against all Defendants)

COUNT VII: Violation of ROSCA- Failure to Provide Simple Cancellation Mechanism (Against all Defendants)

COUNT VIII: Unauthorized Debiting from Consumers' Accounts (Against all Defendants)


Wherefore, Plaintiff requests that the Court:
A. Enter a permanent injunction to prevent future violations of the
FTC Act, ROSCA, and EFTA;
B. Grant preliminary injunctive and ancillary relief, including
temporary and preliminary injunctions, an order freezing assets, immediate
access to Defendants' business premises, and the appointment of a receiver;
C. Award monetary and other relief within the Court's power to grant; and
D. Award any additional relief as the Court determines to be just
and proper.

The list of Defendants are as follows: 
Legion Media, LLC ("Legion Media"); Pinnacle Payments, LLC ("Pinnacle Payments"); and KP Commerce, LLC, and Sloan Health Products, LLC committed violations of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), Sections 3 and 4 of the Restore Online Shoppers' Confidence Act ("ROSCA"), 15 U.S.C. §§ 8402 and 8403, and Section 907(a) of the Electronic Fund Transfer Act ("EFTA"), 15 U.S.C. § 1693e(a), and Section 1005. l0(b) of Regulation E, 12 C.F.R. § 1005. l0(b). For these violations, the FTC seeks relief, including a temporary, preliminary, and permanent injunction, monetary relief, and other relief, including an asset freeze, the appointment of a receiver, and immediate access to the Defendants' business premises, pursuant to Sections 13(b) and 19 of the FTC Act, 15 U.S.C. §§ 53(b) and 57b, Section 5 of ROSCA, 15 U.S.C. § 8404, and Section 918(c) of EFTA, 15 U.S.C. § 1693o(c)

 

On September 16^th, 2024, at the request of the Federal Trade Commission, a federal court today approved settlements that will require the forfeiture of assets valued at about $40 million from a group of defendants who allegedly defrauded consumers nationwide by enrolling them, without their knowledge, into continuity plans for CBD and keto-related products that they did not agree to buy.

The defendants include U.K. resident Harshil Topiwala, Florida resident Kirtan Patel, and the three companies they operated, Legion Media, LLC, KP Commerce, LLC, and Pinnacle Payments, LLC (together, the Legion Media defendants) as well as Florida resident Manindra Garg and a company he operated called Sloan Health Products, LLC.

In addition to imposing monetary judgments, the orders permanently ban all the defendants from the alleged illegal conduct, as well as from debiting money from consumers’ accounts without prior authorization and from credit card laundering. They also require the defendants to turn over or relinquish claims to substantial assets, as set forth in the orders, which will be used to provide refunds to

The court approved three orders settling the FTC’s complaint that contain similar conduct provisions and separate provisions detailing the monetary judgments imposed by the court against Topiwala, Legion Media, LLC, and Pinnacle Payments, LLC; Garg and Sloan Health Products LLC,; and Patel and KP Commerce, LLC.

Conduct Provisions: The three orders permanently ban all defendants from marketing or selling any product or service using a negative option feature. They also ban the defendants from marketing or selling any product or service as a “forced upsell,” including by using pre-checked boxes for upsells or by bundling products together with no way for consumers to opt out.

The orders also prohibit the defendants from failing to disclose certain facts regarding costs, charges, refund and cancellation policies, endorsements, and “free” trial offers, and require them to have adequate substantiation before making health-related claims for CBD, skincare, or weight-loss products, or any other food, drug, dietary supplement, or cosmetic.

Further, the orders bar all defendants from violating the EFTA and engaging in illegal credit card laundering practices. They are also prohibited from failing to disclose material facts to a financial institution relating to obtaining a merchant account and from engaging in any tactics to avoid detection by fraud and risk-monitoring programs, including the use of shell companies. Finally, the orders prohibit all defendants from passing consumers’ billing information to another seller and from violating ROSCA.

Monetary Provisions: The court imposed a $30 million judgment against Topiwala and his companies. The judgment will be suspended after they turn over or relinquish claims to bank accounts and other assets, including a collectible Michael Jordan worn jersey and shorts from the 1998 Eastern Conference Semi Finals (purchased for $1.35 million) and a Richard Mille Tourbillon Aerodyne watch (purchased for $1.225 million).

The court imposed a $30 million judgment against Garg and Sloan Health Products, which will be suspended after they turn over or relinquish claims to bank accounts and other assets, including luxury cars, watches, and jewelry. The order against Patel and KP Commerce imposes a $3 million judgment, which will be suspended upon the transfer of cryptocurrency assets valued at approximately $100,000 to the FTC.

The Commission vote authorizing staff to file the proposed orders was 5-0. They were filed in the U.S District Court for the Middle District of Florida, Tampa Division, and have been signed by District Court Judge John Badalamenti.

 

NOTE: Stipulated final orders or injunctions have the force of law when approved and signed by the District Court judge.

 

In May 2017, BBB contacted the business regarding its advertising of free trial periods of its products. Consumers that sign up for the free trial period are enrolled in a monthly subscription for additional products. BBB requested the business substantiate that the claims meet the standards outlined in BBB's Code of Advertising (Section 18, Negative Option Plans, Continuity Plans and Automatic Shipments). The Code maintains that "Any advertisement for a product or service that includes an offer to sell or provide consumers with additional goods or services under a negative option feature must include a clear and conspicuous disclosure of all material terms of the negative option feature." Material terms that should be clear and conspicuous include the existence of the negative option feature, the cost of the additional goods or services, how consumers can cancel and avoid future shipments and charges, and how consumers can return items that they do not want. The Code continues that "advertisers must avoid making disclosures that are vague, unnecessarily long or which contain contradictory language."

Additionally, BBB asked the company to substantiate claims made on its website about the efficacy or results of using the company's products. BBB requested the business substantiate the claims per standards outlined in BBB's Code of Advertising (Section 34, Claimed Results). Claims as to efficacy or results which will be obtained by or realized from a particular product should be based on recent and competent scientific or other objective data. Advertisers should be prepared to substantiate such claims.

In February 2019 the Business sent response:

Sloan Health Products is a private label manufacturer. A private label product is manufactured by a contract or third-party manufacturer and sold under a retailer's brand name. As the retailer, you specify everything about the product - what goes in it, how it's packaged, what the label looks like - and pay to have it produced and delivered to your store.

So with that being said the end consumer would call that company if there was any issue isn't Sloan Health Products.