Healthy Skepticism Library item: 19596

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Publication type: Media Release

Hadley M
Federal Court: SensaSlim’s funds stay frozen
Australian Skeptics 2011 Jun 23
http://www.skeptics.com.au/latest/announcements/featured-announcement/federal-court-sensaslims-funds-stay-frozen/

Full text:

The Federal Court in Sydney has today (June 23, 2011) granted the Australian Competition and Consumers Commission’s application to extend a freeze over ‘weight loss’ company SensaSlim’s bank account. SensaSlim’s cross-application for release of part of the funds was refused.

The ACCC made its first move last week, without prior notice to SensaSlim, when the company’s account contained $282,000. To achieve that ‘ex parte’ freeze, the ACCC had to prove that there was a strong indication of illegal conduct by SensaSlim.

Today, Counsel for the ACCC informed the Court that its ongoing investigations were raising increasingly serious doubts about SensaSlim’s research. It appeared that the Geneva-based ‘Institute’ that had supposedly conducted the original study was fictitious. Its website included photos of supposed staff, whose identities had in fact been “stolen” to create the semblance of a genuine entity. It appeared that SensaSlim had practised a detailed, calculated fraud and had extracted some $6 million in fees for ‘area managerships’.

Some of these ‘managers’ went to the ACCC. One has given evidence of speaking with SensaSlim’s Mr O’Brien, whose voice was said to sound similar to veteran weight-loss fraudster Peter Foster.

Mr O’Brien was not in Court. Nor did SensaSlim have a solicitor, which would be normal on such occasions. Its lone barrister explained that Mr O’Brien was overseas and that SensaSlim had lacked the resources to serve any formal evidence in response to the allegations put last week. There was only a letter from SensaSlim’s solicitors. It quoted Mr O’Brien as denying being Foster, but stated that SensaSlim had “purchased advertising material and other documents relating to the product known as SLIMist” with which Foster had been involved.

SensaSlim’s account stays frozen until August 31. If the company has real evidence of bills it should pay, then it can approach the Court with a fresh application. The ACCC is continuing its investigations.