Firm Says It Cannot Afford Settlement Over Lap-Band Ads in California
A company associated with the 1-800-GET-THIN marketing campaign for weight loss surgery said it cannot afford to pay $1.3 million to settle a California-based false-advertising lawsuit because federal officials seized $109 million from the firm in an ongoing investigation, the Los Angeles Times reports.
Lap-Band surgeries were promoted on billboards, as well as radio and television ads for several years in Southern California. A class-action lawsuit was filed against several companies, including Top Surgeons, behind the campaign for false advertising because they failed to properly disclose risks associated with the surgery.
In 2013, Top Surgeons agreed to pay a $1.3 million settlement, which is still waiting approval from Los Angeles County Superior Court Judge Kenneth Freeman.
The settlement calls for:
- $600,000 for the plaintiffs' lawyers;
- $500,000 for patients; and
- $100,000 for billboards advertising the surgery's risks.
Top Surgeons Lacks Funds
According to Charles Kreindler, a lawyer for Top Surgeons, the company does not have the money to pay the settlement because federal officials in June 2014 seized about $109 million from accounts associated with its owners.
Kreindler said, "There's no money available to fund the settlement."
Federal prosecutors in court filings had said the money is "traceable to a long-term fraud scheme."
Meanwhile, Kathryn Trepinski, an attorney for one of the plaintiffs, said she hopes the government will release some of the seized $109 million to help pay the settlement (Pfeifer, Los Angeles Times, 8/12).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.