Hans Howe

Consumer Health Digest #12-46
December 27, 2012
Current # of subscribers: 10,994

Consumer Health Digest is a free weekly e-mail newsletter edited by Stephen Barrett, M.D., with help from William M. London, Ed.D. It summarizes scientific reports; legislative developments; enforcement actions; news reports; Web site evaluations; recommended and nonrecommended books; and other information relevant to consumer protection and consumer decision-making.

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Herbalife attacked as “pyramid scheme”

Billionaire hedge fund investor Bill Ackman has mounted an attack on Herbalife that he apparently hopes will drive it out of business. The attack was launched with a 3-1/2 hour presentation at the Sohn Conference Special Event on December 20th. During his presentation, Ackman noted:

**Herbalife recruits unwitting “distributors” with the promise they can achieve lofty incomes. However, fewer than 1 in 1,000 do so.

**Herbalife’s products are overpriced but sell because they are bundled with a perceived business opportunity. However, the vast majority of new distributors make nothing.

**Herbalife is a pyramid scheme because its participants obtain their monetary benefits primarily from recruitment rather than the sale of goods to consumers.

Ackman began short-selling as his report was compiled and says that he has short-sold more than 20 million shares. (A short sale is a market transaction in which an investor sells borrowed securities in anticipation of a price decline and is required to return an equal number of shares at some point in the future. Short sellers will gain if the stock price goes down and lose if it rises.) Ackman has pledged to donate any personal profits to charity. Herbalife’s price plummeted after Ackman’s presentation but has rebounded slightly in the past few days.

Pershing Square Capital Management, L.P., which Ackman heads, has launched FactsAboutHerbalife.com, which contains Herbalife distributor presentations, recruiting scripts and presentations, distributor lifestyle videos, third-party investigative reports, Herbalife Today magazines, court hearing and deposition transcripts, archival video and other materials on the company’s history, lead generation systems, SEC correspondence, and other data to help the public understand the facts about Herbalife. The most significant items are the video of Ackman’s presentation, the PowerPoint slides from the presentation, and the 4-part CNN investigation that decimated Herbalife sales in 1985.

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Australian Vaccination Network must change its name

NSW Fair Trading, which safeguards the rights of Australian consumers and advises business and traders on fair and ethical practice, has ordered the Australian Vaccination Network (AVN) to change its name to one that reflects its anti-vaccination stance and beliefs. The Commissioner of Fair Trading stated that the name is misleading because AVN does not present a balanced case for vaccination, does not present medical evidence to back-up its claims, and therefore poses a serious risk of misleading the community. If the AVN does not apply to register a new name by February 21, 2013, its registration may be canceled.

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Two more holistic/biologic dentists facing disciplinary action

The Dental Board of California has charged Richard T. Hansen, Jr., D.M.D. and Andrew S. Yoon, D.M.D. with negligently managing a patient who consulted them in 2007 and 2008 about problems with two teeth. After about a year of unsuccessful treatment, the patient obtained a periodontal consultation at Loma Linda University, was found to have obvious and severe periodontal disease, and had both teeth pulled. The Board’s complaint charges that Hansen and Yoon negligently failed to diagnose and treat the severe periodontal problem, failed to inform him that the probability of saving the teeth was small, and used “laser ozone disinfection” without informing him that it was experimental. The pair operate the Laser Dental Wellness Cancer in Fullerton, California, which offers to “combine the holistic and healthy concepts of using laser dental treatments and biocompatible, biologically safe materials with other natural treatments such as good nutritional support, dental-related homeopathics, and stress-reduction techniques.” Hansen’s Web sites describe him as “a pioneer in improving the present state of dentistry and finding better, more patient-friendly ways of delivering advanced dental care and improving whole-body health.” In 1994, Hansen was disciplined for failing to provide patient records. In 2005, Hansen filed for bankruptcy, listing assets of $389,871and liabilities of $852,581, including $517,193 owed for federal and state income taxes from 1996 through 1999. The bankruptcy trustee’s final report said that during the proceedings Hansen tried to conceal additional assets and use forged documents to bolster certain claims and that Hansen’s conduct was “the most egregious case of bankruptcy fraud” the trustee had ever encountered. Records at the Orange County Superior Court indicate that between 1998 and 2007, Hansen was a defendant in eight cases of malpractice or negligence and that he and Yoon are defendants in two current cases.

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Leading quackery debunkers featured in video

presented at The Amazing Meeting 2012 (“TAM 2012”) has been posted to YouTube. The speakers include Steven Novella, M.D; David Gorski, M.D., Ph.D.; Harriet Hall, M.D.; and and Rachael Dunlop, Ph.D.

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Continuing request for help from Dr. Barrett

In June 2010, Doctor’s Data, Inc. sued Dr. Barrett because it didn’t like what what he wrote about them on Quackwatch and in this newsletter. The events leading up to the suit are described at http://www.quackwatch.org/14Legal/dd_suit.html In November, 2011, about half of the allegations were dismissed, but discovery has been permitted for more than a year. The rest of the suit will probably be dismissed soon after discovery ends, but the proceedings have been time-consuming and expensive. Contributions to the defense fund can be made by mail or through http://www.quackwatch.org/00AboutQuackwatch/donations.html

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Filed under: Medical, Public Health, Quackery |