*****
ANTHONY COLBERT couldn’t seem to escape Smilin’ Bob. Every time the securities lawyer from Richmond, California, turned on his TV, there was Bob driving a bright blue NASCAR stock car around a track.
“Catch the action as Bob slices through the competition like a warm knife through butter!” the announcer boomed as Bob floored it. (The car wasn’t just a prop; Warshak actually sponsored an official NASCAR Enzyte team.)
“I thought the ads were funny,” says Colbert, now 46, who adds that it was the offer of a free sample that persuaded him to pick up the phone. “There was no deep problem. For me, it was kind of ‘Why not?’ ”
Why not indeed? It’s an explanation for ordering Enzyte that I’ve heard from several men. Ask a man to describe the mind-set that made him dial 1-877-4ENZYTE and it always seems to boil down to this: If it might help and can’t hurt, what have I got to lose?
Your money, it turns out. “I went to the Web site,” Colbert recalls. “I read carefully what it said about charging my credit card for shipping only. Then, a couple of months later, another charge on my credit card.”
What happened to Colbert wasn’t uncommon. In fact, witnesses would testify at Warshak’s trial, it was routine. Off and on for years, once Berkeley got its hands on your credit card, it would sign you up—without telling you first—for what’s called “continuity”: automatic monthly billing for shipments of whatever you’d received that initial “free” sample of. In the end, according to a class-action lawsuit filed in Ohio, each customer didn’t lose much—usually about $100. But the sheer volume of Enzyte buyers made the profits pile up. (Warshak settled the Ohio suit in 2006 for $4.7 million and resolved the claims of another five states with a $2.5 million settlement.)
The prosecution’s witnesses included twenty-one people who’d ordered Berkeley products and found irregular charges to their cards. There was a truck driver who worked the Florida-to-Houston route. A farm-loan manager from Virginia. A legal assistant from Georgia who bought Enzyte for her husband and Avlimil, a female-libido-enhancement pill, for herself. There was Colbert, the lawyer in California, and Jimmy Brown, a firefighter and active-duty National Guardsman from Hope Hull, Alabama. Brown testified that his credit card had been charged $69.95 a month without his knowledge during the six months he’d been deployed to Iraq. Vern Meyer Robb, a retired engineer who’d spent forty years with General Motors, had a similar tale to tell.
When I reach Robb at his home near Knoxville, Tennessee, he tells me to speak up. “I can’t hear too well,” he says matter-of-factly. “I’m 85 years old.”
Robb, who flew thirty missions over Germany as a crew member on a B-17 bomber during World War II, says he ordered Enzyte after seeing a small ad in the back of Money magazine. “At that time, Viagra was about $10 a shot. So this sounded like a good thing.”
Robb followed the directions—one pill a day. “I didn’t notice anything except I developed a stomach ache,” he says. “So I thought, well, maybe I might need more. So the next day I took two. And all I did was get a bigger stomach ache. So I just figured, well, it was another scam, and I fell for it.” His suspicions were confirmed when his credit card was charged without his permission a month later.
Warshak’s nondisclosure of Berkeley’s continuity program was the precipitating event, prosecutors would successfully argue, in what became a sort of falling-dominoes progression of criminal acts—what assistant U.S. attorney Anne Porter dubbed “a cycle of fraud upon fraud.” The first domino began to wobble when customers started complaining about how hard Berkeley sometimes made it to get a refund. (One Berkeley employee testified that the company required unsatisfied Enzyte buyers to submit a notarized letter from their doctors verifying that their penises hadn’t grown.) Frustrated by Berkeley’s obstinacy, customers then went to their credit card companies to cancel the transaction (what’s known as a chargeback).
Warshak sent numerous e-mails to his top executives saying that automatic monthly billing was the “lifeblood” of the company. And you can’t run a continuity program without being able to charge people’s credit cards. So when Berkeley’s chargebacks started to soar (something credit card companies frown upon), Warshak got creative. Instead of “dinging” a customer’s credit card once for a monthly supply, he told employees to split the bill into two or three pieces and “double-ding” or “triple-ding” the card—falsely inflating the number of transactions and thus lowering Berkeley’s chargeback ratio.
If Steve did NOT disclose the auto ship then how did 1 MILLION customers cancel during the free trial period? Yes Steve got greedy and let his fast growth turn to arrogance, if he was outgrowing his systems every six months then he needed to slow down the TV ads and play catch up something very few business people want to do, he should have freely issued refunds and been kind to his customers. the proof of penis growth and attempting to re sell current clients the same product under false pretense is flat wrong! however the 25 years is legally and clearly way too long of a sentence.