The notorious conman Peter Foster, the "puppeteer" behind weight loss scam SensaSlim, has been fined $660,000 and permanently banned from being a company director or having any business in the diet or health industry.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
On Wednesday Federal Court Justice David Yates fined SensaSlim a total of $3.55 million for promoting its shonky diet nasal spray to unsuspecting franchisees and the general public.
An investigation by the Australian Consumer and Competition Commission found the company was using a non-existent Swiss research institute to back claims its product would help people lose weight without any change in diet or exercise.
In April 2014 the Federal Court found the company, which is in liquidation, engaged in misleading or deceptive conduct by failing to disclose Foster's involvement in the SensaSlim franchise system.
Career conman Foster's role was "painstakingly concealed" from 80 franchisees who paid $60,000 to sign up with the promise they would earn $4000 a week.
SensaSlim earned approximately $6.4 million from the sale of these franchises.
Foster was behind the invention of a fake Swiss research institute, Institut de Recherche Intercontinental, and falsely represented that the product was the subject of a large worldwide clinical trial that established its efficacy. No such trial was ever conducted.
In handing down the penalty, Justice Yates said Foster is "beyond redemption".
"He preys on the right-mindedness of others to cheat and deceive. In the present case, he lurked behind SensaSlim precisely for that purpose."
The court found SensaSlim directors Peter O'Brien and former UBS banker Michael Boyle concealed Mr Foster's role in the business, knowing his longstanding reputation as a conman would turn people off the scheme.
Mr O'Brien was fined $55,000 and disqualified from managing a corporation for 10 years. Mr Boyle was fined $75,000 and disqualified for three years. His penalty was reduced due to his mental health issues.
Late last year Foster was freed from a Queensland prison after serving one year of an 18-month sentence for breaching his bail conditions. He had been banned in 2005 from any involvement in the weight-loss industry.
Foster has served prison sentences in the US, Britain, Vanuatu and Australia. During the 1980s he persuaded topless model and pop singer Samantha Fox and the Duchess of York Sarah Ferguson to promote his product Bai Lin tea, which falsely claimed to promote weight loss and well-being.
