Esrim Ve Sheva Holding Corp

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF ESRIM VE SHEVA HOLDING CORP., ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATIONS OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-4030; File No. 0123116 Complaint, December 17, 2001--Decision, December 17, 2001 This consent order addresses advertising representations that Respondent Esrim Ve Sheva Holding Corporation, sometimes doing business as Gadget Universe – and its chief executive officer, Respondent Alexander Elnekaveh – made about Super FuelMAX, an automotive fuel-line magnet. The order, among other things, prohibits the respondents from making any claim in connection with any fuel-line magnet, or any purported fuel-saving or emission-reducing product for use with a motor vehicle – including claims that such product improves fuel burn, reduces fuel consumption, or reduces emissions or pollutants; or about the benefits, performance, or efficacy of such product – without possessing and relying on competent and reliable evidence, which, when appropriate, must be competent and reliable scientific evidence, substantiating the claim. The order also prohibits the respondents from misrepresenting (1) that any user testimonial or endorsement of the product reflects the actual and current opinions, findings, beliefs, or experiences of the user, or (2) the existence, contents, validity, results, conclusions, or interpretations of any test, study, or research. Participants For the Commission: Jonathan Cowen, Angela Floyd, Joni Lupovitz, and Elaine D. Kolish For the Respondent: Bernard Schwam.

COMPLAINT The Federal Trade Commission, having reason to believe that Esrim Ve Sheva Holding Corporation, sometimes doing business as Gadget Universe, and Alexander Elnekaveh, individually and as an officer of the corporation ("respondents"), have violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges:

VOLUME 132 Complaint 1a.Respondent Esrim Ve Sheva Holding Corp. is a New York corporation with its principal office or place of business at 9408 Owensmouth Ave., Chatsworth, California 91311. 1b. Respondent Alexander Elnekaveh is an officer of the corporate respondent. Individually or in concert with others he formulates, directs, or controls the policies, acts, or practices of the corporation, including the acts or practices alleged in this complaint. His principal office or place of business is the same as that of Esrim Ve Sheva Holding Corp.

2. Respondents have advertised, offered for sale, sold, and distributed products to the public, including Super FuelMAX, an automotive aftermarket fuel-line magnet device. 3. The acts and practices of respondents alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act. 4. Respondents have disseminated or have caused to be disseminated advertisements for the Super FuelMAX, including but not necessarily limited to the attached Exhibits A, B, and C. These advertisements contain the following statements: A. Finding the world’s most extraordinary products for you is not my job – it’s my mission. . . . No matter where you see our unique products, I’ve personally selected each one from the 1000’s I discover around the globe. Here’s one the big oil companies don’t want you to know about: Super FuelMAXRF on page 52 will cut your fuel costs by 27% and reduce harmful emissions by up to 40%. . . . Sincerely, Alex President, Gadget Universe [Exhibit A (catalog ad)] VOLUME 132 Complaint B. FUEL BEFORE FUEL AFTER [graphical depiction of fuel molecules lining up in straight columns and rows after passing through Super FuelMax] SAVE UP TO 27% ON GAS!! [Exhibit B (catalog ad)] C. Fight the War Against Rising Gas Prices – Reduce Your Fuel Costs by An Amazing 27% with Super FuelMAXRF, and Keep the Air Cleaner At the Same Time I refuse to be at the mercy of OPEC! So, I searched for the best product I could find to save money on fuel for my gasguzzling SUV. I wanted something I could install myself, without tools, that would also guarantee to boost engine performance. The Super FuelMAX came through with flying colors. It clamps onto my fuel line, and two powerful neodymium conductors use the scientific principal of magnetic resonance to give me better fuel burn. A certified EPA laboratory reports an amazing 27% in increased mileage and 42% reduction in harmful pollutants. Since the Super FuelMAX is used by trucking fleets and transportation departments around the world, it’s exactly what I need to reduce my fuel costs today without worrying about how high they’ll raise oil prices in the Middle East tomorrow.

[Exhibits B (catalog ad) and C (Internet ad)] 5. Through the means described in Paragraph 4, respondents have represented, expressly or by implication, that, when applied to the fuel line in a motor vehicle, Super FuelMAX: A. causes fuel molecules to line up in straight columns and rows;

VOLUME 132 Complaint B. improves fuel burn through magnetic resonance; C. reduces fuel consumption;

D. reduces fuel consumption by 27% or up to 27%; E. reduces harmful emissions or pollutants; and F. reduces harmful emissions or pollutants by 42% or up to 40%.

6. Through the means described in Paragraph 4, respondents have represented, expressly or by implication, that they possessed and relied upon a reasonable basis that substantiated the representations set forth in Paragraph 5, at the time the representations were made.

7. In truth and in fact, respondents did not possess and rely upon a reasonable basis that substantiated the representations set forth in Paragraph 5, at the time the representations were made. Therefore, the representation set forth in Paragraph 6 was, and is, false or misleading.

8. Through the means described in Paragraph 4, respondents have represented, expressly or by implication, that tests performed at a certified EPA laboratory prove that Super FuelMAX: A. increases mileage by 27%; and B. reduces harmful pollutants by 42%;

9. In truth and in fact, tests performed at a certified EPA laboratory do not prove that Super FuelMAX: A. increases mileage by 27%; and B. reduces harmful pollutants by 42%;

VOLUME 132 Complaint Therefore, the representations set forth in Paragraph 8 were, and are, false or misleading.

10. Through the means described in Paragraph 4, respondents have represented, expressly or by implication, that a testimonial from respondent Alexander Elnekaveh appearing in the advertisements for Super FuelMAX reflects: A. Elnekaveh’s actual findings and experience with the product; and B. the typical or ordinary experience of members of the public who use the product.

11. In truth and in fact, a testimonial from respondent Alexander Elnekaveh appearing in the advertisements for Super FuelMAX does not reflect:

A. Elnekaveh’s actual findings and experience with the product; and B. the typical or ordinary experience of members of the public who use the product.

Therefore, the representations set forth in Paragraph 10 were, and are, false or misleading.

12. The acts and practices of respondents as alleged in this complaint constitute unfair or deceptive acts or practices, in or affecting commerce, in violation of Section 5(a) of the Federal Trade Commission Act.

THEREFORE, the Federal Trade Commission this seventeenth day of December, 2001, has issued this complaint against respondents.

By the Commission.

EXHIBIT A finding the world’s most extraordinary products for you is not my job—it's my mission. [f it doesn't make your fife healthier, safer, more efficient, simpler or more fun, you won’s find it here or on our web site. And thanks to you, www. gadgetuniverse.com has twice as many new customers as our two major competitors combined! Sign up to receive our e-mail specials and save hundreds of dollars—we'll give you even more fantastic values with limited editions, oneof-a-kind sales, close-outs and sweepstales you won't find in the catalog. | promise you your e-mail address is 100% secure with us. No matter where you see our unique products, I've personally selected each one from the 1000's | discover around the globe. Here’s one the big oll companies don’t want you to know abouit: Super FuelMAX® on page 52 will cut ea your fuel costs by 27% and reduce harmful emissions up to 40%. We'll refund your money if it doesn't work for you! Another standout is the Junghans MEGA Radio-Controlled arch on page 6,a handsome, high tech wonder we've featured before, but now it’s hundreds of dollars off the original $1000 price. In print or on the web, there's always something out-of-this-world from Gadget Universe. | make sure of it. Sincerely, Me a Lf Ce 7 Alex President, Gadget Universe [email protected] EXHIBIT B The World’s Finest Wireless.

Headset Will Give You The Freedom You’ve Never Had Before fon the road so much | don’t Knew how | got along 'y comfortable hands-free universal ee Dangling wires are gone forever! More than once i've tangled the wires and yanked my headset off, right in the middle of an important business call. This incredible _set is so tiny and fits so light, you'd thin mi5 1 7 1 2 2 742 603 82 30 89.869659 talking5 1 7 1 2 3 838 609 26 16 95.842056 to5 1 7 1 2 4 877 602 41 22 96.005081 thes 1 7 1 2 5 930 602 35 21 76.167130 air.4 1 7 1 3 0 689 645 228 25 -1 5 1 7 1 3 1 689 646 53 24 96.819237 Ands 1 7 1 3 2 755 646 40 22 96.717049 thes 1 7 1 3 3 809 645 78 22 96.500465 sounds 1 7 1 3 4 901 651 16 15 92.750244 is4 1 7 1 4 0 689 688 266 27 -1 5 1 7 1 4 1 689 690 65 23 85.401237 clear.5 1 7 1 4 2 764 695 58 16 91.952393 even5 1 7 1 4 3 837 688 69 22 95.943810 when5 1 7 1 4 4 921 693 34 22 96.388878 my4 1 7 1 5 0 689 728 238 30 -1 5 1 7 1 5 1 689 731 88 24 88.502266 mabile5 1 7 1 5 2 791 730 81 28 53.266960 phones 1 7 1 5 3 886 737 15 15 95.272804 is5 1 7 1 5 4 915 728 12 23 96.293625 52 1 8 0 0 0 641 401 6 353 -1 3 1 8 1 0 0 641 401 6 353 -1 4 1 8 1 1 0 641 401 6 353 -1 5 1 8 1 1 1 641 401 6 353 95.000000 2 1 9 0 0 0 131 406 520 358 -1 3 1 9 1 0 0 131 406 520 358 -1 4 1 9 1 1 0 131 406 520 358 -1 5 1 9 1 1 1 131 406 520 358 95.000000 2 1 10 0 0 0 211 751 434 7 -1 3 1 10 1 0 0 211 751 434 7 -1 4 1 10 1 1 0 211 751 434 7 -1 5 1 10 1 1 1 211 751 434 7 95.000000 2 1 11 0 0 0 148 814 759 253 -1 3 1 11 1 0 0 150 814 757 75 -1 4 1 11 1 1 0 150 814 757 39 -1 5 1 11 1 1 1 150 824 41 23 95.907005 thes 1 11 1 1 2 204 824 51 29 95.907005 jacks 1 11 1 1 3 268 829 49 16 96.354256 into5 1 11 1 1 4 331 823 40 22 93.243500 thes 1 11 1 1 5 385 822 105 24 85.965714 headsez,5 1 11 1 1 6 501 822 44 21 96.347900 ands 1 11 1 1 7 559 820 35 22 66.031631 i'm5 1 11 1 1 8 608 818 66 31 91.305725 goods 1 11 1 1 9 688 824 26 16 95.747002 to5 1 11 1 1 10 726 824 34 23 95.612137 go.5 1 11 1 1 11 778 815 54 23 91.892372 Ands 1 11 1 1 12 847 814 60 23 76.872276 I'ma4 1 11 1 2 0 150 862 434 27 -1 5 1 11 1 2 1 150 867 86 22 85.735886 better,5 1 11 1 2 2 247 865 61 23 96.216431 safer5 1 11 1 2 3 321 865 76 22 96.216431 drivers 1 11 1 2 4 411 865 102 21 96.406784 because5 1 11 1 2 5 525 862 26 23 95.599808 of5 1 11 1 2 6 563 868 21 16 65.311279 tt.3 1 11 2 0 0 148 910 517 35 -1 4 1 11 2 1 0 148 910 517 35 -1 5 1 11 2 1 1 148 917 88 24 90.931961 TP2165 1 11 2 1 2 249 928 8 4 89.313004 -5 1 11 2 1 3 268 916 38 24 96.688560 Air5 1 11 2 1 4 317 915 81 30 96.563065 Magic5 1 11 2 1 5 412 913 119 25 89.670937 Headset5 1 11 2 1 6 543 925 8 3 89.670937 -5 1 11 2 1 7 559 910 106 28 83.267601 $99.953 1 11 3 0 0 148 953 546 31 -1 4 1 11 3 1 0 148 953 546 31 -1 5 1 11 3 1 1 148 958 107 25 71.281746 TP518S5 1 11 3 1 2 268 970 7 4 91.331467 -5 1 11 3 1 3 288 958 103 24 34.152519 StarTac5 1 11 3 1 4 404 956 63 25 95.895546 GSM5 1 11 3 1 5 481 955 85 25 95.895546 Phones 1 11 3 1 6 576 953 118 31 96.736107 Adapter3 1 11 4 0 0 148 994 605 31 -1 4 1 11 4 1 0 148 994 605 31 -1 5 1 11 4 1 1 148 1001 109 24 40.180546 TPS518N5 1 11 4 1 2 270 1013 8 4 88.490715 -5 1 11 4 1 3 292 999 75 25 58.566322 Nokia5 1 11 4 1 4 380 998 144 25 94.647751 5100/61005 1 11 4 1 5 537 996 87 25 95.179367 Series5 1 11 4 1 6 635 994 118 31 77.568855 Adapter:3 1 11 5 0 0 148 1037 595 30 -1 4 1 11 5 1 0 148 1037 595 30 -1 5 1 11 5 1 1 148 1043 108 24 22.628723 TPS18E5 1 11 5 1 2 266 1055 8 4 93.232063 -5 1 11 5 1 3 288 1042 100 24 96.381775 Ericson5 1 11 5 1 4 402 1041 117 24 95.772171 600/7005 1 11 5 1 5 532 1039 86 24 96.717224 Series5 1 11 5 1 6 630 1037 113 30 96.696594 Adapter2 1 12 0 0 0 149 1084 175 26 -1 3 1 12 1 0 0 149 1084 175 26 -1 4 1 12 1 1 0 149 1084 175 26 -1 5 1 12 1 1 1 149 1085 97 25 96.017555 $14.955 1 12 1 1 2 258 1084 66 24 96.017555 each2 1 13 0 0 0 942 1227 63 230 -1 3 1 13 1 0 0 942 1227 63 230 -1 4 1 13 1 1 0 942 1227 63 230 -1 5 1 13 1 1 1 942 1227 63 230 95.000000 2 1 14 0 0 0 954 1428 43 79 -1 3 1 14 1 0 0 954 1399 43 108 -1 4 1 14 1 1 0 954 1428 43 79 -1 5 1 14 1 1 1 954 1399 43 108 48.185326 ings2 1 15 0 0 0 954 1505 29 208 -1 3 1 15 1 0 0 954 1505 29 208 -1 4 1 15 1 1 0 954 1505 29 208 -1 5 1 15 1 1 1 954 1505 29 208 8.877151 SSUOMIU2 1 16 0 0 0 563 1176 125 858 -1 3 1 16 1 0 0 563 1176 125 858 -1 4 1 16 1 1 0 563 1176 125 858 -1 5 1 16 1 1 1 563 1176 125 858 95.000000 2 1 17 0 0 0 1076 1003 70 87 -1 3 1 17 1 0 0 1076 1003 70 87 -1 4 1 17 1 1 0 1076 1003 70 87 -1 5 1 17 1 1 1 1076 1003 70 87 95.000000 2 1 18 0 0 0 1042 2 9 1149 -1 3 1 18 1 0 0 1042 2 9 1149 -1 4 1 18 1 1 0 1042 2 9 1149 -1 5 1 18 1 1 1 1042 2 9 1149 95.000000 2 1 19 0 0 0 1285 6 1074 117 -1 3 1 19 1 0 0 1285 6 1074 117 -1 4 1 19 1 1 0 1336 6 966 50 -1 5 1 19 1 1 1 1336 7 306 40 95.440811 WIRELESS5 1 19 1 1 2 1664 6 320 50 94.100632 CELLULAR5 1 19 1 1 3 2004 6 298 44 89.928658 HEADSET:4 1 19 1 2 0 1285 53 1074 70 -1 5 1 19 1 2 1 1285 65 228 58 95.692993 WORKS5 1 19 1 2 2 1530 64 155 48 95.692993 WITH5 1 19 1 2 3 1706 62 189 57 94.564537 MOST5 1 19 1 2 4 1909 63 152 37 94.564537 CELLS 1 19 1 2 5 2087 53 272 45 95.791794 PHONES!2 1 20 0 0 0 1670 196 665 945 -1 3 1 20 1 0 0 1670 196 665 945 -1 4 1 20 1 1 0 1670 196 665 945 -1 5 1 20 1 1 1 1670 196 665 945 95.000000 2 1 21 0 0 0 1045 1133 1462 17 -1 3 1 21 1 0 0 1045 1133 1462 17 -1 4 1 21 1 1 0 1045 1133 1462 17 -1 5 1 21 1 1 1 1045 1133 1462 17 95.000000 2 1 22 0 0 0 1911 1308 593 114 -1 3 1 22 1 0 0 1911 1308 593 114 -1 4 1 22 1 1 0 1911 1308 593 49 -1 5 1 22 1 1 1 1911 1312 192 45 95.936043 SAVES 1 22 1 1 2 2128 1312 94 43 94.977211 UP5 1 22 1 1 3 2248 1310 91 43 94.977211 TO5 1 22 1 1 4 2361 1308 143 44 96.052719 27%4 1 22 1 2 0 2054 1376 320 46 -1 5 1 22 1 2 1 2054 1378 110 44 91.814423 ON5 1 22 1 2 2 2188 1376 186 44 82.159210 GASI!!2 1 23 0 0 0 1127 1198 729 262 -1 3 1 23 1 0 0 1127 1198 729 262 -1 4 1 23 1 1 0 1127 1198 729 262 -1 5 1 23 1 1 1 1127 1198 729 262 95.000000 2 1 24 0 0 0 1124 1462 1363 236 -1 3 1 24 1 0 0 1124 1462 1363 236 -1 4 1 24 1 1 0 1561 1462 335 70 -1 5 1 24 1 1 1 1561 1529 1 3 14.778046 .5 1 24 1 1 2 1661 1462 99 50 96.285683 FUELS 1 24 1 1 3 1771 1462 125 48 96.712730 AFTER4 1 24 1 2 0 1124 1548 1363 52 -1 5 1 24 1 2 1 1124 1561 124 39 96.478958 Fights 1 24 1 2 2 1266 1561 77 30 96.478958 thes 1 24 1 2 3 1362 1560 98 30 96.869553 Wars 1 24 1 2 4 1478 1557 187 40 96.389900 Against5 1 24 1 2 5 1684 1555 146 38 95.986794 Rising5 1 24 1 2 6 1851 1553 98 31 96.379791 Gas5 1 24 1 2 7 1969 1549 388 33 91.806969 Prices—Reduces 1 24 1 2 8 2375 1548 112 29 96.753151 Your4 1 24 1 3 0 1125 1596 1330 51 -1 5 1 24 1 3 1 1125 1611 101 31 95.369698 Fuels 1 24 1 3 2 1247 1610 143 31 95.369698 Costs5 1 24 1 3 3 1410 1609 58 38 96.278984 by5 1 24 1 3 4 1485 1609 62 29 96.928856 An5 1 24 1 3 5 1567 1605 212 38 96.202110 Amazing5 1 24 1 3 6 1799 1603 105 31 96.490326 27%5 1 24 1 3 7 1924 1601 103 31 96.843361 with5 1 24 1 3 8 2048 1600 150 38 96.451309 Super5 1 24 1 3 9 2216 1596 239 37 25.598007 FueiMAX®,4 1 24 1 4 0 1124 1649 1099 49 -1 5 1 24 1 4 1 1124 1661 91 31 96.902031 ands 1 24 1 4 2 1238 1661 126 37 95.184074 Keeps 1 24 1 4 3 1383 1659 80 31 95.184074 thes 1 24 1 4 4 1481 1658 67 30 96.013481 Air5 1 24 1 4 5 1566 1656 195 31 96.701065 Cleaners 1 24 1 4 6 1778 1654 52 29 96.423668 At5 1 24 1 4 7 1847 1652 79 31 95.577866 thes 1 24 1 4 8 1946 1650 143 32 96.286507 Same5 1 24 1 4 9 2108 1649 115 30 96.286507 Time2 1 25 0 0 0 1124 1706 1359 377 -1 3 1 25 1 0 0 1124 1706 1359 377 -1 4 1 25 1 1 0 1124 1706 1359 40 -1 5 1 25 1 1 1 1124 1719 3 22 68.046257 |5 1 25 1 1 2 1143 1719 79 22 89.223557 refuses 1 25 1 1 3 1237 1725 27 16 96.301109 to5 1 25 1 1 4 1278 1718 28 23 95.944527 be5 1 25 1 1 5 1319 1724 23 16 88.517258 at5 1 25 1 1 6 1353 1718 40 22 88.517258 thes 1 25 1 1 7 1408 1724 80 22 96.730240 mercy5 1 25 1 1 8 1501 1716 25 22 96.667778 of5 1 25 1 1 9 1538 1714 88 23 91.488098 OPEC!5 1 25 1 1 10 1650 1713 51 25 80.744110 So,|5 1 25 1 1 11 1716 1711 113 24 96.424286 searched5 1 25 1 1 12 1842 1711 40 22 96.882401 for5 1 25 1 1 13 1894 1710 39 22 96.522995 thes 1 25 1 1 14 1948 1709 54 23 96.842171 best5 1 25 1 1 15 2015 1708 107 30 96.773758 products 1 25 1 1 16 2136 1707 3 22 42.239128 |5 1 25 1 1 17 2152 1706 68 23 91.905029 could5 1 25 1 1 18 2234 1706 44 22 96.730721 finds 1 25 1 1 19 2292 1711 25 16 83.432175 to5 1 25 1 1 20 2331 1712 51 15 96.591019 saves 1 25 1 1 21 2395 1711 88 22 96.621529 money4 1 25 1 2 0 1124 1742 1355 48 -1 5 1 25 1 2 1 1124 1768 31 15 95.926567 on5 1 25 1 2 2 1169 1760 46 23 95.926567 fuels 1 25 1 2 3 1229 1760 39 23 96.480873 for5 1 25 1 2 4 1281 1767 35 22 93.214661 my5 1 25 1 2 5 1327 1758 155 32 92.168098 gas-guzzling5 1 25 1 2 6 1494 1757 57 23 96.511276 SUV.5 1 25 1 2 7 1572 1756 3 23 87.385292 |5 1 25 1 2 8 1589 1756 96 22 96.422203 wanted5 1 25 1 2 9 1699 1753 134 29 96.884987 something5 1 25 1 2 10 1847 1752 3 23 61.704277 |5 1 25 1 2 11 1864 1751 71 23 94.583977 could5 1 25 1 2 12 1950 1750 72 23 42.807129 installs 1 25 1 2 13 2037 1742 90 37 87.631409 myself,5 1 25 1 2 14 2137 1748 100 22 96.839035 without5 1 25 1 2 15 2249 1747 70 25 91.947533 tools,5 1 25 1 2 16 2339 1747 49 22 96.518608 that5 1 25 1 2 17 2399 1745 80 22 96.578110 would4 1 25 1 3 0 1124 1787 1337 45 -1 5 1 25 1 3 1 1124 1802 50 23 92.327942 also5 1 25 1 3 2 1187 1807 131 25 95.941132 guarantees 1 25 1 3 3 1331 1807 24 17 96.591003 to5 1 25 1 3 4 1369 1800 77 23 96.855736 boosts 1 25 1 3 5 1458 1801 82 28 96.572876 engines 1 25 1 3 6 1553 1797 176 31 96.486053 performance.5 1 25 1 3 7 1745 1795 49 22 96.805855 Thes 1 25 1 3 8 1806 1794 77 30 96.968178 Super5 1 25 1 3 9 1896 1791 124 24 58.819256 FuelMAX5 1 25 1 3 10 2034 1798 70 16 96.064888 came5 1 25 1 3 11 2117 1790 100 29 96.189125 through5 1 25 1 3 12 2230 1790 54 21 96.878387 with5 1 25 1 3 13 2297 1788 65 30 96.709366 flying5 1 25 1 3 14 2374 1787 87 23 96.709366 colors.4 1 25 1 4 0 1125 1827 1337 47 -1 5 1 25 1 4 1 1125 1844 17 23 91.960892 It5 1 25 1 4 2 1154 1844 90 30 96.263092 clamps5 1 25 1 4 3 1258 1849 60 17 96.093910 onto5 1 25 1 4 4 1332 1850 35 22 96.930145 my5 1 25 1 4 5 1378 1842 47 23 96.200447 fuels 1 25 1 4 6 1439 1842 52 24 88.747414 line,5 1 25 1 4 7 1507 1841 37 22 92.723145 ands 1 25 1 4 8 1558 1846 49 17 96.203362 two5 1 25 1 4 9 1620 1837 115 32 95.590469 powerful5 1 25 1 4 10 1750 1836 152 30 96.630882 neodymium5 1 25 1 4 11 1916 1834 153 23 96.188568 conductors5 1 25 1 4 12 2083 1839 43 16 95.864723 uses 1 25 1 4 13 2140 1832 38 22 95.864723 thes 1 25 1 4 14 2192 1830 110 24 96.952911 scientific5 1 25 1 4 15 2314 1828 107 31 96.889824 principals 1 25 1 4 16 2434 1827 28 23 96.975174 of4 1 25 1 5 0 1125 1869 1352 47 -1 5 1 25 1 5 1 1125 1886 119 30 96.102859 magnetic5 1 25 1 5 2 1258 1891 132 17 96.726051 resonance5 1 25 1 5 3 1404 1890 25 17 94.917221 to5 1 25 1 5 4 1442 1884 51 30 95.868492 gives 1 25 1 5 5 1505 1890 37 15 95.868492 me5 1 25 1 5 6 1556 1881 80 23 96.359001 better5 1 25 1 5 7 1649 1880 45 23 96.726570 fuels 1 25 1 5 8 1708 1879 66 23 94.204346 burn.5 1 25 1 5 9 1789 1879 20 21 96.425255 A5 1 25 1 5 10 1822 1876 108 24 95.951248 certified5 1 25 1 5 11 1945 1875 49 23 96.313873 EPA5 1 25 1 5 12 2008 1875 143 29 51.735973 laboratory5 1 25 1 5 13 2162 1878 96 25 96.903206 reports5 1 25 1 5 14 2271 1879 26 15 96.890419 an5 1 25 1 5 15 2311 1877 101 23 96.787399 amazing5 1 25 1 5 16 2424 1869 53 23 96.403687 27%4 1 25 1 6 0 1125 1911 1332 45 -1 5 1 25 1 6 1 1125 1929 20 22 93.280090 in5 1 25 1 6 2 1159 1927 126 24 93.280090 increased5 1 25 1 6 3 1298 1926 96 30 92.263329 mileage5 1 25 1 6 4 1407 1925 46 24 96.391083 ands 1 25 1 6 5 1466 1924 54 24 96.391083 42%5 1 25 1 6 6 1532 1924 125 23 96.780281 reductions 1 25 1 6 7 1671 1924 19 20 96.350151 in5 1 25 1 6 8 1705 1920 96 24 88.806015 harmful5 1 25 1 6 9 1815 1919 137 31 95.075081 pollutants.5 1 25 1 6 10 1972 1917 67 23 96.185951 Since5 1 25 1 6 11 2053 1916 41 23 96.451118 thes 1 25 1 6 12 2109 1915 74 30 93.283852 Super5 1 25 1 6 13 2197 1913 119 24 88.237671 FuelMAX5 1 25 1 6 14 2330 1920 16 15 95.300255 is5 1 25 1 6 15 2360 1911 56 24 95.965294 used5 1 25 1 6 16 2429 1912 28 29 96.611954 by4 1 25 1 7 0 1125 1953 1343 47 -1 5 1 25 1 7 1 1125 1969 110 31 88.033195 trucking5 1 25 1 7 2 1245 1969 71 23 94.789536 fleets5 1 25 1 7 3 1328 1968 43 24 96.374367 ands 1 25 1 7 4 1384 1968 191 29 96.374367 transportation5 1 25 1 7 5 1590 1965 167 30 96.555779 departments5 1 25 1 7 6 1769 1961 91 24 96.084389 around5 1 25 1 7 7 1875 1961 40 22 93.158783 thes 1 25 1 7 8 1928 1959 84 25 87.487183 warld,5 1 25 1 7 9 2022 1957 35 24 93.419266 it's5 1 25 1 7 10 2071 1957 92 30 96.575714 exactly5 1 25 1 7 11 2175 1956 63 23 96.775223 what5 1 25 1 7 12 2251 1956 4 22 93.359299 |5 1 25 1 7 13 2269 1955 60 23 96.735413 needs 1 25 1 7 14 2342 1960 25 17 96.735413 to5 1 25 1 7 15 2381 1953 87 23 96.445946 reduce4 1 25 1 8 0 1125 1996 1271 46 -1 5 1 25 1 8 1 1125 2019 37 23 96.513504 my5 1 25 1 8 2 1174 2011 46 24 96.566063 fuels 1 25 1 8 3 1235 2017 66 17 96.536835 costs5 1 25 1 8 4 1315 2010 70 30 96.805824 today5 1 25 1 8 5 1396 2009 106 23 96.898781 without5 1 25 1 8 6 1513 2008 119 30 96.756546 worrying5 1 25 1 8 7 1643 2006 76 23 96.935005 about5 1 25 1 8 8 1731 2005 54 23 97.002213 how5 1 25 1 8 9 1798 2003 50 31 96.851318 high5 1 25 1 8 10 1862 2001 75 31 92.353638 they'll5 1 25 1 8 11 1952 2002 61 22 96.777229 raises 1 25 1 8 12 2026 2000 29 23 96.712120 oils 1 25 1 8 13 2070 2001 79 29 93.574280 prices5 1 25 1 8 14 2162 2000 19 21 93.574280 in5 1 25 1 8 15 2195 1998 40 23 96.468979 thes 1 25 1 8 16 2248 1997 85 23 96.583191 Middle5 1 25 1 8 17 2346 1996 50 23 95.615288 East4 1 25 1 9 0 1126 2042 1112 41 -1 5 1 25 1 9 1 1126 2060 145 17 95.960495 tomorrow.5 1 25 1 9 2 1286 2052 42 31 96.861000 Try5 1 25 1 9 3 1341 2055 15 20 96.514511 it5 1 25 1 9 4 1368 2052 38 23 96.514511 for5 1 25 1 9 5 1418 2051 32 23 93.257072 605 1 25 1 9 6 1463 2050 104 31 91.122581 days—if5 1 25 1 9 7 1578 2051 15 21 96.803627 it5 1 25 1 9 8 1606 2047 96 25 81.452599 doesn’t5 1 25 1 9 9 1713 2047 68 22 96.578102 works 1 25 1 9 10 1792 2046 38 22 96.977371 for5 1 25 1 9 11 1841 2052 55 23 96.631989 you,5 1 25 1 9 12 1905 2043 57 24 95.616188 we'll5 1 25 1 9 13 1977 2042 85 23 96.334038 refunds 1 25 1 9 14 2075 2049 63 23 96.495651 yours 1 25 1 9 15 2150 2048 88 22 84.275558 money.2 1 26 0 0 0 1124 2098 489 36 -1 3 1 26 1 0 0 1124 2098 489 36 -1 4 1 26 1 1 0 1124 2098 489 36 -1 5 1 26 1 1 1 1124 2103 97 25 85.003601 TG2245 1 26 1 1 2 1232 2115 11 5 60.581928 -5 1 26 1 1 3 1254 2103 83 31 92.980370 Super5 1 26 1 1 4 1347 2101 134 26 80.049110 FuelMAX?5 1 26 1 1 5 1493 2113 9 4 92.208344 -5 1 26 1 1 6 1514 2098 99 30 96.185471 $49.952 1 27 0 0 0 1048 2179 1457 24 -1 3 1 27 1 0 0 1048 2179 1457 24 -1 4 1 27 1 1 0 1048 2179 1457 24 -1 5 1 27 1 1 1 1048 2179 1457 24 95.000000 2 1 28 0 0 0 1214 2186 1300 809 -1 3 1 28 1 0 0 1214 2186 1300 809 -1 4 1 28 1 1 0 1214 2186 1300 809 -1 5 1 28 1 1 1 1214 2186 1300 809 95.000000 2 1 29 0 0 0 1359 2912 341 64 -1 3 1 29 1 0 0 1359 2912 341 64 -1 4 1 29 1 1 0 1359 2912 341 64 -1 5 1 29 1 1 1 1359 2935 90 25 78.120232 Visits 1 29 1 1 2 1459 2940 71 19 94.382462 ours 1 29 1 1 3 1539 2912 161 64 96.701248 website EXHIBIT C_ “e+ Gadget Universe 1-800 478-4703 Sa oS oe Page loft TG 224 . . _ Also Avaitobe:

Super Fuel Max i, $ 49.95 - Fight the War Against Rising Gas ;

Prices-Reduce Your Fuel Costs by An f Amazing. 27% with Super...

-FuelMAX®, and Keep the Air. ~ a Cleaner At the Same Time . . a Mini! LT refuse ta be at the mercy of OPECL So, I searched for the = $249.95 best product I could find to save moriey.on fuel'for my gas- : guzzling SUV. I wanted something I could install myself, , without tools, that would alsa guarantee to boost engine performance. The Super. FuelMAX came through with fiying colors. It clamps onto. my. fuel line, and two powerful eodymium conductors use the scientific principal of magnetic nance ta give me better fuel burn. A certified EPA laboratory. reports an amazing 27% in Increased mileage and 42% reduction in harmfut pollutants. Since the Super FuelMAX Is used by. trucking fleets and transportation departments __ ais around the world, it's exactly what I need to reduce my fuel emai 7 TT! ‘Gack 5 1 7 1 1 5 1050 1400 17 45 32.029823 costs today without worrying about how high they'll raise off - ; ‘ty say shopplag tat B Prices. in the Middle East tomorrow. Try. it for 60 days-if it . doesn’t work for you, we'll refund your money. i E Park Ri- Toys | __.__itsNew Yearst. Quantity ° . __ Health / Fitness | ® in Stock Now In stock? [veo] fy . ‘os Sods » item In Auction You have no Items ‘in your cart Subscribe ta Gadget Alert! E-mail:

Add GU to your Favorites Copyright 2000 Gadget Universe _ ‘ GisecureSever via Verisign “attp://www.gadgetuniverse.com/cgi-bin/sgin0 101.exe?T 1=TG+224&UID=2001022006595244 ~~ 9790/2001 VOLUME 132 Decision and Order DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act; and The respondents, their attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the draft complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, or that the facts as alleged in such complaint, other than jurisdictional facts, are true, and waivers and other provisions as required by the Commission’s Rules; and The Commission having considered the matter and having determined that it had reason to believe that the respondents have violated the said Act, and that a complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of thirty (30) days, now in further conformity with the procedure prescribed in § 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order: 1a. Respondent Esrim Ve Sheva Holding Corp. is a New York corporation with its principal office or place of business at 9408 Owensmouth Ave., Chatsworth, California 91311. 1b. Respondent Alexander Elnekaveh is an officer of the corporate respondent. Individually or in concert with others he formulates, directs, or controls the policies, acts, or practices of VOLUME 132 Decision and Order the corporation, including the acts or practices alleged in this complaint. His principal office or place of business is the same as that of Esrim Ve Sheva Holding Corp.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

ORDER DEFINITIONS For purposes of this order, the following definitions shall apply:

1. “Competent and reliable scientific evidence” shall mean tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that have been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results. 2. Unless otherwise specified, “respondents” shall mean Esrim Ve Sheva Holding Corporation, sometimes doing business as Gadget Universe, its successors and assigns and its officers; Alexander Elnekaveh, individually and as an officer of the corporation; and each of the above’s agents, representatives, and employees.

3. “Commerce” shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44.

I.

IT IS ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any fuel-line magnet, or any purported fuel-saving or emissions-reducing product for use in VOLUME 132 Decision and Order conjunction with a motor vehicle, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication A. about the effect of such product on fuel molecules; B. that such product improves fuel burn; C. that such product reduces fuel consumption; D. that such product reduces fuel consumption by any number, percentage, or rate;

E. that such product reduces emissions or pollutants; F. that such product reduces emissions or pollutants by any number, percentage, or rate; or G. about the benefits, performance, or efficacy of such product;

unless, at the time of making such representation, respondents possess and rely upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation. II.

IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any product in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, that any user testimonial or endorsement of the product reflects the actual and current opinions, findings, beliefs, or experiences of the user. VOLUME 132 Decision and Order III.

IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any product in or affecting commerce, shall not represent, in any manner, expressly or by implication, that the experience represented by any user testimonial or endorsement of the product represents the typical or ordinary experience of members of the public who use the product, unless:

A. The representation is true and, at the time it is made, respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation; or B. Respondents disclose, clearly and prominently, and in close proximity to the endorsement or testimonial, either: 1. what the generally expected results would be for users of the product, or 2. the limited applicability of the endorser's experience to what consumers may generally expect to achieve, that is, that consumers should not expect to experience similar results.

For purposes of this Part, "endorsement" shall mean as defined in 16 C.F.R. § 255.0(b).

IV.

IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any product in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, the existence, contents, validity, VOLUME 132 Decision and Order results, conclusions, or interpretations of any test, study, or research.

V.

IT IS FURTHER ORDERED that respondent Esrim Ve Sheva Holding Corp., and its successors and assigns, and respondent Alexander Elnekaveh shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Federal Trade Commission for inspection and copying: A. All advertisements and promotional materials containing the representation;

B. All materials that were relied upon in disseminating the representation; and C. All tests, reports, studies, surveys, demonstrations, or other evidence in their possession or control that contradict, qualify, or call into question the representation, or the basis relied upon for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations. VI.

IT IS FURTHER ORDERED that respondent Esrim Ve Sheva Holding Corp., and its successors and assigns, and respondent Alexander Elnekaveh shall deliver a copy of this order to all current and future principals, officers, directors and managers, and to all current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of the order. Respondents shall deliver this order to current personnel within thirty (30) days after the date of service of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities. Respondents shall retain the signed, dated VOLUME 132 Decision and Order statements acknowledging receipt of the order for a period of five years and upon request make them available to the Federal Trade Commission for inspection and copying. VII.

IT IS FURTHER ORDERED that respondent Esrim Ve Sheva Holding Corp., and its successors and assigns, shall notify the Commission at least thirty (30) days prior to any change in the corporation that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in the corporation about which respondent learns less than thirty (30) days prior to the date such action is to take place, respondent shall notify the Commission as soon as is practicable after obtaining such knowledge. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.

VIII.

IT IS FURTHER ORDERED that respondent Alexander Elnekaveh, for a period of five (5) years after the date of issuance of this order, shall notify the Commission of the discontinuance of his current business or employment, or of his affiliation with any new business or employment. The notice shall include respondent’s new business address and telephone number and a description of the nature of the business or employment and his duties and responsibilities. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.

VOLUME 132 Decision and Order IX.

IT IS FURTHER ORDERED that respondent Esrim Ve Sheva Holding Corp., and its successors and assigns, and respondent Alexander Elnekaveh shall, within sixty (60) days after the date of service of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this order.

X.

This order will terminate on December 17, 2021, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of: A. Any Part in this order that terminates in less than twenty (20) years;

B. This order's application to any respondent that is not named as a defendant in such complaint; and C. This order if such complaint is filed after the order has terminated pursuant to this Part.

Provided, further, that if such complaint is dismissed or a federal court rules that the respondents did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal. By the Commission.

VOLUME 132 Analysis Analysis of Proposed Consent Order to Aid Public Comment The Federal Trade Commission has accepted, subject to final approval, an agreement for entry of a consent order from Esrim Ve Sheva Holding Corp., a corporation sometimes doing business as Gadget Universe, and its CEO, Alexander Elnekaveh, individually and as an officer of the corporation (referred to collectively as "respondents"). The agreement would settle a complaint by the Federal Trade Commission that respondents engaged in deceptive acts or practices in violation of Section 5(a) of the Federal Trade Commission Act.

The proposed consent order has been placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the Commission will again review the agreement and the comments received and will decide whether it should withdraw from the agreement or make final the agreement's proposed order.

This matter concerns advertising representations made about Super FuelMAX, an automotive fuel-line magnet. The administrative complaint alleges that respondents violated the FTC Act by disseminating advertisements that made unsubstantiated performance claims about Super FuelMAX. The Complaint alleges that respondents represented that Super FuelMAX: (1) causes fuel molecules to line up in straight columns and rows; (2) improves fuel burn through magnetic resonance; (3) reduces fuel consumption; (4) reduces fuel consumption by 27% or up to 27%; (5) reduces harmful emissions or pollutants; and (6) reduces harmful emissions or pollutants by 42% or up to 40%. The Complaint further alleges that respondents represented that they had a reasonable basis for making these claims, but in fact did not possess competent evidence supporting them. Additionally, the Complaint challenges, as false, claims that tests performed at a certified U.S. Environmental Protection Agency prove that: (a) increases mileage by 27%; and (b) reduces harmful pollutants by 42%. VOLUME 132 Analysis The Complaint also alleges that respondents falsely represented that a testimonial from respondent Alexander Elnekaveh reflected: (a) Elnekaveh’s actual findings and experience with the product; and (b) the typical or ordinary experience of members of the public who use the product.

The proposed consent order contains provisions designed to prevent respondents from engaging in similar acts and practices in the future. Part I of the proposed consent order prohibits respondents from making unsubstantiated claims in connection with any fuel-line magnet or any purported fuel-saving or emission-reducing product for use with a motor vehicle, including claims about the effect of such product on fuel molecules and that such product improves fuel burn; reduces fuel consumption or reduces fuel consumption by any number, percentage, or rate; reduces emissions or pollutants or reduces emissions or pollutants by any number, percentage, or rate; or about the benefits, performance, or efficacy of such product. The evidence required to substantiate such claims must be competent and reliable evidence, which, when appropriate, must be competent and reliable scientific evidence.

Part II of the proposed consent order prohibits respondents from misrepresenting that any user testimonial or endorsement of the product reflects the actual and current opinions, findings, beliefs, or experiences of the user.

Part III of the proposed consent order prohibits respondents from representing that the experience represented by any user testimonial or endorsement of the product represents the typical or ordinary experience of members of the public who use the product, unless the representation is true and, at the time it is made, respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation; or respondents disclose what the generally expected results would be for users of the product, or that consumers should not expect to experience similar results.

VOLUME 132 Analysis Part IV of the proposed consent order prohibits respondents from misrepresenting the existence, contents, validity, results, conclusions, or interpretations of any test, study, or research. The remainder of the proposed consent order also contains provisions regarding record-keeping, distribution of the order, notification of changes in corporate status, notification of changes in employment of the individual respondent, the filing of a compliance report, and termination of the order. The purpose of this analysis is to facilitate public comment on the proposed order, and it is not intended to constitute an official interpretation of the agreement and the proposed order or to modify their terms in any way.