May 4, 2004 — -- As obesity threatens to become the nation's No. 1 root cause of preventable death, and diet crazes have Americans counting calories off of labels, are some food manufacturers misleading consumers in ways that may cause them to pack on extra pounds?
Even as U.S. health officials are asking restaurants and packagers to voluntarily clarify their food's fat, calorie and portion-size labels, they are accusing other companies of breaking existing rules.
For example, as officials laid out their new policy recently, a doughnut entrepreneur sat in jail over dubious "low-fat" labels. And in a case that reminded some of a plot from the sitcom Seinfeld, a New York frozen dessert chain was being accused of false claims about fat and calories.
"Whenever I pick up things that I'm not familiar with, or if I have questions about them, I look at the label," says Stuart Fullerton, a Chicago-based federal prosecutor who helped put the doughnut fraudster in jail. "That's why we have the label. It is near and dear to everyone's heart. We all do it, and we all rely on the truthfulness of what is on those labels."
Though critics say food labels and printed claims generally are truthful, the doughnut and frozen dessert accusations are among the latest in a long line of cases where certain food producers — including some of America's biggest food companies — have been accused of violating federal rules that define label or advertising claims such as "low calorie," "reduced fat," and "lean."
In the past decade, the Federal Trade Commission publicly challenged such familiar brands as Pizzeria Uno restaurants, Promise margarine, Mrs. Fields cookies, Eskimo Pie ice cream, and the advertising agencies for Dannon yogurt and Häagen Dazs frozen yogurt, for allegedly false claims on fat, calories, sugar or cholesterol in advertisements. The companies generally did not admit liability but agreed to change their ads.
Federal agencies aren't the only forum for complaints. Recently, a snack food company faced customer lawsuits after a published analysis claimed it misstated fat and calorie content.
In an ongoing case, the New York City Department of Consumer Affairs is negotiating with the owners of eight CremaLita frozen dessert stores after alleging "deceptive and misleading trade practices."
Despite CremaLita's advertising claims, the city said in December that federal Food and Drug Administration lab tests showed the desserts are not really ice cream, "not 'low calorie' or 'fat free,' and certain flavors of its product are not 'cholesterol free' or 'low fat.'"
New York's media outlets have cited similarities to a Seinfeld episode, in which characters gain weight after eating "fat free" frozen yogurt that gets exposed in a city crackdown.
CremaLita says the original charges were overstated.
"There were serious errors in the FDA methodology leading to a substantial overstatement of CremaLita's calorie count, fat content and other nutritional information on which the New York City Department of Consumer Affairs based its original charges — a statement we believe they would agree with," CremaLita President Allison Britz said in an e-mailed statement.
The New York agency says it also is investigating a second frozen dessert chain, though it has not yet made any formal accusations.
In real life, alleged false claims often bring a fine or an order to stop food mislabeling. But the head of a group calling for tougher and more thorough enforcement of food-labeling fraud says it's no laughing matter when label liars can get off lightly.
"A company can fatten its profits considerably by cheating people," says Michael F. Jacobson, executive director of Center for Science in the Public Interest in Washington, D.C. "I can't tell you how many complaints we file with the FDA, and their perennial complaint is we don't have the staff to go after these people — and the FTC is the same."
Jacobson says it is not easy to spot label distortions.
"You have to be a lawyer or a scientist," Jacobson says. "You really have to read labels very closely, and the average person has a lot of other things on his or her mind."
He says misleading labels don't always involve blatant violations of fat or calorie levels, which can be strictly defined by the FDA. His organization's Web site gives examples of brand-name products it says claim to be "natural" — a term that is not regulated — but contain artificial ingredients, or imply one type of ingredient, but contain cheaper, often less-healthy substitutes.
For example, according to Jacobson, a popular type of peach oatmeal actually contains "dehydrated apple bits," not peaches, and a popular brand of "blueberry" waffles contain coloring, but no blueberries.
"There's an old country music song called, the big print giveth and the small print taketh away, and that's what a lot of these deceptions are," he says.
At least two doughnut vendors have paid with jail time for their deceptions.
Robert Ligon, 69, who ran a Paducah, Ky.-based company that used multiple names, pleaded guilty to mail fraud for allegedly shipping "low-fat" doughnuts to health food stores nationwide. He was sentenced to 15 months in federal prison, starting in January of this year.
Fullerton, the assistant U.S. attorney for the Northern District of Illinois who prosecuted the case, says Ligon committed "a betrayal of trust." Fullerton adds that Ligon bought conventional doughnuts and pastries from Cloverhill Pastry-Vend Inc., a Chicago baking company, for 25 to 33 cents, re-labeled them as a premium health food product, and sold them for $1 each.
"This is all fine, except that Ligon's labels — the labels that he had people put on them — were false," Fullerton says. "They dramatically understated the calories and the fat content of these doughnuts."
Rudolph Hejny, a Chicago case agent for the FDA, which has looked at Ligon's activities as far back as 1995, says an FDA raid on Ligon's storage facility netted 18,720 doughnuts and thousands of cinnamon rolls. One example, billed as a "carob coated" doughnut with three grams of fat and 135 calories, actually was a chocolate doughnut that contained 18 grams of fat and 530 calories.
In order to qualify as "low-fat" under federal guidelines, a product must have less than three grams of fat per serving. Doughnuts, which tend to be fried in fat, rarely qualify.
Ligon is not the only person in the Chicago area who ran a doughnut-dupe scheme.
In September 2000, Vernon L. Patterson, then 43, president of Genesis II Foods Inc. of Chicago, pleaded guilty to misbranding food products, mail fraud, and unlawful monetary transactions for repackaging and reselling irregular or day-old pastries purchased from Cloverhill.
Officials stress Cloverhill simply sells packaged pastries, and was not in any way complicit with either Ligon or Patterson. But the bakery is among several details of the two cases that appear virtually identical — also including reduced fat and calorie claims for ersatz "carob coated" doughnuts and other pastries, officials say.
Authorities say around 1994 they received numerous complaints from distributors, dieticians, health food stories and consumers about alleged misrepresentation involving Patterson's products.
"One woman in Georgia feared for the health of her husband, who liked the 'skinny' [Patterson] products, but who also had diabetes," according to an article about the Patterson case on the FDA's Web site. "Another woman in Mississippi piled on the pounds during the six months that she ate $500 worth of allegedly skinny products. Similar complaints continued to filter in from all over the country, and many were accompanied by product samples."
The case struck a chord among dieters and others in the U.S. attorney's office in Chicago.
"Everybody in the office was outraged," says Madeleine Murphy, the assistant U.S. attorney on the case. "I've had offenders that have committed crimes that were far more serious to the public health … but there's something unique about this case."
A judge sentenced Patterson to a year and a day in jail, followed by three years of supervised release, and ordered him to pay a total of $3,925 in restitution to people who could document being defrauded. Patterson began serving his term in March 2001.
The prison sentences for the doughnut scammers came as Americans generally are growing fatter, and ailments stemming from obesity and lack of exercise are threatening to overtake those from smoking as America's No. 1 preventable cause of death, according to a government study.
"Far too many Americans are literally eating themselves to death," Health and Human Services Secretary Tommy Thompson said March 12 at a news conference where the government sought "voluntary compliance" by restaurants to list the calorie content of dishes on their menus, and by food packagers to clarify total calories and serving sizes on labels.
Existing laws require food packagers to list calories per serving, as well as fat, cholesterol, sodium, carbohydrates, sugar, fiber and protein content. But officials say some manufacturers claim there are multiple servings in packages that consumers might perceive to be a single serving. Such labeling can lead to lower totals for fat and calories, and require consumers to multiply by the number of servings to get the full total.