January 25, 2008

Attorney General Corbett moves to freeze assets of the owner of Pure Weight Loss chain following filing of consumer protection lawsuit

HARRISBURG - The Attorney General's Health Care Section has requested that Commonwealth Court freeze the assets of Pure Weight Loss Centers, based in Horsham, Montgomery County, along with company President and owner Vahan Karian.

Attorney General Tom Corbett said today's application for preliminary injunctive relief follows the filing of a consumer protection lawsuit against the weight loss chain and Mr. Karian on Thursday, Jan. 24, 2008.  That lawsuit accused the company and Karian of unfair trade practices and deceptive acts in the marketing and sale of pre-paid contracts for weight loss products and services.

According to the court filing, Mr. Karian is accused of misappropriated consumer funds from Pure Weight Loss for his own benefit and diverted funds to other business entities. 

Karian is also accused of personally directing Pure Weight Loss to continue advertising special promotions on products and services, as well as continuing to accepting prepayment from consumers for products and services, even after issuing a statement that that all branch offices of the business would be closed on January 4, 2008.

Additionally, Corbett said that prior to, and after, the announced closing of Pure Weight Loss in January 2008, Mr. Karian allegedly created liens on company inventory, equipment and accounts in an effort to place himself ahead of consumer claims against the company.

Corbett said the application for preliminary injunction and asset freeze asks the court to preserve all funds which could be used to provide refunds to consumers for prepaid products and services they never received, including any assets that may have been wrongfully diverted from Pure Weight Loss.

The application also seeks a full accounting of assets and requests that the court prevent Mr. Karian from selling, transferring, concealing, withdrawing or taking other action involving any funds, personal property or other assets which may have been generated as the result of violations of Pennsylvania's Consumer Protection Law.

A hearing on the request will be scheduled before Commonwealth Court in Harrisburg.

Corbett noted that the Attorney General's Health Care Section has received more than 1,000 complaints from consumers across the country who prepaid for weight loss products and services they have not received.  Consumer payments ranged from several hundred to several thousand dollars, and consumer claims currently total nearly $500,000.

Pure Weight Loss operated more than 400 locations across the United States, including 47 stores in Pennsylvania.  

Corbett encouraged consumers who prepaid for Pure Weight Loss products or services that they have not received to call the Attorney General's Health Care Section Hotline at 1-877-888-4877 or file an online complaint using the Attorney General's website. 

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