Deep Dive
Shownotes Transcript
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Jeez, I can't even take a break without the whole world falling apart. Hello, is everybody okay out there? I hope so. Shit is getting pretty weird, right?
Anyway, I thought we could throw you a bone during this strange time by re-recording and releasing an old Patreon bonus episode for everybody to hear while you are waiting for Season 4. It's called The Boner King, and it was originally released exclusively on Patreon in March 2019. So, some of you already know this story, but for those of you who do not, this is the case about the male enhancement supplement, Insight, and those annoying Smiling Bob commercials. This is Bob.
Remember those? I don't know if you've noticed, but recently these kinds of products have been res-erected. It's pretty good, right? Anyway, if you need something to pass the time while social distancing, see if you can keep count of the number of penis puns that I included in the script you're about to hear. It's fun for the whole family. One more thing, if you find yourself unsatisfied when this episode finishes and rolls over and falls asleep, there are plenty more waiting for you at patreon.com slash swindled.
Go listen to the one about Martha Stewart and insider trading, which is very relevant at the moment. Or go check out the one about the acid attack. Or the new one where the guy makes his son shoot him in the leg for insurance money. Or perhaps the one about the weird lady who steals tens and thousands of dollars from a little girl battling cancer. It's easy listening. And it's all commercial free. But wait, there is more.
By becoming a valued listener at patreon.com/swindled, you'll also gain access to the brand new companion show called Valuable News for Valued Listeners. It's a news-style show where I provide updates on past episodes as well as answer listener questions and more fun stuff like that. The first edition is available now. Go sign up: patreon.com/swindled. And yes, season 4 is right around the corner. We will be posting a teaser on social media soon.
Follow us at Swindled Podcast on everything. Thanks for your patience. Oh, and obviously this episode contains sexual content, so listener discretion is advised. Stay inside. Enjoy.
They bribed government officials, cleared violations of federal and state law, paid a plague of taxpayer dollars that were wasted, paid tens of millions of dollars, or a billion dollars, by falsifying its books and records, responsible for the collapse of the entire system, and in control of some kind of sling, is that right?
A former marketing professional named Steve Warshak came up with the idea for Insight in 1999 when he noticed advertisements for similar natural male enhancement products popping up in every men's magazine that he opened. Health products were never a passion of Steve Warshak's. In fact, his last gig was selling the commercial space that lined the wall of his local hockey rink. But Steve Warshak knew he finally had his hands on a good idea.
Warshak had stumbled upon an opening in a potentially huge market. So, Steve Warshak decided to fill it. In 2001, along with four friends and relatives, including his mother, Steve Warshak launched Berkeley Premium Nutraceuticals in the basement of his home in Cincinnati. The company offered a variety of herbal products that claimed to aid weight loss, sleep, heart health, and more.
but insight was immediately and forever its best seller by a thick margin insight consisted of herbs minerals and vitamins such as horny goat weed ginseng and zinc and it promised to work miracles on its male users struggling penises increased length and girth expanded tissue mass and quote firmer fuller filling better quality erections the money almost prints itself
Viagra, which had hit the streets and the sheets a year earlier, was proof of that. The little blue pill was flying off of shelves all across the country. Yet it was almost impossible to find anyone that had tried it. If men were too embarrassed to talk about it with their friends, how many men were too embarrassed to see a doctor for a prescription in the first place? That's the question that Steve Warshak considered his money shot. And he wasn't the first one to take a stab at it.
Plenty of competing natural male enhancement supplements already existed in the marketplace that provided stiff competition. Many of those products even contained the exact same ingredients as Enzyte, which meant that unlike Viagra, a customer did not need a doctor's prescription to buy them. Customers could order their supply from the non-judgmental comfort of their own homes. Even better, most herbal alternatives, including Enzyte, were much cheaper than Viagra.
So why weren't these natural versions of Viagra as popular as their prescription counterpart? For one, most if not all of those supplements did not work as intended. The only reason natural male enhancement products were even legal to sell in the first place is because they were labeled as a dietary supplement, which allowed them to exist in the legal gray area in a largely unregulated industry. And the other reason the natural male enhancement industry had remained limp was because of the marketing.
It was crude and off-putting. Even Steve Warshak's first attempts followed in the footsteps of his competitors. One ad for Triniton, Berkeley Nutraceuticals' precursor to Enzyte, read, "...watch your lovers astonished to look as you shoot power-packed gobs of cum up to 13 feet away." Another product promised men that they would "...cum like a raging bull."
While another, Biogen14, claimed that you were one pill away from being, quote, harder than Chinese arithmetic. And we'll be right back. I need to make a phone call. Support for Swindled comes from Rocket Money.
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Steve Warshak recognized that in order for his products to be taken seriously, his marketing strategy needed to change. The current copy of Insight's advertisements read like a DM from a 14-year-old boy. Warshak realized that Berkeley Nutraceuticals needed to head in a new direction to sell more erections. Enter Smiling Bob.
This is Bob. Bob is doing well. Very well indeed. That's because not long ago, with just a quick phone call, Bob realized that he could have something better in his life. And what did he get? Why, a big boost of confidence, a little more self-esteem, and a very happy Mrs. at Home. Call or go online now to get a sample pack. Enzyte, the once-daily tablet for natural male enhancement.
Instead of advertising in the back pages of sticky magazines, with its new mascot, Insight could now advertise heavily on television stations like CNN and ESPN. Instead of targeting elderly men whose erectile dysfunctions were due to medical issues, Warshack would target healthy men, aged 30 to 50, who could use a little boost in confidence.
The series of Smiling Bob television ads, directed by a man appropriately named Randy Spear, featured an average middle-aged white guy who was apparently sporting more than just a permanent, exaggerated smile. Each commercial featured Bob participating in a common activity or situation in which he was completely unfazed by the present moment. Whether it was a round of golf or the drudgery of getting through airport security, Bob grinned his way through it, and he never spoke a word.
Because Bob's smile said it all. By 2004, Insights and Smiling Bob were inescapable. Berkeley Nutraceuticals had spent more than $125 million on television spots. The ads were clever, full of racy scenarios and double entendres that were obvious enough to make it awkward for families who were watching the big game together in their living rooms.
and they were effective enough to convince millions of people that InZyte would be just as capable as Viagra without the embarrassing visit to the doctor. Thanks to Smiling Bob, Steve Warshack's company had outgrown The Basement to become one of Cincinnati's largest companies, employing more than 1,400 people. Berkeley Premium Nutraceuticals was receiving up to 65,000 calls a day at its peak.
Its annual revenues had swollen to over $200 million a year as a result of over 2 million sales of its boner pills, but the success was short-lived. In the following months, Insight customers began to realize that they'd been given the shaft. Complaints about the efficacy of Insight came flooding in. In print ads, Insight promised an increase in penis size up to 3 inches over an 8-month period and a 24% increase in erection size.
claims that a representative from the American Urology Association referred to as medically impossible. Additionally, Orszag claims that Inzite had been developed by leading medical professionals over a 13-year period were also found to be untrue. The two men referenced in print ads for Inzite, Dr. Frederick Tompkins, a physician with a biology degree from Stanford, and Dr. Michael Moore, a leading urologist from Harvard, were discovered to not even exist.
Neither did Michael Johnson, another appropriately named man who customers were directed to contact when they called the company and the phones were ringing off the hook. Unsatisfied customers were also complaining about how hard it was to receive a refund from the company in order to receive their money back. Among other unnecessary hurdles, Berkeley Nutraceuticals required all customers to submit a notarized letter from their doctors that verified that their penises had not grown.
Again, most of the men who purchased Insight were embarrassed to see a doctor about their issue to begin with. Berkeley knew that the notarized letter would be a barrier too steep. Most of the unhappy customers would just cut their losses. But the losses kept piling up for those customers because the initial purchase of Insight included a free trial that automatically entered them into a continuity program.
Every month a new pack of Insight would arrive at their doorstep and their credit card would be charged unless the customer called Berkeley to cancel the service. It was basically Dollar Shave Club for dick pills. In response, many of those jilted customers initiated chargebacks with their credit card companies, which is a bad look for any legitimate company. Aware of this fact, Steve Warshak instructed his sales team to split the monthly charges into two or three separate transactions, thus lowering the company's chargeback ratio.
In an email to a colleague, Warshak described this subscription program as the "lifeblood" of the company, and he was ruthless in his approach. When a salesperson emailed to ask if it was okay to charge a credit card that contained a different name than the customer on the phone, Warshak wrote back, "I don't care if the card is taken from Grandma's purse so Junior can buy some insight. If the card is good, I want to ship."
Another unethical and illegal tactic employed by Warshak and Berkley Nutraceuticals was developed by Warshak's nephew, Jason Kossman. In a 2005 email to his uncle, Kossman suggested that they contact every customer that had cancelled and pretend to be a company contracted by a hospital to do health surveys when the customer reveals that they had used a product made by Berkley.
The surveyor would suggest a cheaper alternative, which Berkley also manufactured, but would never disclose that fact to the customer. Kossman wrote, The poor customer bites, thinking he's getting a deal even though he's actually getting taken by my company for the second time around. The scheme is beautiful. Dreamed it up after many a bong hit one night. These customers are fishing a barrel, man. You already spent the media dollars to get them in the barrel when you bought the inside spot. Don't let them get away so easily.
On February 25th, 2005, Steve Warshak forwarded that email from his nephew to five executives in the company, adding, quote,
Less than three weeks later, the Berkeley offices were raided by the FBI. Seven tons of evidence was seized, including computers, paper records, and bank accounts. Steve Warshak was charged with more than 90 counts of fraud, conspiracy to commit mail, wire, and bank fraud, and money laundering.
In 2008, Steve Warshak was convicted on 94 counts and sentenced to 25 years in prison, and Berkeley Nutraceuticals was forced to hand over more than $500 million in profits. He was blinded by his own arrogance and greed. That is the bottom line tonight from a federal judge who hit Steve Warshak with a 25-year prison sentence and a $500 million fine. Steve Warshak maintains his innocence.
blaming many of the company's shady practices on being overwhelmed by rapid growth. He says the requirement of the notarized letter is a lie, and he points to the fact that over 1 million people had successfully canceled the continuity service, proof that he wasn't out to rip anybody off. U.S. District Court Judge Arthur Spiegel did not buy it. During the sentencing hearing, Judge Spiegel offered, quote, "...Steven Warshak was blinded by his arrogance, greed, and his ability to exploit others."
Not only is Stephen Warshak corrupt, but he corrupted members of his own family and good people who worked for him. Steve's mother, Harriet Warshak, was found guilty of conspiracy to commit mail fraud, bank fraud, and money laundering. Harriet worked in the company's credit card department. She received a 24-month sentence but was never sent to prison due to a cancer diagnosis.
In addition, Berkeley's in-house counsel, another Berkeley employee, and the company's media firm were also found guilty of multiple counts. "Smiling Bob bumped up against the face of federal justice today in a case about greed. That's how Judge Arthur Spiegel puts it. He's giving Steve Warshak 30 days to get his affairs in order before heading for 20 plus years of federal prison."
In December 2008, as a result of bankruptcy, Berkeley Nutraceuticals assets were sold to an investment company owned by a real estate developer. So if you're in need, you can still buy Insight today. This was the perfect storm of consumer fraud. You had a group of consumers that wouldn't want to come forward and say that they've been ripped off. Managements all the time are making decisions that are bet-the-company decisions. He happened to bet on consumer fraud he didn't get away with it.
Swindled is written, researched, produced, and hosted by me, a concerned citizen, with original music by Trevor Howard. For more information about Swindled, you can visit swindledpodcast.com and follow us on Instagram, Facebook, and Twitter at Swindled Podcast. Or you can send us a postcard at P.O. Box 6044, Austin, Texas 78762. But please, no packages. We do not trust you.
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