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Microcap & Penny Stocks : Ives Health Co. - IVEH -- Ignore unavailable to you. Want to Upgrade?

To: peter michaelson who wrote (27)	4/6/2001 1:53:17 PM
From: peter michaelson	Read Replies (1) \| Respond to of 40

Ives Health President Arrested on HIV Fraud Charges (Update4) <http://media5.bloomberg.com:443/cgi-bin/getavfile.cgi?A=7977805> <http://media5.bloomberg.com:443/cgi-bin/getavfile.cgi?A=7977805> By David Evans Claremore, Oklahoma, April 5 (Bloomberg) -- Ives Health Co. founder and President Keith Ives was arrested yesterday on a federal wire fraud charge alleging that he and his company made false claims for a drug it sells to treat HIV, officials said. Ives, 43, and the company were also accused in the criminal complaint unsealed today in New York with conspiring to sell a drug not approved by the U.S. Food and Drug Administration. Bloomberg News reported last month that the World Health Organization denied Ives' claim that the agency supervised a study, called the Java Project, that Ives used to promote the drug. Robert Badeen, 52, the company's former vice president for research, also said Ives misrepresented the study that he conducted to validate the drug, called T-Factor. Ives says the drug is made from the thymus, pituitary, spleen and lymph glands of freshly slaughtered calves. It sells it on the Internet for $49 for a month's supply and sells a less potent version, Immune 2000, nationally in grocery and drug stores, including the Winn-Dixie chain. An annual supply of T-Factor sells for about $600, a fraction of the $25,000 estimated annual cost of conventional medications for people with the virus that causes AIDS. Creating Buzz Ives, like many low-priced stocks, attracted investor attention on Internet message boards during the recent bull market, only to later fizzle. While the company's stock never rose much above $2, the drug's buzz drew more than 17,000 messages on the Raging Bull investor board. The SEC halted trading in the stock for 10 days last month because of concerns about the company's claims. The shares closed today at 5 cents. Ives hired ex-stockbroker Wayne Schumacher to promote its stock in January, a week after he completed a one-year federal sentence for securities fraud. Federal regulators and health experts have challenged company claims that the drug halts the development of the HIV virus. Ives, through a receptionist at company headquarters in Claremore, Oklahoma, declined comment. Keith Ives was arrested in Claremore by FBI and FDA agents, said Marvin Smilon, spokesman for the U.S. Attorney for the Southern District of New York. Each of the charges carries a maximum penalty of five years in prison and a fine of $250,000. Badeen's Claims In his interview, Badeen said that Ives Health, a nutritional supplement maker, knew the T-Factor study was incomplete and yet used the study to promote the drug as a ``breakthrough'' alternative to more expensive FDA-approved treatments. The criminal complaint, referring to the Bloomberg interview, quotes Badeen saying he was ``horrified'' over the claims. ``If people quit taking their (conventional) medication, this could kill people,'' Badeen said. In the interview, Badeen said he has also used the names Slayton-Bedeen and Slayton-Badeen. While Badeen said he resigned from Ives, the company said he was fired when it discovered he was using aliases. The researcher admitted he had falsely claimed to hold a doctorate from Case Western Reserve in Cleveland and a master's degree from the University of Oklahoma. He also said he'd used a false social security number. `High Confidence' In a March 5 interview, Keith Ives defended T-factor. ``We have a very, very high confidence that it's going to render the medicinal benefit that we're claiming,'' he said. He acknowledged the only study supporting those claims was Badeen's. ''There's no way I can substantiate or validate any of that, and they know that,'' Badeen said in his interview. He said he can't recall the names of the two doctors who actually conducted the Java Project, or the name of their clinic. The complaint also said Procter & Gamble Co. denied providing $250,000 to fund Badeen's study, as earlier reported by Bloomberg.