Australian Con Man (Peter Foster) Caught Again
Stephen Barrett, M.D.
In 2005, Peter Clarence Foster, an Australian who probably holds the world record for the number of diet-pill-related criminal convictions, was ordered to pay AU$150,000 as part of a settlement in yet another scheme. Foster was also banned from participating in any weight-loss, cosmetic, or health industry-related business for five years. The case involved Chaste Corporation, a company that marketed a phony diet pill called TRIMit and sold expensive distributorships with claims that exaggerated their income potential. The Australian Competition and Consumer Commission began proceedings against Chaste in 2001.
In September 2005, the Federal Court of Australia concluded :
- Chaste made false claims about the effectiveness of TRIMit pills and lied about scientific research conducted on the product. Among other things, the company falsely advertised that TRIMit had been successfully launched in the United States and had been scientifically tested at eleven universities. Such ads were actually published before TRIMit was formulated and its ingredients were determined!
- Seventy "area managers" had been recruited with false promises that Chaste would engage in an elaborate marketing campaign and would repurchase any unsold stock and marketing materials if they wanted to discontinue their affiliation.
- Chaste was set up for the sole purpose of profiting from the sale of distribution rights. The $39,900 fees that people paid to become area managers were immediately split between Foster and Webb for their own use, with no funds reserved to promote the business.
- Even though Foster was in jail when Chase was set up, he was able to design and control it and received more than $1 million between December 1999 and November 2001, when the company went into liquidation bankruptcy.
- Although Foster "had convictions in relation to the unlawful sale and promotion of weight loss products, and a reputation as the instigator of dubious and failed schemes for . . . purported slimming or weight loss products," his involvement with Chaste was deliberately concealed from potential investors.
The Court ruling included assessments of $600,000 against the company, $150,000 against its sole director (Braddon Webb), $100,000 against its legal adviser (Sean Cousins), $30,000 against its sales director (Kevin McMullin), and $20,000 against the company's "research director" (Dr. Stephen D'Alton). In February 2009, Cousins was declared unfit to practice and was struck off the struck off the register, which means he can no longer practice law .
U.S. Imprisonment in 1989
Foster first came to my attention in 1989 when he and another Australian (Trevor Brine) advertised in my local newspaper that Cho Low Tea would reduce blood cholesterol levels while still allowing users to eat whatever they pleased. The ad also appeared in the Washington Post, the Los Angeles Times, and about 100 other papers throughout the United States. The ads contained the photograph and testimonial of a prominent young television actor, endorsements from seven medical sources, and the logo of the Better Business Bureau (BBB). At that time Foster was 26 years old.
The scheme failed because when Foster and Brine asked the newspapers to extend credit for the cost of the ads, an American Newspaper Publishers Association Credit Bureau official (James Ralph) realized that their credit references were phony and alerted the BBB and various law-enforcement agencies. Four days after the ad appeared, the BBB's national office notified newspapers that the marketer was not a Bureau member and lacked permission to use its logo . Government enforcement agencies also moved quickly. The Postal Service began its legal machinery to block orders through the mail. The Food and Drug Branch of the California Department of Health Services persuaded the fulfillment house (not a party to the scheme) that was supposed to mail the tea to hold the payments pending further investigation. Then the Los Angeles police arrested Foster and Brine. It turned out that Foster had fled England while awaiting trial for a scheme involving the sale of almost $7 million worth of Bai Lin Tea, a supposed weight-loss aid . Foster's company, Slimweight, U.K., was subsequently convicted and fined £5,000. Foster had also operated a similar scam in Australia.
It also turned out that no Cho Low Tea actually existed. Foster and Brine said they had planned to repackage another company’s tea but had not yet done so. The testimonials and endorsements in the ad were also bogus, but the authorities acted so swiftly that all customers got their money back. Foster and Brine pleaded “no contest” to false and misleading advertising and falsely representing a drug to have medicinal properties. Foster was ordered to spend to four months in the Los Angeles county jail plus three months with a California Department of Transportation crew cleaning up freeways. In addition, he was ordered to pay $228,000 still owed to newspapers that had carried the ads . Brine was given a three-month sentence. The men also received three years’ summary probation that included bans on selling tea or any product purported to have a health benefit.
Soon after Foster was released from jail, newspapers throughout the country were asked by "World Stage Advertising & Publishing Group" of North Hollywood, California to extend credit for an ad. Noting similarities to Foster’s previous approach, James Ralph discovered that Foster was at it again. This time the product was Ageless Aging, a royal jelly concoction claimed to increase energy and counter “toxins” that “contribute greatly to the aging process.” Quick work by Ralph’s and his staff persuaded newspapers processing the ad not to publish it .
When I heard about the TRIMit case, I searched the Internet and found reports that Foster had been involved in at least five more schemes:
- Foster became a boxing promoter while still in his teens. When he was 20, a judge fined him for attempting a £40,000 fraud when he tried to claim insurance for a cancelled fight .
- In 1994, a British court fined Foster £21,000 for making false claims that Bai Lin Tea aided weight loss .
- In 1966, Foster was imprisoned in Australia following proceedings brought by the Australian Securities Commission .
- In 1997, Foster agreed to pay AU$15,000 and to refrain from making further representations about physiological or therapeutic effects of a "thigh contour treatment" marketed as Biometrics .
- In 2000, Foster was sentenced to 33 months for attempted fraud through the use of forged documents to secure preferential business terms for a company he set up called Foremost Body Care Ltd. 
Press Council Adjudications
In July 2003, the Australian Press Council dismissed a complaint by Foster against the publisher of several newspapers that had described him as an "Australian conman" and "peddler of snake oil anti-fat remedies." The council concluded:
Mr Foster has given media interviews and written articles in which he has admitted to a colorful past that includes being a fugitive from justice, an escapee and a maverick marketer of lotions, potions, pills and patches. In these he has accepted that people did not have to embellish upon his past to make him look bad. The newspapers' coverage was in the circumstances fair and a matter of wide public interest.
In December 2003, the council dismissed another complaint by Foster against an Australian newspaper that had described him as a "convicted Gold Coast fraudster." The Council concluded:
Mr Foster himself provided details of his convictions dating back to 1982, which resulted in four separate periods of imprisonment and a substantial fine. Mr Foster has obtained international recognition for this series of offences, most of which involve false claims. While none of Mr Foster's convictions are explicitly for "fraud," the Council believes that the word "fraudster" has been used by the newspaper in an accurate, collective sense .
In December 2007, Foster was sentenced to 41/2 years in jail after pleading guilty to bringing in more than $300,000 into Australia that he had fraudulently obtained from the Federated Bank of Micronesia .
In 2011, the ACCC charged that Foster had viiolated 2005 court orders in connection with a scheme involving an alleged weight-loss spray called SensaSlim .
- Lander J. Decision and order. Australian Competition and Consumer Commission v Chaste Corporation Pty Ltd (in liquidation) (ACN 089 837 329), Sept 2, 2005.
- Ja C. Barrister struck off over Foster scam. Sydney Morning Herald, Feb 6, 2008.
- Council of Better Business Bureaus news release, June 15, 1989.
- News article, Arizona Star, July 1, 1989.
- "Health" tea swindlers jailed, ordered to pay $228,000. Los Angeles City Attorney news release, July 10, 1989.
- ANPA/CBI Report on World Stage, Dec. 28, 1989.
- The man behind Cherie's 'regret.' BBC News, Dec 14, 2002.
- Regulatory Intelligence Agency United Kingdom Registry, accessed Sept 21, 2005.
- Foster bows to ACCC demands on Biometrics. Australian Competition and Consumer Commission news release, Feb 27, 1997.
- Sentencing of Peter Foster, Foremost Bodycare Corporation Ltd. Serious Fraud Office press release, Sept 28, 2000.
- Australian Press Council. Adjudication No 1210, Dec 2003.
- Australian Press Council. Adjudication No 1223, Dec 2003.
- Chipperfield M. Conman Peter Foster sentenced to four years. Telegraph.co.uk, Dec 10, 2007.
- ACCC takes contempt action against Peter Foster. ACCC media release, Nov 21, 2013.
This article was revised on February 25, 2013.