The conman, the fake scientist, the gangland figure and the dudded franchisees: Collapse of SensaSlim takes new twists

Gold Coast conman Peter Foster is being pursued by the competition regulator for contempt of court for his involvement in failed diet spray SensaSlim.

On Friday, Foster was arrested in Queensland, with the regulator successfully arguing that he was a flight risk.

The Australian Competition and Consumer Commission says Foster’s involvement in SensaSlim breaches a 2005 order which restrained him for five years from being “directly or indirectly knowingly concerned in the promotion or conduct by a corporation of any business relating to weight loss, cosmetic or health industry products or services of any kind.”

The ACCC has accused SensaSlim Australia and several individuals involved in the business of misleading and deceptive conduct, and making false representations. The case is being heard in the Federal Court.

According to The Age, an affidavit revealed yesterday that gangland figure Mick Gatto and his business partner John Khoury stepped in to quash a conflict between Foster and a former colleague over SensaSlim-related fees.

Foster’s former business associate, David Scott Emerton of Coomera Waters in Queensland, also alleged that Foster impersonated a Swiss scientist to encourage people to buy franchises, the report says.

SensaSlim caught the ire of the ACCC and class action lawyers earlier this year, before collapsing, with the regulator in June winning an interim order to freeze SensaSlim’s asset, alleging it had misled and deceived customers.

Dozens of franchisees, who paid about $60,000 each to sell the herbal product, then approached the listed law firm Slater & Gordon about a potential class action against the company.

It was reported at the time that more than 100 people signed up to sell the product, which was promoted as being backed by medical research and retailed for about $1,200 per litre in Australia.

The class action idea was shelved after a report by SensaSlim administrator Jirsch Sutherland indicated there would be little money left over for franchisees after its work was completed.

The ACCC alleges SensaSlim:

• failed to disclose the involvement of Peter Foster in the business;
• falsely represented that the Sensaslim Spray was the subject of a large worldwide clinical trial when in fact no such trial was conducted;
• falsely represented that an obesity specialist gave unqualified support to the effectiveness of the Sensaslim Spray and the purported clinical trials; and
• falsely represented that Sensaslim franchisees were already participating in, and profiting from, the Sensaslim franchise, that a Sensaslim franchise had a certain earning potential and that there was a “money back buy back guarantee”.

The ACCC is seeking court orders including declarations, injunctions, penalties, compensation orders and orders that Sensaslim officers be disqualified from managing corporations in the future and costs.

Foster came to notoriety through his helping Cherie Blair, wife of former UK Prime Minister Tony Blait, buy two flats in Bristol – an event dubbed “Cheriegate” by the UK press.