Criminal activity was so rampant at Berkeley Premium Nutraceuticals that the company should forfeit every dollar it earned during some of its most profitable years, federal prosecutors said Wednesday (May 14).

They said cash, real estate and other assets the government is seeking could total as much as $450 million.

Prosecutors told U.S. District Judge S. Arthur Spiegel that all of the assets should be forfeited because they are the proceeds from money laundering, false advertising and fraud.

Berkeley’s founder, Steve Warshak, and several top company officials were convicted of those charges earlier this year.

But Berkeley’s lawyers said it is unreasonable and unfair to seize so much of the company’s assets when a large portion of the company’s profits was generated from legal transactions.

Martin Weinberg, Warshak’s attorney, did not concede his client or the company did anything wrong. But at the hearing Wednesday, he was required to argue that, even if they did break the law, the government is asking for too much.

He disputed the prosecution’s contention that most of Berkeley’s revenue was tainted by the company’s “continuity program,” which automatically sent herbal supplements to customers every month even if they signed up for just one delivery.

A jury found that the program was the key to a massive fraud scheme that included money laundering and bogus claims in ads about the effectiveness of Berkeley’s products.

Weinberg said most of the company’s sales did not come from the continuity program. He said the jury that convicted Warshak and the others identified assets subject to forfeiture, but it did not say how much money should be taken.

Judge Spiegel, however, suggested the company might face an uphill fight. He said federal law allows the government to seize an entire account or asset even if just some of the value is tied to criminal activity.

The judge said he would decide how much the company and Warshak must forfeit when Warshak is sentenced later this year.

—Dan Horn, The Cincinnati Enquirer, 5/15/08