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Texas State looks into Mannatech claims
The Texas attorney general’s office has been investigating Coppell-based Mannatech Inc. for more than a year over possible deceptive trade practices and has considered filing suit, according to a memo prepared by an agency official.
The memo indicates that the publicly traded company (ticker: MTEX), which uses network marketing to sell dietary supplements known as glyconutrients, is under investigation by other state and federal agencies, as well.
“Mannatech has made unproven health claims about its products, such as the ability to cure or treat cancer and numerous other ailments,” the memo states. “The claims being made are not approved by the Food and Drug Administration, making the claims potentially in violation of both state and federal law.
“There is also concern that Mannatech does not disclose certain health risks associated with its products.”
Karen Rabon, the attorney general’s public information coordinator, prepared the memo after a request Oct. 3 from an investor seeking material stemming from the investigation.
She submitted the memo Tuesday to Greg Simpson, chief of the attorney general’s open records division.
The likelihood of litigation against Mannatech was cited in the memo as one of the reasons the material should not be disclosed under the Texas Public Information Act.
The Star-Telegram obtained a copy of the memo Friday.
Tom Kelly, a spokesman for Attorney General Greg Abbott, said there would be no comment beyond what Rabon wrote in the memo.
Mannatech officials did not immediately respond to inquiries.
The attorney general’s consumer protection and public health division began investigating Mannatech in July 2005 because of possible violations of the Deceptive Trade Practices Act, the memo states.
The Department of State Health Services also requested that the company be investigated, the memo states.
“The [consumer protection division] investigation has continued, and as of the date that [the attorney general] received the present request, [the attorney general] anticipated filing suit against Mannatech,” the memo states.
The memo states that the material being sought contains privileged communication with “other state and federal enforcement agencies also conducting continuing investigations of Mannatech.”
The memo does not identify the agencies.
The memo also states that releasing the material could jeopardize the attorney general’s investigation by revealing confidential information and detailing legal strategy.
“Mannatech could use such information to alter its business practices, destroy pertinent information and/or hide evidence,” the memo states.
The Star-Telegram reported last month that two former Mannatech employees cited in a class-action lawsuit had been interviewed by the Texas attorney general’s office.
The Star-Telegram also reported that New York Attorney General Eliot Spitzer’s office has scrutinized Mannatech as a result of a complaint from three Nobel Prize-winning scientists whose work has been falsely cited as product validation on Mannatech associates’ Web sites.
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