Corporate Misconduct Accountability Project
ZyCal Bioceuticals Healthcare Company, Inc. · FTC Enforcement Action
FTC Sues Supplement Makers for False Bone and Joint Health Claims
ZyCal Bioceuticals and its marketers allegedly deceived consumers with unproven claims that their supplements could regrow bone and cartilage, targeting elderly and chronically ill buyers who spent millions on products that lacked scientific backing.
HIGH SEVERITY
TL;DR
The Federal Trade Commission filed a complaint in February 2020 against ZyCal Bioceuticals, its president James Scaffidi, Excellent Marketing Results, and president Michael McGahee. The FTC alleged these companies marketed dietary supplements called StimTein and Ostinol with false claims that the products could grow new bone and cartilage, cure arthritis pain, and reverse osteoporosis. According to the complaint, the defendants relied on unsubstantiated science, undisclosed employee testimonials, and misleading clinical references to sell millions of dollars worth of products to vulnerable consumers suffering from chronic bone and joint conditions. The FTC alleged these practices violated federal consumer protection laws.
This case exposes how companies exploit regulatory gaps and consumer desperation to profit from unproven health claims.
$3.6M
StimTein gross sales 2015-2018
$3.1M
Ostinol sales to health professionals 2014-2017
$1.5M
Ostinol direct consumer sales 2014-2017
$1.9M
Cyplexinol ingredient sales to other companies 2014-2017
The Allegations: A Breakdown
Core Allegations
What they did · 8 points
| 01 | ZyCal Bioceuticals and its marketers claimed their supplement products could grow new bone tissue in consumers, including those with osteoporosis and osteopenia, despite possessing no competent scientific evidence to support these claims. | high |
| 02 | The companies advertised that their products could grow new cartilage and provide substantial, long-lasting relief from joint pain caused by arthritis, bursitis, and stenosis, without any reliable clinical proof. | high |
| 03 | Marketing materials falsely stated the products were clinically proven and backed by 40 years of research and 20 years of clinical use in over 500,000 medical procedures, misrepresenting the actual state of scientific evidence. | high |
| 04 | Defendants used testimonials from company employees and relatives of employees without disclosing these material connections, presenting them as ordinary impartial consumers. | high |
| 05 | ZyCal supplied false and misleading marketing materials to trade customers like Excellent Marketing Results, providing the means and instrumentalities for widespread consumer deception. | high |
| 06 | The companies targeted vulnerable populations suffering from chronic pain and degenerative bone conditions, charging $30 to $135 per month for products that lacked proof of efficacy. | high |
| 07 | Defendants marketed the active ingredient Cyplexinol as a stem cell activating protein complex that could regenerate bone and cartilage tissue when taken orally, a claim unsupported by human clinical trials. | high |
| 08 | The complaint alleges these deceptive practices generated millions in revenue while consumers delayed or avoided evidence-based medical treatments, potentially worsening their health conditions. | high |
Regulatory Failures
How they exploited oversight gaps · 6 points
| 01 | The dietary supplement industry operates in a regulatory gray zone where the bar for proving efficacy is lower than for pharmaceuticals, creating opportunities for unsubstantiated health claims. | medium |
| 02 | Defendants exploited this minimal oversight environment by plastering marketing materials with references to studies and medical usage while relegating FDA disclaimers to fine print. | medium |
| 03 | The FTC complaint reveals how companies can generate millions in sales over years before regulators accumulate sufficient evidence to file enforcement actions. | medium |
| 04 | Infomercials and direct marketing channels used by defendants typically lack robust fact-checking before airtime, allowing false health promises to reach mass audiences without immediate scrutiny. | medium |
| 05 | Limited enforcement resources mean regulatory bodies must pick their battles, often entering the scene only after substantial consumer harm has already occurred. | medium |
| 06 | The case illustrates how neoliberal approaches to governance, championing minimal regulatory interference, can fail to protect consumers from sophisticated marketing deception. | medium |
Profit Over People
Corporate greed in action · 7 points
| 01 | ZyCal Bioceuticals and its president James Scaffidi, who owned approximately 86% of the company, directly profited from the sale of unproven supplements to desperate consumers. | high |
| 02 | Excellent Marketing Results president Michael McGahee personally appeared in infomercials making false claims about bone and cartilage growth, driving sales while potentially harming consumers. | high |
| 03 | The companies invested heavily in marketing infrastructure including infomercials, websites, and promotional materials while neglecting to conduct rigorous human clinical trials. | high |
| 04 | Even if settlements or court rulings impose fines, the net financial gain from years of deceptive marketing can remain substantial, making penalties merely a cost of doing business. | high |
| 05 | High profit margins on supplements combined with consumer desperation created huge incentives for unscrupulous business tactics prioritizing revenue over consumer welfare. | high |
| 06 | The business model depended on creating illusions of medical breakthroughs rather than investing in actual scientific innovation or rigorous product testing. | high |
| 07 | Defendants structured their claims to exploit the gap between what consumers wanted to believe and what science could actually demonstrate, maximizing sales at consumer expense. | high |
Economic Fallout
The financial harm to consumers and communities · 6 points
| 01 | Consumers suffering from arthritis, osteoporosis, and chronic pain spent millions on products priced at $30 to $135 per month without receiving the promised health benefits. | high |
| 02 | Elderly consumers on fixed incomes faced especially devastating financial harm from repeated monthly purchases over months or years in pursuit of nonexistent cures. | high |
| 03 | Money spent on ineffective supplements diverted resources from legitimate medical therapies, local businesses, and community services, creating ripple effects in local economies. | medium |
| 04 | Medical costs increased when patients delayed evidence-based treatments while relying on unproven supplements, ultimately burdening the healthcare system. | medium |
| 05 | The financial damage extended beyond individual pocketbooks to erode community trust in wellness products and healthcare professionals, undermining legitimate businesses. | medium |
| 06 | For communities with large elderly populations and limited access to specialized healthcare, these false promises became perceived lifelines that drained already limited financial resources. | medium |
Public Health and Safety
How false claims endangered consumers · 6 points
| 01 | People relying on unproven supplements to manage severe arthritic conditions and osteoporosis delayed or entirely avoided evidence-based medical interventions, potentially worsening their physical conditions. | high |
| 02 | False hope followed by disappointment devastated consumer morale, with individuals in pain suffering further as they realized they had been lured by illusions of miracle cures. | high |
| 03 | The cumulative effect of consumers choosing unproven supplements over legitimate treatments led to worsened health outcomes and higher eventual healthcare costs. | high |
| 04 | Marketing that conflated preliminary or irrelevant studies with clinically proven results undermined consumer ability to make informed health decisions. | medium |
| 05 | Vulnerable populations suffering from debilitating joint ailments became targets for exploitation, with their medical desperation weaponized for corporate profit. | high |
| 06 | The general erosion of trust in businesses and healthcare professionals caused by these deceptive practices can reduce consumer willingness to pursue any treatment, legitimate or otherwise. | medium |
Corporate Accountability Failures
How the system enabled this conduct · 7 points
| 01 | The corporate structure allowed executives and shareholders to reap substantial rewards while consumers faced financial and health consequences, with no criminal repercussions alleged. | high |
| 02 | Defendants operated for over a decade, from at least 2009 to 2020, before facing federal enforcement action, demonstrating the delayed nature of regulatory accountability. | high |
| 03 | The complaint reveals how companies can leverage legal loopholes, exploit regulatory blind spots, and prioritize shareholder returns over ethical considerations within the current system. | high |
| 04 | Even after facing FTC action, companies can settle, rebrand, and release new products with the same marketing personnel simply shifting tactics, perpetuating the cycle. | medium |
| 05 | The case demonstrates how corporate lobbying and legislative policymaking effectively reduce oversight, creating regulatory gray zones where questionable claims proliferate. | medium |
| 06 | Insufficient penalties that fail to exceed profits from misconduct allow unscrupulous operators to treat legal liability as merely another business expense. | high |
| 07 | The pattern of questionable claims, big profits, possible lawsuits, moderate penalties, and rebranding represents a feature rather than a bug of the current neoliberal system. | high |
The PR Machine
How defendants controlled the narrative · 7 points
| 01 | Defendants created a massive marketing infrastructure spanning infomercials, websites, print materials, radio spots, and direct mail to ensure consumers received a consistent message about scientifically proven bone and cartilage growth. | medium |
| 02 | The StimTein infomercial featured host Michael McGahee making false claims about 40 years of research, 20 years of clinical use in 500,000 medical procedures, and university studies proving the product worked. | high |
| 03 | Marketing materials referenced prestigious medical publications like The Journal of Biological Chemistry and Arthritis Research and Therapy to create false scientific credibility. | high |
| 04 | Defendants used doctor endorsements and testimonials from healthcare professionals to lend authority to unproven claims, with at least one endorser being a company sales representative. | high |
| 05 | The companies staged consumer testimonials using employees and employee relatives without disclosure, turning marketing campaigns into deceptive performances. | high |
| 06 | Promotional materials emphasized that products were natural, non-drug alternatives used by doctors for years, exploiting consumer preference for natural solutions. | medium |
| 07 | By the time consumer complaints or regulatory investigations surfaced, the defendants had already reached mass audiences and generated millions in revenue through coordinated marketing saturation. | medium |
Wealth Disparity
How this widens economic inequality · 6 points
| 01 | Executives and shareholders reaped substantial financial rewards from sales exceeding $10 million over several years while marginalized individuals and communities struggled with chronic ailments and limited incomes. | high |
| 02 | The targeting of older adults and people with degenerative bone diseases represents exploitation of a population already medically and financially stressed, rendering them more economically precarious. | high |
| 03 | Corporate monetization of consumer pain, confusion, and vulnerability directly contributed to widening wealth disparity, transferring money from vulnerable populations to corporate coffers. | high |
| 04 | The pattern of predation on medically desperate consumers, presented as normal market behavior, functions as designed under a system prioritizing minimal constraints on corporate activity. | medium |
| 05 | Small, genuinely innovative businesses face unfair competition from companies that exploit ambiguous claims and invest more in marketing than research, disadvantaging ethical market participants. | medium |
| 06 | The economic system rewards those who can best navigate or exploit regulatory ambiguity rather than those who invest in legitimate scientific innovation and consumer welfare. | medium |
Community Impact
Harm beyond individual consumers · 6 points
| 01 | Communities with large elderly populations and limited access to specialized healthcare absorbed economic impacts through increased healthcare burdens and reduced household disposable income. | medium |
| 02 | Trust in healthcare professionals weakened as hype-fueled marketing saturated the environment, making it harder for legitimate medical advice to reach vulnerable populations. | medium |
| 03 | The proliferation of misleading products disrupted real innovation and fostered cynicism about the scientific process, eroding credibility of regulatory bodies and medical institutions. | medium |
| 04 | Workers potentially faced pressure to give glowing product endorsements without disclosure, degrading professional integrity and creating complicity in questionable corporate activities. | low |
| 05 | Fear of job loss or lack of viable alternatives may have coerced employees into participating in deceptive marketing, contributing to cyclical unethical corporate structures. | low |
| 06 | Consumer advocacy networks had to divert resources to combat these specific false claims rather than addressing other pressing health and safety issues affecting communities. | low |
The Bottom Line
What this case reveals · 6 points
| 01 | The FTC complaint against ZyCal Bioceuticals exposes how dietary supplement companies can exploit regulatory gaps to market unproven products with false health claims to vulnerable populations. | high |
| 02 | This case demonstrates systemic failures in corporate accountability where profit maximization eclipses consumer protection, public health, and scientific integrity. | high |
| 03 | The pattern of behavior alleged spans over a decade and involves coordinated efforts between manufacturers, marketers, and endorsers to create and sustain consumer deception. | high |
| 04 | Meaningful reform requires stronger regulatory oversight, heightened penalties, consumer education, corporate culture changes, and grassroots activism to rebalance power between corporations and public interest. | medium |
| 05 | Until enforcement mechanisms can keep pace with marketing sophistication and penalties exceed profits from misconduct, similar cases will continue to emerge as features of the current economic system. | medium |
| 06 | This complaint serves as a rallying cry for increased global collaboration among consumer advocacy groups and stricter standardized regulations demanding robust clinical evidence before disease-related advertising claims. | medium |
Timeline of Events
2009
ZyCal Bioceuticals recruits Excellent Marketing Results as trade customer and encourages infomercial marketing of Cyplexinol product branded as StimTein.
August 2009
ZyCal provides Ostinol Talking Points to EMR emphasizing claims that products stimulate cells to grow bone tissue and cartilage, which EMR incorporates into StimTein advertising.
2011
ZyCal begins marketing Cyplexinol ingredient and oral products to other trade customers with bone and joint claims similar to those provided to EMR.
2014
ZyCal launches direct-to-consumer and health professional marketing of Ostinol product line, claiming products grow bone and cartilage and are clinically proven.
2015-2018
EMR generates approximately $3.6 million in gross sales minus returns of StimTein through infomercials and internet marketing making false bone and cartilage growth claims.
2014-2017
ZyCal generates over $3.1 million in Ostinol sales to health professionals, $1.5 million in direct consumer sales, and $1.9 million in Cyplexinol ingredient sales.
August 2018
EMR stops StimTein advertising months after receiving Civil Investigative Demand from FTC.
February 10, 2020
FTC files complaint in U.S. District Court for District of Massachusetts seeking permanent injunction and equitable relief against all defendants.
Direct Quotes from the Legal Record
QUOTE 1
Core false claim about bone growth
allegations
“The proteins in Ostinol™ naturally stimulate cells to grow bone tissue so calcium can bind to it. Ostinol™ is the only product[,] which contains these proteins that are proven to activate stem cells which build bone tissue – a natural process known as osteoinduction.”
💡 This quote shows defendants explicitly claimed their product could activate stem cells and grow bone tissue, a claim the FTC alleges is completely unsubstantiated.
QUOTE 2
False claim about cartilage growth
allegations
“The proteins in Ostinol™ naturally stimulate stem cells which absorb glucosamine and chondroitin to put them together to make cartilage. Ostinol™ is the only product which contains these proteins that are proven to activate stem cells which make cartilage – a natural process known as osteoinduction.”
💡 Defendants marketed their products as uniquely proven to regenerate cartilage through stem cell activation, claims lacking reliable scientific evidence.
QUOTE 3
Sweeping efficacy claim without evidence
allegations
“In truth and in fact, Defendants possess no competent and reliable scientific evidence that any Cyplexinol product, taken as directed, provides any of the health benefits advertised by Defendants, nor are any of the advertised benefits clinically proven.”
💡 The FTC directly states that none of the advertised health benefits have scientific backing, exposing the entire marketing campaign as false.
QUOTE 4
Infomercial false substantiation claim
pr_machine
“The bone activating proteins in StimTein are backed by 40 years of research. They have been reviewed in prestigious medical publications such as Arthritis, Research, and Therapy, The Journal of Biological Chemistry, and Arthritis and Rheumatism from the American College of Rheumatology. They have 20 years of clinical use in over 500,000 medical procedures along with clinical trials that proves [sic] they do in fact work.”
💡 This infomercial script shows how defendants created false scientific credibility by name-dropping journals and citing numbers that did not actually support the claims being made.
QUOTE 5
Testimonial deception
allegations
“The EMR Defendants used the testimonial of a then-employee of EMR and the testimonial of the mother of another then-employee of EMR, as consumer endorsements of StimTein without disclosing their connections to the company.”
💡 Staged testimonials from company insiders presented as impartial consumers represent deliberate deception designed to manufacture false credibility.
QUOTE 6
Targeting vulnerable populations
health
“If you have pain from arthritis, bursitis, stenosis Or any other type of joint pain, and that includes back pain… find out how to free yourself from that pain in a way you never dreamed possible!”
💡 Marketing explicitly targeted people suffering from chronic pain conditions, exploiting their desperation for relief.
QUOTE 7
Undisclosed endorser conflict
pr_machine
“They also used Spinks’ endorsement without disclosing that she was a ZyCal sales representative at the time her endorsement was made.”
💡 A registered dietitian’s endorsement carried medical authority, but consumers did not know she was on the company payroll.
QUOTE 8
Clinical proof claim
allegations
“Our [StimTein] Bone and Joint Restore is clearly one of the most effective clinically tested non-drug supplements on the market today. Period.”
💡 Definitive language about clinical testing and effectiveness without the scientific evidence to back it up exemplifies the deceptive marketing strategy.
QUOTE 9
Direct bone regeneration claim
allegations
“Ostinol™ Standard contains 450mg of Cyplexinol® bio-active protein-complex, which is clinically proven to activate your body’s natural cells to grow healthy new bone and cartilage tissue.”
💡 The use of ‘clinically proven’ to describe unverified bone and cartilage growth claims shows how defendants falsely invoked scientific authority.
QUOTE 10
Rapid results claim
allegations
“FAST – In a clinical study people had reported less discomfort in as fast as 7 days”
💡 Promising fast relief from chronic conditions increases urgency to purchase while the claim lacks substantiation.
QUOTE 11
Only product claim
allegations
“Ostinol® products are the only supplements available on the market today that stimulate the body to grow healthy, new cartilage tissue.”
💡 Claiming to be the only product with unique regenerative properties creates false competitive advantage and misleads consumers about alternatives.
QUOTE 12
Stem cell activation claim
allegations
“manufacturing the only all natural ingredient proven to turn on stem cells and regenerate bone and cartilage tissue”
💡 Representing an ingredient as proven to activate stem cells and regenerate tissue without reliable evidence exploits cutting-edge scientific concepts for marketing gain.
QUOTE 13
Professional use claim
pr_machine
“Before being used as a nutritional supplement, this class of proteins was used clinically for years to grow bone and cartilage tissue postoperatively.”
💡 Connecting the oral supplement to surgical bone graft materials creates false equivalence and suggests medical-grade efficacy without proof.
QUOTE 14
Consumer harm acknowledgment
economic
“Consumers are suffering, have suffered, and will continue to suffer substantial injury as a result of Defendants’ violations of the FTC Act.”
💡 The FTC explicitly acknowledges ongoing consumer harm from these deceptive practices.
QUOTE 15
Unjust enrichment
accountability
“In addition, Defendants have been unjustly enriched as a result of their unlawful acts or practices. Absent injunctive relief by this Court, Defendants are likely to continue to injure consumers, reap unjust enrichment, and harm the public interest.”
💡 The complaint directly states that defendants profited illegally and will continue harming the public without court intervention.
Frequently Asked Questions
What products were involved in this case?
The FTC complaint involves StimTein (marketed by Excellent Marketing Results) and Ostinol products (marketed by ZyCal Bioceuticals), all containing an ingredient called Cyplexinol. These dietary supplements were sold to consumers, health professionals, and other trade customers.
What false claims did these companies make?
According to the FTC, the companies falsely claimed their products could grow new bone and cartilage, reverse osteoporosis and osteopenia, and provide substantial relief from chronic joint pain caused by arthritis and other conditions. They marketed these claims as clinically proven despite lacking competent scientific evidence.
How much money did these companies make?
From 2015 to 2018, StimTein generated approximately $3.6 million in gross sales. From 2014 to 2017, ZyCal made over $3.1 million selling Ostinol to health professionals, $1.5 million in direct consumer sales, and $1.9 million selling the Cyplexinol ingredient to other companies.
Who was harmed by these products?
The FTC alleges that vulnerable consumers suffering from chronic bone and joint conditions, including many elderly people on fixed incomes, were harmed. They spent significant money on products that did not deliver promised results, potentially delaying legitimate medical treatment.
Were the testimonials real?
No. The FTC alleges that testimonials presented as ordinary consumers were actually from company employees and relatives of employees. These material connections were not disclosed to buyers, making the endorsements deceptive.
What laws did these companies allegedly violate?
The FTC alleges violations of Section 5(a) of the FTC Act (prohibiting unfair or deceptive acts or practices) and Section 12 (prohibiting false advertisements for drugs, devices, foods, or cosmetics). The complaint includes nine separate counts of violations.
How long did this alleged misconduct continue?
According to the complaint, the deceptive practices began in at least 2009 and continued until at least August 2018 for StimTein, and were ongoing as of the February 2020 filing date for Ostinol products.
What is the FTC asking the court to do?
The FTC is asking for a permanent injunction to stop future violations, monetary relief including restitution and disgorgement of ill-gotten gains to compensate harmed consumers, and other equitable relief the court deems appropriate.
How could the regulatory system allow this to happen?
Dietary supplements face less stringent regulation than pharmaceuticals, creating opportunities for unsubstantiated claims. Limited enforcement resources mean companies can operate for years before regulators accumulate evidence for legal action. This case highlights systemic gaps in consumer protection.
What can consumers do to protect themselves from similar schemes?
Consumers should be skeptical of miracle cure claims, verify that health claims are backed by rigorous peer-reviewed research, consult licensed healthcare providers before trying supplements for serious conditions, check FTC and FDA websites for warnings about specific products, and report suspected false advertising to the FTC at ftc.gov/complaint.
The FTC has a couple of links about this story, this is the most recent as of today: https://www.ftc.gov/system/files/documents/cases/182_3133_zycal_bio_-_stipulated_final_order_0.pdf
💡 Explore Corporate Misconduct by Category
Corporations harm people every day — from wage theft to pollution. Learn more by exploring key areas of injustice.
- 💀 Product Safety Violations — When companies risk lives for profit.
- 🌿 Environmental Violations — Pollution, ecological collapse, and unchecked greed.
- 💼 Labor Exploitation — Wage theft, worker abuse, and unsafe conditions.
- 🛡️ Data Breaches & Privacy Abuses — Misuse and mishandling of personal information.
- 💵 Financial Fraud & Corruption — Lies, scams, and executive impunity.
