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American Morning

Congress Taking Look at Scams That Target Elderly

Aired September 10, 2001 - 11:03   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
COLLEEN MCEDWARDS, CNN ANCHOR: Congress is taking a look today at scams that target the elderly, particularly one that promises a fountain of youth.

CNN's Congressional correspondent Jonathan Karl is watching this story for us on Capitol Hill, joins us right now with a live update.

Hey, Jonathan, what's going on?

JONATHAN KARL, CNN CORRESPONDENT: Well, Colleen, the hearing has just gotten under way, and at the center of this congressional investigation is a familiar name. His name is Glen Braswell. He was one of those, who you may remember, got one of those last-minute controversial pardons from President Clinton in the last 24 hours of the Clinton presidency.

Braswell is the head of a $200 million a year conglomerate that sells dietary supplements. He has been subpoenaed, asked to testify at this hearing. That has not happened yet. We are told by members of this committee that Braswell and the editor of one of his publications are expected to take the Fifth Amendment, refusing to answer any questions, citing that right against self-incrimination.

But The committee recently did hear from somebody who was a former top executive in Braswell's empire. The former chief financial officer of his company, Mike O'Neill testified. Here's a bit of what he had to say.

(BEGIN VIDEO CLIP)

MIKE O'NEILL, FMR. CFO, OB DATA SYSTEMS: I cannot say that all products do not work or the people that take them don't feel better. I'm not a doctor. I'm not research scientist. I have no basis to have an opinion on that portion of the product.

What I am saying is that the process that is used to recruit customers is flawed, laden with lies and deception, and that product could not possibly deliver what promised in the advertising.

(END VIDEO CLIP)

KARL: Mike O'Neill served as chief financial officer of Braswell's companies for a period of just five months, at which time he and another top officer were fired. So while we have not any heard comment from Braswell, and his attorney, contacted by CNN, says he will have no comment until after the hearing, one might imagine that they may say that he is a disgruntled employee.

But we will hear from Braswell. At least, he will be asked the questions, and if the congressional investigators are right, we will expect him to take the Fifth Amendment -- Colleen.

MCEDWARDS: Not a lot of regulation in this industry, though, Jonathan. I mean, is that where it is headed?

KARL: Well, John Breaux, who is chairing this hearing, says this is not about trying to find new laws or new regulations for this industry. After all, their are laws on the books against false and misleading advertising. What he says he is holding this hearing for is to get the information out there, because these mailings go out literally to millions of seniors every week around the country. This is a huge operation, and it's not the only one that deals in this area. So they are not talking about new laws right now, but they are talking about getting the information out there.

MCEDWARDS: CNN's Jonathan Karl, thanks very much.

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