Carlsbad - Seasilver USA, a Carlsbad maker and promoter of "health" drinks and dietary supplements, closed its doors for good last week because the founder said he was tired of fighting the Federal Trade Commission.

In June, a federal judge upheld an FTC judgment requiring the company to pay a $120 million penalty for failing to provide $3 million to the agency to refund customers who bought the products. The FTC said that the products were sold using false and misleading claims.

The commission even has a phone number - (866) 217-3487 - just for Seasilver customers who qualify for a product refund. Seasilver is appealing the order, according to a company official.

Bela Berkes, company founder, said Tuesday that he shut down Seasilver USA on Friday because FTC actions were causing distributors to stop selling Seasilver.

"The FTC just beat us up so much that we lost a lot of sales and can't keep the doors open," he said. "It's time for us to move on."

The June 2006 ruling was based on FTC and Food and Drug Administration actions against Seasilver that began in June 2003. In a June 12, 2003, complaint filed in Nevada, the two federal agencies said that Seasilver USA, Americaloe and the owners of the two companies, Bela and his son, Jason Berkes, misled customers into believing that Seasilver was clinically proven to treat or cure 650 diseases, including certain cancers and AIDS.

Jason Berkes was the president, chief executive officer and owner of Seasilver as well as president and owner of Americaloe. Seasilver is a liquid dietary supplement containing aloe vera, cranberry concentrate, herbs and other ingredients. It was sold through network marketing and had five manufacturing plants in Carlsbad.

Although located in Carlsbad, Seasilver USA was incorporated in Nevada. At its peak, Bela Berkes said that before the 2003 complaint, the company had 700,000 customers and distributors and had monthly sales as high as $20 million.

On March 4, 2004, the companies and Berkeses agreed to pay $3 million in restitution, destroy mislabeled product, and stop making misleading claims about Seasilver to settle the FTC's complaint. It would allow Seasilver USA and Americaloe to continue to sell Seasilver, but without the false and misleading claims. The agreement stated that if the parties failed to pay the $3 million in six months without proving financial hardship, they would have to pay $120 million in consumer refunds.

When the parties failed to pay the $3 million or prove financial hardship by February 2006, the FTC went back to court and got the June 2006 judgment ordering the companies and owners to pay the full $120 million.

Jan Charter, an attorney for the FTC in San Francisco, said in a telephone interview that the parties had more than enough time to pay the initial $3 million.

"We gave them over a year to come up with this money," she said. "We have a $120 million judgment, and we are serious about trying to collect it."

Founder Bela Berkes' decision means that Seasilver stops production completely, although he is appealing the judgment. Some products are still available from distributor inventories. Although the company didn't pay the full $3 million, FTC attorney Charter said it did pay about $800,000, which the agency is using for refunds.

Charter said that Berkeses might get some relief from the judgment if Seasilver USA declares bankruptcy. Bela Berkes said that he hadn't considered it, but would look into it.

In the meantime, Bela Berkes said that he would find a new job. US Farms, a publicly traded company in San Diego with a farm in Valley Center, said Jason Berkes is an aloe-growing consultant for the company. In a recent company news release, Jason Berkes is listed as president of American Nursery Exchange Inc., a subsidiary of US Farms.

Bela Berkes hopes to finish his business with the FTC soon. "I'm just trying to clean this mess up," he said.

- Contact staff writer Patrick Wright at (760) 739-6675 or pwright@nctimes.com.