BEVERLY — As he did in his many infomercials during the past decade, Donald Barrett Jr. sat in front of a microphone yesterday, but this time he was answering questions from a federal judge about to hear Barrett plead guilty to tax and consumer fraud charges yesterday.
After telling U.S. District Court Judge Richard Stearns about his brief stint in college and five years making pizza, Barrett, 36, explained his next career move.
"I read a book, and I got into marketing and I started marketing products," Barrett said.
"And that's what brings us here today?" Stearns responded.
"Yes, your honor," Barrett replied.
Moments later, Barrett pleaded guilty to failing to report $573,000 in income from one of the products he sold in program-length advertisements produced at the Beverly businesses he founded and co-owned: ITV and Direct Marketing Concepts.
He also pleaded guilty to selling a product touted as a preventative for cancer and arthritis without any approval from the Food and Drug Administration.
When he is sentenced in July, Barrett is expected to receive a prison term of one year and one day, under the terms of a plea agreement between his lawyers, federal prosecutors, and regulators from the FDA and the IRS.
He could have faced a total of four years and $500,000 in fines had he been convicted at trial. He was charged last week by federal prosecutors in a complaint after agreeing to waive his right to a grand jury proceeding and indictment.
Barrett, who grew up in Saugus and lives in Plymouth now, remains free on $5,000 unsecured bond, with a condition that he surrender his passport.
He'll be back in court for sentencing on July 27.
He and his lawyer, William Kettlewell, declined to comment after yesterday's plea hearing.
It's just the latest blow to a one-time infomercial empire built on what another federal judge has called "deceptive" claims about supposedly natural cures for conditions ranging from obesity to cancer.
One of Barrett's earliest ads was for a product called Coral Calcium.
Prosecutor Gregory Noonan told the judge yesterday that Barrett and his businesses entered agreements with two other companies, King Media, which bought advertising time, and Triad, which processed credit card payments and shipped orders.
In 2002, Barrett asked Triad to start sending DMC's share of the profits directly to him. Over the next six months, Barrett collected $573,000 in profits from Coral Calcium — payments he never reported when he eventually filed his 2003 income tax return three years ago.
Barrett reported $494,500 in income that year but did not include any of the Coral Calcium profits.
Meanwhile, another ITV/DMC-produced infomercial had caught the attention of the FDA.
Barrett produced and hosted a program touting "Supreme Greens with MSM" as a way to prevent arthritis and cancer, Noonan told the judge.
Federal law requires that any product making claims to prevent or cure a disease undergo testing as a drug and be so labeled with dosage instructions.
Even after the FDA warned Barrett to stop promoting the product as a drug, the infomercial remained on the air — and in 2004 was still selling the product.
Kettlewell, the defense attorney, said the investigation into his client had taken place over a number of years and that as part of plea negotiations he and Barrett had reached some agreements with prosecutors concerning the statute of limitations on some allegations.
Barrett also lost a court battle with the Federal Trade Commission, which sued him civilly over claims made in the same ads, and has been ordered to pay approximately $78 million.
The litigation essentially put him out of business.
Courts reporter Julie Manganis may be reached at 978-338-2521 or jmanganis@salemnews.com.
