Hood River entrepreneur pleads not guilty in tax case

PORTLAND, (AP) — An Oregon entrepreneur who sells products intended to help people with an array of physical maladies has pleaded not guilty to federal charges that he filed false tax returns.

Jim Cole, 66, of Hood River, is the founder of Maxam Laboratories and TurboSonic USA, companies that claim to help everything from autism and Alzheimer’s disease to varicose veins and vertigo.

Federal prosecutors, however, accuse Cole of being a modern-day snake oil salesman. Government agents started an investigation of Cole’s businesses in 2010, eventually seizing computers; 220 boxes of papers, files and records; and inventory and assets that Cole values at more than $1 million.

Court papers describe those assets as the ill-gotten gains of mail fraud. They accuse Cole of misrepresenting his nutritional supplements and exercise equipment as curatives. U.S. Magistrate Judge Dennis J. Hubel scheduled the trial for Dec. 10.

“I wish the IRS had brought these charges sooner,” Cole told The Oregonian after Friday’s arraignment in U.S. District Court. “But after they raided my businesses, terrorized my employees, ran off with all my inventory and ransacked my home, they chose to wait until now to charge me formally.

“And so until now, I’ve just had to wait. I get to have my day in court, and I look forward to showing my innocence of these charges.”

The government has leveled a series of allegations during the past few years at Cole, his companies and the supplier of powders that Maxam uses to make its nutritional-supplement sprays.

The supplier, Daniel George of Massachusetts, is said to be a chemistry genius but has no four-year college degree and served two stretches in prison for tax evasion and conspiring to make and distribute amphetamine, according to court records. But to date he faces no charges in relation to his association with Cole.

Maxam adds water to the powders George supplies and puts the mix in spray bottles, which retail for about $100. Cole estimates he has about 30,000 customers who spritz the supplements under their tongues for health benefits.

The government’s position is that Cole has routinely claimed that his dietary supplements and TurboSonic exercise machines offer curatives for his customers. Cole’s lawyer disagrees.

“Mr. Cole has repeatedly denied that he has made any false claims about his products, and he looks forward to a trial where he can show that to the world,” said attorney John J.E. Markham II.

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