Color me unsurprised.

You have no doubt seen the commercials for the herbal penis-enlarging supplement Enzyte. They feature a guy with a weird smile and his grinning wife. The pills themselves come in suspiciously medicinal-looking packaging. (With a picture of a race car on the package, you begin to wonder who their target market is...)

Well, all of those guys are getting prosecuted for fraud. And one exec -- likely to save his own ass -- is coming clean.

James Teegarden Jr., the former vice president of operations at Berkeley Premium Nutraceuticals, explained Tuesday in U.S. District Court how he and others at the company made up much of the content that appeared in Enzyte ads.

He said employees of the Forest Park company created fictitious doctors to endorse the pills, fabricated a customer satisfaction survey and made up numbers to back up claims about Enzyte's effectiveness.

"So all this is a fiction?" Judge S. Arthur Spiegel asked about some of the claims.

"That's correct, your honor," Teegarden said.

Teegarden's testimony is key to the case federal prosecutors are making against Berkeley and its founder, Steve Warshak, who is accused of orchestrating a $100 million conspiracy to defraud thousands of customers.

Warshak faces up to 20 years in prison and millions of dollars in penalties if his trial ends with a conviction.

Several other company employees, including Warshak's mother, Harriet, also are charged with participating in the conspiracy.

Teegarden, who has pleaded guilty and is cooperating with prosecutors, said Warshak oversaw the phony ads and every other aspect of Berkeley's business.

"He was intimately involved with all of it," Teegarden said. "He knew what was going on in the departments all the time."

Teegarden said Warshak told him to create two spreadsheets of data to support claims Berkeley was making in Enzyte ads.

One spreadsheet purportedly showed how the pills increased penis size by an average of 24 percent, when in fact no customers had reported such results. Instead, Teegarden said, he made up the numbers.

With respect to these herbal remedies, they are always advertising suspect data -- studies that aren't conducted with scientific rigor -- but only rarely in my experience are they totally making stuff up. These guys are slimy. Exhibit B:

When customers ordered a product, the company's goal was to keep charging their credit cards for as long as possible, Teegarden said.

He said first-time customers were automatically enrolled in a "continuity program" that sent Enzyte to their homes every month and charged their credit cards without authorization.

"Without continuity, the company wouldn't exist," Teegarden said. "It was the sole profit of the business."

If customers complained, he said, employees were instructed to "make it as difficult as possible" for them to get their money back. In some cases, Teegarden said, Warshak required customers to produce a notarized statement from a doctor certifying Enzyte did not work. (Emphasis mine.)

So I was talking to a friend of mine speculating about how these companies make money. I mean some people gave them $100 million. Here is my theory.

Herbal remedies rely on two elements to attract customers: novelty and placebo. They rely on novelty to lull people into believing that even though previous concoctions of weeds and twigs did not produce magical results, this newer, better shrubbery distillate will. The placebo aspect is important too because people will give something the benefit of the doubt particularly if they really want to see results. I would probably add word-of-mouth to that list, but it doesn't really apply when you are talking about penis enlargement supplements.

Guy: "So, let me just tell you about this penis enlargement supplement I tried."
Friend: "Oh do tell. I love it when you discuss your member with me."
Guy: "Whereas previously my penis was non-existent, it has now grown to gargantuan proportions."

I think we can assume word-of-mouth does not play for this.

On the other hand, as a business model it isn't bad. People are credulous, and in all likelihood you could make a lot of money on their ignorance before they get wise. And by then you can just move to the next scam. The only remarkable thing about this case was that they lied to such an extravagant degree that they ran into trouble with the law.

Here's a word to the wise: if it is too good to be true, it probably is. Don't buy this junk.

Hat-tip: The Consumerist