PORTLAND (AP) – A dietary supplement marketer that agreed to pay its customers $1 million after being accused of running misleading infomercials has sought Chapter 11 bankruptcy protection.

Vital Basics Inc. President Rob Graham said the time his company spent settling Federal Trade Commission charges about its marketing – and the $1 million it agreed to repay customers – drained resources from its daily operations.

The company said in Chapter 11 court filings that it owes 3,000 individuals and businesses, including 50 in Maine.

a total of $16.3 million. The company said it wants to ensure it can keep paying bills and continue operations in the face of costly legal proceedings.

Vital Basics, which formerly operated as Talk America, promotes dietary supplements called Focus Factor and V-Factor. The FTC said advertisements about the products made claims about their benefits that were not backed by scientific evidence.

Some of the advertised claims were that Focus Factor would improve memory and concentration for everyone from schoolchildren to elderly people, and that V-Factor would enhance sexual performance in men.

Vital Basics did not admit guilt as part of the $1 million settlement with the FTC. But the government characterized the payment as a victory in its effort to crack down on misleading marketing of dietary supplements.

The company no longer markets V-Factor, but it is still selling Focus Factor without making the claims the FTC said were unsubstantiated.

The Portland company has been criticized in the past for its marketing practices. It agreed in 1998 to stop advertising products that promised to reverse baldness, cleanse colons and replace fresh fruits and vegetables in the diet.

It also agreed to give refunds to customers and pay $150,000 in legal fees to settle charges with consumer-protection officials in nine states.

Graham was the founder of Talk America, a Portland telemarketing firm that grew to 750 employees by 1996. The company encountered financial problems and filed for bankruptcy protection in 1999.

AP-ES-05-12-04 1411EDT