She orchestrated a global health scam that gave false hope to seriously ill people and fooled multinational companies including Apple and Penguin.

In the most significant action taken against the disgraced "wellness" blogger, Victoria's consumer watchdog on Friday launched legal proceedings in the Federal Court that pave the way for a prosecution against Ms Gibson's company.

The action is in response to Gibson's false claims of beating terminal brain cancer by eschewing conventional medicine, and the unlawful fundraising appeals run by The Whole Pantry founder in 2013 and 2014.

In separate action, Penguin Publishing will have to pay $30,000 for failing to fact-check Gibson's book, The Whole Pantry, in which she claims to have cured herself with a healthy lifestyle. The publisher will also be forced to include "prominent warning notice" on all future books that contain claims about natural therapies.

Consumer Affairs Victoria said the legal action followed an in-depth investigation into alleged breaches of Australian Consumer Law. CAV director Simon Cohen has applied for leave to commence proceedings against Inkerman Road Nominees Pty Ltd in the Federal Court of Australia.

Leave is required because the company, formerly known as Belle Gibson Pty Ltd, is in liquidation. Documents filed by the liquidator of her company reveal Gibson ows almost $140,000, including an $83,500 tax bill to the federal government 

If leave is granted, Ms Gibson will be hauled before the court and faces the prospect of serious penalties. 

A range of non-pecuniary penalties, including declarations and injunctions, are available to the court in civil proceedings, as well as pecuniary penalties of up to $1.1 million for companies and $220,000 for individuals. 

Consumer Affairs has penalised Penguin Publishing over its failure to fact-check Ms Gibson's book, The Whole Pantry, in which she claims to have cured herself of terminal brain cancer by rejecting conventional medicine and choosing a healthy lifestyle.

The publisher will have to fork out $30,000 to the Victorian Consumer Law Fund as part of an enforceable undertaking in which it admitted contraventions under consumer laws. 

Mr Cohen said Penguin had agreed to an enforceable undertaking acknowledging it had not required Ms Gibson to substantiate her misleading and deceptive claims prior to the book's publication.

Penguin admitted most of Ms Gibson's story set out in the book's extensive introduction had "no basis in fact".

CAV said it was concerned that the book's readership was marketed to people with cancer, those who had a family history of cancer and those with friends and relatives suffering from cancer.

"The director considers that these people were unusually susceptible, in that their illnesses, fears, family history or close relationship to cancer sufferers, pre-disposed them to being influenced by the statements [about the cancer diagnosis and treatment]," the undertaking said.

The publisher will also be forced to strengthen compliance, education and training programs to ensure all claims about medical conditions are substantiated. 

"This is an important step in ensuring that consumers receive only verified information and are not deceived, particularly where serious matters of health and medical treatment are concerned," Mr Cohen said on Friday morning. 

Consumer Affairs launched its investigation into Ms Gibson's questionable fundraising activities after Fairfax Media revealed she had stolen thousands of dollars raised for charity through multiple fundraising appeals.

In a series of news articles last year, Ms Gibson was exposed for failing to hand over the donations and lying about giving $300,000 away to charity.

The revelations cast serious doubt over her claims of beating terminal brain cancer - the story she used to build an empire that included a highly acclaimed recipe book and top-rating smartphone app. It also earned her a fan base of more than 200,000 people.

Within weeks, the disgraced author's books were being pulped and its release in the UK and US was cancelled. Apple, which was heavily invested in The Whole Pantry brand and had flown Ms Gibson overseas to work in secret on its new smartwatch, dumped its star app developer.

Eventually, Ms Gibson admitted lying about her cancer diagnosis all along. "No … None of it's true," she told the Australian Women's Weekly in April last year.

Ms  Gibson had publicly claimed to have given away 25 per cent of her company's profits and in her book wrote that "a large part of everything" earned is donated to various causes. 

But after questions from Fairfax Media last year she admitted these contributions were never made.

She blamed "cash flow" problems and lower-than-forecast sales of her award-winning app, which was downloaded 300,000 times.

She was unable to provide a list of organisations that received money.

Penguin admitted it never fact-checked Ms Gibson's claims of cancer survival and philanthropy before printing her story in 2014. 

The company previously said it published the book in "good faith" and that Ms  Gibson's story "was not something we felt we needed to verify given that the book's content focuses on the recipes".

This is despite the fact the book was heavily marketed off Ms Gibson's bogus story of survival and included a 3000-word preface detailing her cancer diagnosis, medical treatment and fundraising activities. 

Ms Gibson, now 24, has been slammed by health professionals, cancer sufferers and furious former fans for profiting from false hope and discouraging terminally ill people from using conventional medical treatment.

But she remains unrepentant and has never apologised for her actions despite claiming to have helped "countless people", including cancer patients, dump conventional medicine to treat their illnesses.

In an interview with 60 Minutes last year, for which she is believed to have been paid $45,000, Ms Gibson insisted she wasn't "trying to get away with anything".

smh.com.au