In its ongoing campaign to combat exaggerated health claims, the Federal Trade Commission (FTC) has reached a settlement with cactus juice marketer TriVita. The Arizona-based company agreed to refund consumers $3.5 million, settling FTC allegations that TriVita deceived consumers with unsupported claims about the health benefits of its Nopalea wellness drink.
Advertisements for Nopalea, which sold for up to $39.99 plus shipping and handling, billed the product as “Inflammation Relief without a Prescription.” The company’s frequently aired infomercials claimed the “prickly pear” fruit drink would treat a wide variety of other health conditions as well.
According to the FTC release, one featured TriVita’s Chief Science Officer, Brazos Minshew, linking inflammation to allergies, Alzheimer’s disease, heart disease and diabetes.
In an ad featuring celebrity endorser and former supermodel Cheryl Tiegs, the former Sports Illustrated model claims, “If you’ve suffered from inflammation or chronic pain for years, there’s something that can help,” the FTC release quotes.
The agency also charged TriVita with failing to disclose its connections to the individuals featured in a separate infomercial. The ad featured testimonials by satisfied customers who were in fact paid employees of the company.
“These kinds of unfounded claims are unacceptable, particularly when they impact consumers’ health,” Jessica Rich, Director of the FTC’s Bureau
Tag Archive for MLM Lawsuits
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Lawsuit: Nu Skin Paid MLM Compensation To Chinese Distributors
by Ted Nuyten • • 0 Comments
Several former Chinese distributors of Nu Skin Enterprises, Inc. claim the marketer of skin care and nutritional supplements authorized sales representatives to earn compensation on their “downline” network in violation of the country’s regulations, according to a consolidated putative class-action complaint that was filed last month in Utah federal court against Nu Skin.
Nu Skin misled shareholders, orchestrating a “massive expansion in China knowing that Nu Skin’s form of multi-level compensation violated many of China’s regulations on direct selling and prohibitions on pyramid schemes,” the lead plaintiff State-Boston Retirement System, a government pension plan, alleged in the 124-page lawsuit filed on June 30.
Plaintiffs in the consolidated complaint have requested certification of a class of shareholders who purchased Nu Skin securities including options between May 4, 2011 and January 17, 2014. The end of the class period roughly coincides with a precipitous decline in Nu Skin’s stock price (NUS: NYSE), following revelations that the Chinese government was investigating its business practices.
Plaintiffs have alleged violations of Section 10(b) of The Exchange Act and Rule 10(b)(5), and Section 20(a) of The Exchange Act.
“We continue to believe the allegations are without merit and intend to defend ourselves vigorously,” Nu Skin spokesperson Kara Schneck said. “Nu
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Court Approves Quarterly Costs For Zeek Rewards
by Tina Williams • • 0 Comments
A United States District Court judge has approved the funds for the receiver handling the Zeek Rewards Ponzi scheme, according to a Monday filing.
Receiver Kenneth Bell and his firm McGuireWoods were awarded an allowance of $756,188.52 for the first quarter of 2014. The money is for fees and expenses by the receiver and his advisers, according to an order approved by Judge Graham C. Mullen.
Of the money, $151,237.70 will be held back pending further petition to and approval by the court. A total of $39,456.02 will cover recover reimbursement expenses, the order stated.
FTI Consulting also will receive $476,334 ($95,266.80 will be held back pending further petition to and approval by the court). The funds are for services rendered during the compensation period. FTI is the forensic accountant and database consultant utilized by Bell. FTI, Bell and his constituents at McGuire Woods make up the “receiver team.” They’ve been working since mid-August 2012 to recover money connected to Zeek Rewards.
Zeek was headquartered in Lexington under the parent entity of Rex Venture Group LLC. In other requests for funding from the court, Bell has said the investigation of an alleged fraud included about two million affiliates and one million investors throughout the
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Amway India Makes Very Little Legal Progress
by Tina Williams • • 0 Comments
Justice Nooty Ramamohana Rao of the Hyderabad High Court on Tuesday granted permission to Amway India Ltd to operate 50 per cent of the amount from its bank accounts in the state.
While admitting a writ petition filed by the company questioning an order of the superintendent of police, Kurnool, directing seizure of all bank accounts of the company, the judge granted the interim relief. The company contended that since the investigation against the company was handed over to the CB-CID, the superintendent of police had no power to issue the proceedings to seize its bank accounts.
CEO Willam S. Pinckney has still not been released from jail. No word on when that might happen.
“The CEO has been booked under the Prize Chits and Money Circulation Schemes (Banning) Act besides charges of cheating as well as extortion under relevant sections of the Indian Penal Code (IPC),” the police officer said.
This is the second time that Pinckney has been taken into custody, after the Kerala police arrested him as well as two Amway directors earlier, for alleged financial irregularities. Condemning the arrest of Pinckney, Ficci said the “uncalled” for action may hit Indo-US business ..
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Bill Ackman Now Attacking Top Network Marketer, Anthony Powell
by Tina Williams • • 0 Comments
The promotional attack machine used to bring Herbalife Ltd. (NYSE:HLF) to its knees is now targeting Anthony Powell, one of the nutritional supplement company’s top distributors.
The Pershing Square Capital operated website has, under the subsection “perpetrators,” a profile of Anthony Powell, an aggressive entrepreneur highly successful at closing deals to build an Herbalife distribution network of over 16,000 distributors under his domain. Powell used this aggressiveness to become one of Herbalife Ltd. (NYSE:HLF)’s top distributors, in some years earning nearly half a million per year. The problem is, on Ackman’s Herbalife attack website Powell is accused of making get rich quick promises using a pyramid scheme to build his fortune.
In 2002, NWTW, Herbalife, Powell, and other senior Herbalife Ltd. (NYSE:HLF) distributors were sued in a class action in federal district court in Los Angeles. Plaintiff alleged that Herbalife and NWTW constituted a pyramid scheme and that the defendants were committing fraud and securities fraud by making deceptive earnings projections and omitting and misrepresenting the risks inherent in the business.
Plaintiff further alleged that “Powell, along with other of the defendants, conceived, authorized the use of and operated the Lead Generation System known as ‘The Newest Way to Wealth.’”I Herbalife settled the case for $6 million in 2004.
“Dream
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Solavei Sales Numbers Revealed
by Tina Williams • • 0 Comments
Just a few weeks after filing for Chapter 11 bankruptcy protection, Solavei CEO Ryan Wuerch said that the company is doing better than expected.
“We’re actually doing far better than we anticipated,” he told FierceWireless, estimating that only around 5 percent of the company’s customers know about its bankruptcy filing. “We’ve had very little attrition.”
T-Mobile US (NYSE:TMUS) MVNO Solavei filed for Chapter 11 bankruptcy protection earlier this month, but said it will continue to operate normally while it restructures. The company launched service in the fall of 2012, and anticipates exiting bankruptcy later this year.
Solavei’s bankruptcy filing, obtained by FierceWireless, offers a surprisingly candid view into the MVNO’s business–which is rare, considering most U.S. MVNOs don’t offer much information on their customer numbers and revenues. According to Solavei’s bankruptcy filing, the company was founded in late 2011 around the concept of “social commerce.” Specifically, Solavei pays a $5 referral commission each month for every subscriber a customer personally refers to Solavei, and this monthly commission continues for as long as the referred subscriber remains a Solavei customer.
Under Wuerch’s direction, the company has grown to 51 full-time employees and an annual revenue rate of $65 million. The company has signed up a
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Zeek Rewards Receiver Sues MLM Attorney Kevin Grimes And Howard Kaplan For $100 Million
by Ted Nuyten • • 0 Comments
Kenneth Bell, the Zeek Rewards Receivership, filed a request for permission to file separate actions against two of Zeek Rewards attorneys, Kevin Grimes and Howard Kaplan.
The Zeek Receivership:
From January 2011 until August 2012, RVG operated a massive Ponzi and pyramid scheme through ZeekRewards, an internet based so-called “MLM” (multi-level marketing) program.
Kevin D. Grimes served as legal counsel to RVG from around January 2012 until August 2012, when RVG was placed into receivership.
By virtue of his knowledge of RVG and ZeekRewards and his legal expertise, Grimes knew or should have known that RVG was perpetrating an unlawful scheme which involved a pyramid scheme, an unregistered investment contract and/or a Ponzi scheme.
Despite this knowledge, Grimes actively encouraged investors to participate in the scheme by creating a so-called “compliance” program that provided a false façade of legality and legitimacy and knowingly allowed his name to be used to promote the scheme.
Grimes knew or should have known that insufficient income from the penny auction business was being made to pay the daily “profit share” promised by ZeekRewards.
Grimes knew or should have known that the money used to fund ZeekRewards’ distributions to Affiliates came almost entirely from new participants rather than income from the Zeekler penny
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Amway Wants To Shut Down Amway Wiki
by Ted Nuyten • • 0 Comments
For many years an Amway rep runs the www.thetruthaboutamway.com website and Amway Wiki. Seems the Amway Business Conduct & Rules department wants the website to shut down.
The Truth About Amway website:
“Years ago there was a website called Quixtar Wiki. It was run by Amway and Quixtar critics and they filled it essentially with criticism and anything negative they could find about the Amway and Quixtar businesses, and some stuff that was just plain made up.
Any time you searched for a Diamond’s name, it would rank near the top of Google’s listings. So, if you invited some prospect to come to a seminar to listen to a successful Amway achiever, they’d google the person’s name and end up on a virulently anti-Amway website”
Good stuff, eh?
So nine years ago I started Amway Wiki, which would give a true picture of the business. I wouldn’t hide the negative – court cases, divorces, terminations, whatever – that kind of information is there too. But so is all the positive stories of the thousands of Diamonds around the world. Today, if you invite one of your prospects to a meeting to hear from an Amway Diamond, and they google the name, odds are AmwayWiki will be
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Primerica Agents Accused Of Failing To Pay Claim
by Tina Williams • • 0 Comments
Primerica Life Insurance Co. and two of its agents are being sued for failing to pay benefits from a life insurance policy.
Carolyn Arline and Machell Amador filed a lawsuit June 2 in the Jefferson County District Court against Primerica Life Insurance Co., Laura A. Hubbard and LaQuanda Shonta Howard, citing anticipatory breach, breach of contract, unfair settlement practices, fraud and breach of the duty of good faith and fair dealing.
The plaintiffs claim they purchased a life insurance policy which covered various individuals, including Kaloni Corbin, on May 22, 2013, from the defendants.
The suit alleges Kaloni Corbin died July 6, but the defendant failed to fully pay the plaintiffs the full benefits due under their life insurance policy, claiming “insurable interest.”
According to the suit, the defendant misrepresented the policy coverage, failed to settle the claim in a fair manner and failed to offer a valid explanation for refusing to pay the plaintiffs.
The plaintiffs are seeking damages, interest, expenses, attorney’s fees and court costs.
They are being represented by Beaumont attorney John Pat Parsons of Lindsay, Lindsay and Parsons.