According to an article in Business Insider:
Direct sales clothing brand LuLaRoe is no stranger to controversy. From torn leggings to salespeople who claim they were encouraged to incur massive debt, the company has struggled to maintain its emphasis on community and self-empowerment during a period of massive growth.
LuLaRoe is now facing a class-action lawsuit that alleges it misled its salespeople in what the plaintiffs are calling a “pyramid scheme.”
The suit, which has four plaintiffs from across the US, alleges that the company deceived salespeople — who are called “consultants” — by telling them they could return unsold inventory for a full refund if they decided to leave the company.
A sudden change to the policy in September lowered the promised refund from 100% to 90% of purchased inventory, with additional restrictions. According to Yahoo, many consultants said that they felt comfortable joining the company because of the buyback guarantee, thinking that they wouldn’t face financial stress if they weren’t able to sell as much clothing as they had hoped.
The plaintiffs allege that in changing the rule, the company misled consultants who thought they would still be able to sell clothing with the 100% buyback guarantee.
The suit was filed on October 13 in the US
Tag Archive for MLM Lawsuits
Hot Business News Today
Herbalife Is corrupt, Circle Of Success Events Are Useless, Lawsuit Claims
by Ted Nuyten • • 0 Comments
As published in Legal NewsLine:
Calling Herbalife a “corrupt organization of individuals,” several plaintiffs have filed a class action lawsuit over allegations that the multi-level marketing company’s Circle of Success events are “valueless.”
Jeff Rodgers, Patricia Rodgers, Michael Lavigne, Jennifer Lavigne, et al., individually and on behalf of all others similarly situated, filed a complaint on Sept. 18 in the U.S. District Court for the Southern District of Florida against Herbalife LTD.;
Herbalife International Inc.; Herbalife International of America Inc., et al. alleging that the defendants violated the Florida Deceptive and Unfair Trade Practices Act, unjust enrichment and other counts.
According to the complaint, the plaintiffs allege that defendants’ Circle of Success events are held each month in dozens of locations across the country and range in size from 200 to 20,000 attendees.
Plaintiffs claim that they have spent thousands of dollars attending these events but received no benefit from doing so despite defendants’ continued guarantee of significant income, a better lifestyle and even happiness by attending.
They allege the defendants use “misrepresentation and deceit” to sell the “emotionally manipulative” events, the suit states.
The suit states
“the events are pitched as a guaranteed pathway to attaining life-changing financial success” and that participants are told to attend every
Hot Business News Today
Ex CEO Max International Pleads Guilty To Tax Evasion
by Ted Nuyten • • 0 Comments
According to an article in the Deseret News:
The former CEO of a Utah-based nutrition supplement company pleaded guilty Thursday to tax evasion.
Peter Nordberg, 61, was indicted by a federal grand jury in January with two counts of attempted income tax evasion, each carrying a statutory minimum sentence of five years in prison. He pleaded guilty to one of the counts Thursday, admitting to not paying $275,790 in taxes over two years.
The second count will be dismissed at a sentencing hearing Nov. 30, according to court documents.
Between September 2007 and December 2011, Nordberg served as the chief executive officer of Max International, a Utah-based multilevel marketing company that manufactures and sells nutritional supplements.
In addition to his annual salary of $331,336 in 2009, Nordberg received a portion of the company’s commissions as a bonus, bringing his income to $822,647, according to the indictment.
Federal prosecutors say Nordberg, a Draper resident at the time, set up a limited liability company in Delaware under the name MAX MLM Partners and had his bonuses deposited into an associated bank account. Nordberg directed employees at Max International to report the money as non-employee compensation.
Nordberg did not report the bonus income on his taxes, according to the indictment,
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Louis And Leone van der Linde Achieve 2 Star Platinum At Mannatech
by Ted Nuyten • • 0 Comments
Louis and Leone van der Linde from South Africa are the first distributors who under Mannatech’s new compensationplan achieve the top rank of 2 Star Platinum.
Mannatech, global developer of advanced nutritional supplements and a BusinessForHome.org Top 100 MLM Company, has implemented, a new, state-of-the-art global seamless compensation plan which is expected to deliver record-setting growth and new momentum for its independent sales Associates all over the world.
In the last year, Mannatech has reshaped itself with a rebrand and the introduction of a variety of consumer-friendly products in some of the fastest growing market segments in the direct selling distribution channel.
And as of July 1, it has completely overhauled its compensation plan with one that offers a business model built on compliance, simplicity, and incentives for proper Associate behaviors that will build long-term and profitable businesses.
“Our new compensation plan is easy to understand and share while giving our Associates a clear path to building successful and sustainable businesses,”
said Alfredo “Al” Bala, CEO and President of Mannatech.
Louis and Leone with South African Mannatech leaders
“Mannatech is widely recognized for having the highest quality, science-backed products, and now our opportunity will match our products.
Our new compensation plan will make sure those who
Hot Business News Today
Louis And Leone van der Linde Achieve 2 Star Platinum At Mannatech
by Ted Nuyten • • 0 Comments
Louis and Leone van der Linde from South Africa are the first distributors who under Mannatech’s new compensationplan achieve the top rank of 2 Star Platinum.
Mannatech, global developer of advanced nutritional supplements and a BusinessForHome.org Top 100 MLM Company, has implemented, a new, state-of-the-art global seamless compensation plan which is expected to deliver record-setting growth and new momentum for its independent sales Associates all over the world.
In the last year, Mannatech has reshaped itself with a rebrand and the introduction of a variety of consumer-friendly products in some of the fastest growing market segments in the direct selling distribution channel.
And as of July 1, it has completely overhauled its compensation plan with one that offers a business model built on compliance, simplicity, and incentives for proper Associate behaviors that will build long-term and profitable businesses.
“Our new compensation plan is easy to understand and share while giving our Associates a clear path to building successful and sustainable businesses,”
said Alfredo “Al” Bala, CEO and President of Mannatech.
Louis and Leone with South African Mannatech leaders
“Mannatech is widely recognized for having the highest quality, science-backed products, and now our opportunity will match our products.
Our new compensation plan will make sure those who
Hot Business News Today
China Goes After Pyramid Schemes – Media Mix It With Network Marketing
by Ted Nuyten • • 0 Comments
According to an article in – GoKunming- Southwest China’s largest and best English-language website – dozens of Pyramid leaders have been arrested.
The article:
“The headlines have been loud and slightly hysterical recently. The cover story of popular magazine Caixin features the gaping jaws of a great white and the words “Man Eaters” .
It turns out this sort of hyperbole is not about imminent shark attacks, but instead concerns the predatory pyramid schemes — sweeping across the country and bilking millions out of their hard-earned money.
Beijing recently stepped in after police uncovered scam after scam in nearly every corner of the country.
Marshaling the combined bureaucratic power of the ministries of Labor, Education, Commerce and Public Security, the ‘National Crackdown on Multi-Level Marketing Schemes’ is effective now and runs until November 15.
Pyramid schemes designed to defraud or swindle people out of money have been against the law in China since the 1990s. They were officially criminalized following the discovery of a string of large-scale operations in 2009. Since then, similar news stories sporadically appeared and then public interest would quickly ebb.
China arrest dozens of Pyramid ring leaders
However, over the past several weeks, four deaths circumstantially linked to separate MLMs operating in Tianjin and
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5Linx Executives Declined An Offer By The USA Federal Government
by Ted Nuyten • • 0 Comments
The three men accused of stealing $4 million from the investors of a company they founded, walked out of federal court Monday saying they are ready to go to trial.
The three top executives of 5LINX – Craig Jerabeck, Jeb Tyler and Jason Guck – declined an offer by the federal government. The next step is for prosecutors to take this case to a grand jury to decide what, if any, criminal charges should be considered.
Defense attorney, Matt Parrinello said they have a strong case to prove.
“We think it is in our best interest to have the case go to grand jury and proceed forward ultimately with a trial,” Parrinello said. “Our clients are anxious to get this case moving and moving along – their reputations are at stake.”
Jerabeck, Tyler and Guck are all charged with wire fraud and conspiracy. The feds say the 5LINX executives stole $4 million from investors between 2009 and 2015.
A federal complaint claims the men set up fake shell companies, and added themselves as contractors to be paid directly.
However, defense attorneys paint a far different picture, saying the three executives did not commit fraud, but were rather the victims of greedy investors.
“This is a story about
Hot Business News Today
Market America Sued For Fraud And Pyramid Allegations
by Ted Nuyten • • 0 Comments
According to an article in Court House news:
Two distributors for Market America claim the company’s $7.3 billion valuation comes from millions of people who have lost money after enrolling in the pyramid scheme, including Chinese-Americans whom the company targets to sell products to relatives in Asia.
Chaunjie Yang and Ollie Lan sued Market America and its founders James Howard Ridinger, Loren Ridinger, and president and COO Marc Ashley in a federal class action on Tuesday.
The racketeering lawsuit says that while the executives tell distributors they can earn more than $560,000, only those at the top make that kind of money.
Ninety percent of sellers do not receive a penny, according to the lawsuit.
“According to Market America, the only way to fail under Market America’s business model is to quit. Meanwhile, Market America and its confederate conspirators now assert a business valuation of $7.3 billion that they have made off the backs of millions of people in their pyramid,”
the class claims in the lawsuit.
Yang says he handed over $35,000 to Market America and eventually lost money in the venture. He says in the lawsuit that people enrolling in the scheme have to pay a $399 startup fee and $129 a month.
Market America
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German Regulator Freezes IMS – An OneCoin Company For Unauthorized Payment Services
by Ted Nuyten • • 0 Comments
The BAFIN in Germany regulates financial transactions and according to a German press release, Bafin ordered InternationaI Marketing Services – a OneCoin company – to freeze and cease its operations in Germany as the company did not and does not have the required authorization for finincial transactions.
The order may still be subject to judicial review.
BaFin is one of the largest financial supervisory authorities in Europe. With its more than 2,600 employees, BaFin takes an industry-appropriate and risk-oriented approach to supervision on the basis of recognised European supervisory standards.
As an integrated financial supervisor for the banking, securities and insurance sectors, BaFin ensures the stability of the largest financial market in continental Europe.
BAFIN did not judge the Direct Sales compensation plan:
BaFin does not have the right to decide as to
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Supreme Court Of India Rules In Favor Of QNET
by Ted Nuyten • • 0 Comments
In a major development the Supreme Court has ordered a stay on all further proceedings against direct selling company QNET and its franchisee Vihaan Direct Selling Pvt Ltd (Vihaan).
It fundamentally also granted bail to its Indian shareholders Michael Ferreira and Malckolm Desai. QNet, which has been under investigation since 2013, views this with positivity thereby.
The order comes at a timely moment given the backdrop of the model Direct Selling Guidelines issued by the Ministry of Consumer Affairs for proper functioning of Direct Selling companies in India.
In an interim order, a two-judge bench comprising Mr. Justice Pinaki Chandra Ghose and Mr. Justice Rohinton Fali Nariman categorically stayed all FIRs against the business of QNET in India.
The Supreme Court has also stayed further proceedings in all 19 FIRs against the company across India.
As