Thomas Ritter is an associate attorney at Thompson Burton. His practice area focuses primarily on business transactions and direct selling law. As MLM attorney has published an awesome article about the “Pay to Play” dilemma in MLM or Network Marketing.
The short version: Companies cannot require their participants to buy inventory as a condition to participation…..
Thomas Ritter:
“When I sense a gap in the industry’s understanding on an issue, I see it as an opportunity to learn more and write content that sets the record straight.
I’ve been fielding a lot of questions lately on the subject of whether a company can require monthly product purchases as a condition for pay plan qualification. When I give the answer, I’m sometimes met with surprise.
They’ll often say, “They’re doing it over here and over there…..are you telling
Tag Archive for MLM Lawsuits
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Youlab Global’s Relationship with Demond Crump Ends
by Ted Nuyten • • 0 Comments
According to a YouLab Global press release: “Crumps suspended for alleged misconduct”
On Monday, January 18, 2016, Youlab Global suspended Independent Executive Demond and Qiana Crump, pending a complete investigation of reports of misconduct in violation of the company’s policies and procedures.
Subsequently, Youlab Global and the Crumps parted ways as of January 19, 2016.
CEO and President, John de Vries, issued the following statement regarding the separation:
“Youlab Global is built on integrity and honesty. Although things did not work out, we wish Demond and Qiana the best in their future endeavors. This is an exciting time for Youlab Global and we would like to thank each and every one of our Executives for an amazing 2015.
Their hard work, commitment and loyalty have been remarkable and we look forward to a prosperous 2016 kicking off
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TelexFree – Sann Rodriques in Jail
by Ted Nuyten • • 0 Comments
One of the top promoters in TelexFree Inc.’s alleged $3 billion pyramid scheme is being held in a Florida jail on a contempt charge, after failing to return assets including cars and cash that securities regulators had frozen.
Sanderley Rodrigues de Vasconcelos, known more widely as Sann Rodrigues, was arrested in May on visa fraud charges and has been home under electronic surveillance awaiting trial. But he was arrested Thursday and is now in custody in Tampa, according to federal officials.
A judge in the Securities and Exchange Commission’s civil case against Rodrigues in December held him in contempt for violating the terms of his release on bail.
He had been given a deadline of Jan. 15 to return $233,473 transferred out of his bank accounts, as well as proceeds from the sale of a
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Lawsuit: Former 5Linx President Craig Jerabeck – Fraud Accusations
by Ted Nuyten • • 0 Comments
According to an article in the Democrat & Chronicle, an USA Today company, former 5Linx President Craig Jerabeck joined Paycation and offered Business Development Deals to 5Linx leaders and lying to creditors.
The Democrat & Chronicle:
“One of the Rochester-area’s fastest growing companies is embroiled in a legal imbroglio between current and former management, with allegations ranging from the cherry-picking of successful sales employees to lying to would-be creditors about company finances.
5Linx Enterprises, a highly successful network marketing company that sells everything from nutritional supplements to coffee to wireless security systems, last year sued former company President Craig Jerabeck, who left the company in September.
The lawsuit alleged that Jerabeck breached a contractual pact by enticing a number of 5Linx top employees to join him at a new venture. Jerabeck has responded that he did not solicit
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USA – FTC vs Network Marketing Industry: Defense Fund Formed
by Ted Nuyten • • 0 Comments
Network Marketing Icon Richard Bliss Brooke has taken the initiative to launch a Defense Fund as the FTC (Federal Trade Commission) attack on Vemma is considered by many as an attack on the Network Marketing industry and the FTC has very deep pockets….
Richard Bliss Brooke:
This letter is an industry wide call to action: a call to arms if you will.
Obviously we all need to take a hard look at our business practices and make the customer the king. But what we need to do right now as well is ensure that Vemma prevails in its case with the FTC on the issues that the FTC has taken the liberty to get totally wrong… like “who should be considered a customer” and due process vs. a police state.
“One of our own” deserves
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Central Bank Warns About EmGoldEx
by Ted Nuyten • • 0 Comments
EmGoldEx has NOTHING to do with MLM or network Marketing…… however they are using it as tool to attract investors, giving our industry a bad name.
According to an article in the newspaper Curaçao Chronicle the central bank of Curaçao has put out an official warning against EmGoldEx.
In 2015 the SEC of the Philippines put out a Ponzi warning against EmGoldEx.
In 2014 the USA – Massachusetts Securities Division civilly charged four alleged promoters of EmGoldEx operating in that state.
The central bank of Curaçao:
” There is a large illegal investment company active in Curaçao. This is according to a warning emitted by the Central Bank of Curaçao and Sint Maarten.
EmGoldEx offers investments in gold, but does not have permission or authorization to do so. According to a representative of the Central Bank, they do
Hot Business News Today
Vemma vs FTC – $2 Million in Sales Despite Major Challenges
by Ted Nuyten • • 0 Comments
In Network Marketing “Never Quit” is an often used saying, if one person proves to be King of “Never quit” it is Vemma’s CEO BK Boreyko.
Vemma Nutrition Company and Vemma International Holdings, Inc. (Vemma) has submitted on 15 december a quarterly report to the judge describing Vemma’s business operations over the past three months.
Respect for CEO and Founder BK Boreyko as he stated in the report:
“Vemma believes that it is successfully working through the backlog of issues created by the Receiver’s shutdown of the business, and will be able to operate in a profitable manner.
Although few companies have recovered from an ex parte asset freeze and the appointment of a Receiver, Vemma is proving to be the exception based on customer loyalty and demand for its innovative nutritional products”.
Since Vemma resumed
Hot Business News Today
Vemma vs FTC – $2 Million in Sales Despite Major Challenges
by Ted Nuyten • • 0 Comments
In Network Marketing “Never Quit” is an often used saying, if one person proves to be King of “Never quit” it is Vemma’s CEO BK Boreyko.
Vemma Nutrition Company and Vemma International Holdings, Inc. (Vemma) has submitted on 15 december a quarterly report to the judge describing Vemma’s business operations over the past three months.
Respect for CEO and Founder BK Boreyko as he stated in the report:
“Vemma believes that it is successfully working through the backlog of issues created by the Receiver’s shutdown of the business, and will be able to operate in a profitable manner.
Although few companies have recovered from an ex parte asset freeze and the appointment of a Receiver, Vemma is proving to be the exception based on customer loyalty and demand for its innovative nutritional products”.
Since Vemma resumed
Hot Business News Today
Banners Broker CEO Chris Smith And Rajiv Dixit Arrested In Canada
by Ted Nuyten • • 0 Comments
The Mass Marketing Section of the Toronto Police Service Financial Crimes Unit is a member of the Toronto Strategic Partnership against Cross-Border Fraud.
The partnership represents a combined enforcement strategy, specializing in the investigation of mass marketing fraud in, or originating from within the province of, Ontario with cross-border implications.
In January 2013, the Financial Crimes Unit started an investigation into an alleged pyramid scheme.
The Toronto Police Service was assisted by investigators from the RCMP, Competition Bureau of Canada, Ministry of Government and Consumer Services, Ministry of Finance, U.S. Federal Trade Commission, FINTRAC, and the Canada Revenue Agency.
It is alleged that:
– Between October 2010 and March 2013, a pyramid scheme known as “Banners Broker” was operated out of a Church Street address in Toronto
– The scheme offered participants the opportunity to double
Hot Business News Today
Vemma Compensation Plan Signed Off By The FTC
by Ted Nuyten • • 0 Comments
According to an email to Vemma’s distributor base a revised compensation plan is in place.
We have reached out the BK Boreyko, CEO Vemma, and he stated the FTC (Federal Trade Commission) signed off the rules.
Basically, 51% of sales has to come from customers, if not, a distributor will not get any bonus. We expect other USA based network marketing companies with similar compensation plans as Vemma had in the past, will implement the 51% rule.
Vemma:
“We appreciate your patience as we have restarted operations and want to give you a quick update on our Compensation Plan.
We have attached a link to the new Compensation Plan as well as the revised Terms and Conditions. These documents are also available at Vemma.com. We expect December 2, 2015 to be the first day