13 Jan

More on the Endless Chain Recruitment Scheme of Medifast and Take Shape For Life

UPDATE: On February 17, 2010, Medifast Inc. filed suit in US District Court, Southern District of California, alleging defamation, violation of California Corporations Code, and unfair business practices. On March 29, 2011, Judge Janis Sammartino dismissed all of Medifast’s claims against me in her ruling on my anti-SLAPP motion.

Yesterday I referenced a new report on Medifast and Take Shape For Life by multi-level marketing expert Robert Fitzpatrick.. Here is more from his report. I want to highlight these things because they’re the facts that many pushers of MLMs will never tell you.

Those recruiting for MLMs are quick to tell you about how much you can make if you sell their product (often glossing over the fact that you’ll have to recruit new people into the scheme in order to have any chance of making a living), but they will never tell you that it’s next to impossible. They forget all the reasons why people in these MLMs are selling so few products and making so little money from selling. Read More

12 Jan

Medifast Multi-Level Marketing Scheme Called Into Question By Expert

tsfl_logo_header
UPDATE: On February 17, 2010, Medifast Inc. filed suit in US District Court, Southern District of California, alleging defamation, violation of California Corporations Code, and unfair business practices. On March 29, 2011, Judge Janis Sammartino dismissed all of Medifast’s claims against me in her ruling on my anti-SLAPP motion.

Robert FitzPatrick, a multi-level marketing expert known around the world for his analysis of the business model, has released a report on Medifast Inc. (NYSE:MED) and its Take Shape For Life division. TSFL is the multi-level marketing arm of the weight loss company, and is the force behind the company’s overall increase in revenue.

FitzPatrick writes: Read More

11 Jan

Could New Regs Bring More Lawsuits?

Proposed regulatory reforms in Congress could reverse the recent dip in securities class-action filings.

Sarah Johnson – CFO.com | US

The number of securities class-action claims made in 2009 declined 24% from the previous year, according to a recent study by the Stanford Law School Securities Class Action Clearinghouse and Cornerstone Research. A total of 169 claims were made in 2009, compared with 223 in 2008. However, the dip could be short-lived, depending on the outcome of regulatory-reform bills working their way through Congress. Read More

07 Jan

Fraud Case Feeds Sarbox-Exemption Critics

Could an alleged $31 million fraud at a company that reported $38 million in sales last year quash claims that internal-controls checks don’t matter?

Sarah Johnson – CFO.com | US

A finance executive’s alleged embezzlement of as much as $31 million over five years from headphone-maker Koss Corp. could serve as fodder for critics of legislation that would permanently exempt smaller publicly traded companies from fully complying with the Sarbanes-Oxley Act. Read More

06 Jan

Koss Fraud: Losses Higher, Grant Thornton Fired, Baker Tilly Virchow Krause Hired

kossI’ve had plenty to say about the massive fraud Koss Corp has suffered at the hands of their Vice President of Finance, Sue Sachdeva.

In this news story from Milwaukee’s ABC affiliate, WISN 12, I talk about how a company with annual revenue in the $40 million range can fall victim to a fraud loss of $31 million (current estimate, up from original estimate of $4.5 million and first revision of $20 million): Read More

05 Jan

Embezzlement Scandal Grows in Koss Case

The case of the alleged $31 million embezzlement by Koss Corp. Vice President of Finance Sue Sachdeva continues to shock many. How does a company with annual revenue in the $40 million range lose such a large amount of money over a 5 or 6 year period?

In this interview with Milwaukee’s ABC affiliate, WISN 12, Tracy Coenen talks about the autonomy Sachdeva apparently had at Koss, and how that facilitated the fraud and the cover-up. Read More

03 Jan

Overstock.com and Patrick Byrne Caught in Another Lie

liarliarOverstock.com (NASDA:OSTK) is truly the gift that keeps on giving if you are a fraud investigator. The company and its wacky and incompetent CEO Patrick Byrne have been caught in yet another lie.

The antics of Overstock, Byrne, and paid stalkers Judd Bagley and Mark Mitchell have been documented over and over. I’ve really only touched the surface of this issue. Journalist Gary Weiss and reformed criminal Sam Antar have documented all the gory details. Read More

01 Jan

Koss Embezzlement Highest of ’09

Rich Kirchen – Business Journal of Greater Milwaukee

Sue Sachdeva clearly had gained the confidence and trust of Koss Corp.’s top management and she allegedly used that relationship to commit possibly the nation’s largest corporate embezzlement case of 2009.

The Milwaukee-based stereophone designer and marketer had allowed its longtime vice president of finance to telecommute from Houston in the mid-1990s when she moved there with her physician husband, Ramesh Sachdeva. After relocating back to metro Milwaukee, she worked from her Mequon home two days per week as of late 2007. Read More