29 Aug

Acquisition by Usana Health Sciences Gets Them Into China (Legally, This Time)

A few years ago, I was involved in an investigation of multi-level marketing company (MLM) Usana Health Sciences (NASDAQ:USNA).  One of the allegations that came out during that investigation was that Usana was illegally conducting business in China. China has strict laws against multi-level marketing, making it impossible for the company to do business there under its current MLM model.

Usana had legitimate business operations set up in Hong Kong, which does not have laws prohibiting multi-level marketing activities. It was alleged that Usana was using the Hong Kong employees to get access to people from mainland China, and show them how to circumvent the laws to participate in MLM. Read More

16 Aug

Another Reason Why More Anti-SLAPP Legislation Is Needed

Michael Tanczyn of Medifast

Medifast General Counsel Michael Tanczyn, Esq. at the deposition of Sam Antar. (click to enlarge)

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.

I am currently on the receiving end of a SLAPP suit, thanks to my good friends at Medifast (NYSE:MED) and their scam-like pyramid-like multi-level marketing division Take Shape For Life (TSFL).

SLAPP = Strategic Lawsuit Against Public Participation

It goes like this… Someone criticizes your company. You get mad. You decide to use your millions or billions of dollars to shut them up. But more importantly, it shuts up anyone else who would dare to criticize you or your company, lest they should also be on the receiving end of a lawsuit they can’t afford to fight. Read More

14 Aug

MonaVie Lawyers Are Again Threatening Critics

These stories never get old. People criticize multi-level marketing in general, and particular MLMs specifically, and the lawyers come running. They cry that the bloggers are saying bad things about their companies, and that can’t be allowed to happen. Mona Vie doesn’t want you to know that their distributors are losing money left and right and the overall financial health of the company is being questioned.

None of the MLMs want us saying anything bad about the companies, especially if it’s true and might harm their recruiting efforts. Read More

11 Aug

Questions Raised About the Figures Reported in USANA’s SEC Filings

USANA Watchdog  just posted an article this morning which questions the active associate count of USANA Health Sciences (NASDAQ:USNA) and whether there is illegal recruiting of associates in China. Watchdog’s analysis of the numbers found some very curious things:

  • Associates in Hong Kong have increased by 300% in the last three years, when the rest of the territories have seen decreases.
  • Hong Kong has 1 associate for every 135 citizens. The market is either completely saturated or completely fabricated. Watchdog draws the conclusion that the associate count for Hong Kong more likely includes recruits from mainland China (where recruiting for MLMs is illegal). Read More
10 Aug

Penn & Teller on Multi-Level Marketing and Pyramid Schemes

Last month, Penn & Teller’s Showtime show Bullshit! featured multi-level marketing. They did an excellent job of hitting the high points on why MLMs almost guarantee failure for all the participants. Sure, there will be a couple of people at the top of the pyramid that make money, but that’s only because hundreds or thousands below them have lost money.

Lost money? Yes, MLM is all about losing money. They use a product as a “front” to hide this money transfer and make the scheme appear to comply with the law. But the products are of dubious quality, and significantly overpriced. MLMs aren’t really selling a product, they’re selling an “opportunity,” one in which almost everyone loses.

Here are some highlights from the episode: Read More

07 Aug

United First Financial is Being Shopped to Private Equity Groups

Recently, the cat has been let out of the bag that UFirst Financial, the company selling the worthless “Money Merge Account” software via a multi-level marketing business model is on its last legs.  Top members of the salesforce are plotting how to oust other sales people and keep the profits for themselves. The numbers show that about 75% of MMA’s users have stopped using the software.

Now the news is that the powers that be at United First Financial are shopping the company to private equity groups. Of course, they don’t want anyone to know…. especially not their sales force.  The ship is sinking quickly, and the owners are trying to offload the company before there is nothing left to sell.

Here’s the note that recently went to upper management at U1st Financial: Read More