Thompson Burton: Support Company of the Year from Academy of Multilevel Marketing


lolThompson Burton, a law firm providing services to multi-level marketing companies, provides our comic relief today, along with “The Academy of Multilevel Marketing” (TAMM).

The Academy of Multi-Level Marketing is an organization created by MLM industry supporters to make up some awards to give legitimacy to those involved in the grand scam that is called multilevel marketing, direct sales, network marketing, or other clever names (generally used to disguise the fact that these companies are nothing but endless chain recruiting schemes).

The multi-level marketing industry is no stranger to ruses that make it look legitimate. The Direct Selling Association (DSA) that has held itself out as an MLM industry watchdog. In fact, it is essentially a lobbying organization whose job is to convince lawmakers to keep their scams legal. And so it follows that “TAMM” would give out silly awards to those who perpetuate multi-level marketing scams. Continue reading

Marc Randazza Free Speech Win for Dr. Steven Novella

Marc Randazza, The Legal Satyricon

Marc Randazza of Randazza Legal Group, First Amendment Attorneys

First Amendment attorney Marc Randazza of Las Vegas has scored a particularly important win in a case involving Steven Novella, MD and Edward Tobinick, MD. Dr. Tobinick sued Dr. Novella and Yale University in Florida, not for defamation, but for claims of false advertising and trademark infringement.

First, Randazza won an anti-SLAPP motion. Despite being a California plantiff, Tobinick filed suit in Florida. He may have hoped that California’s anti-SLAPP law wouldn’t follow him there. He would have been wrong. From the order (emphasis mine): Continue reading

Herbalife $HLF CEO Michael Johnson on Recruiting


michael-johnson-herbalife-recruitingLast week a video was posted to YouTube showing Herbalife CEO Michael Johnson talking about recruiting. Herbalife had the video pulled from YouTube on the basis of copyright infringement. That is most certainly a bogus claim. I’m not an attorney, but I’m smart enough to understand the concept of fair use:

In its most general sense, a fair use is any copying of copyrighted material done for a limited and “transformative” purpose, such as to comment upon, criticize, or parody a copyrighted work. Such uses can be done without permission from the copyright owner. In other words, fair use is a defense against a claim of copyright infringement. If your use qualifies as a fair use, then it would not be considered an illegal infringement.

The clip was a part of a longer video (about 71 minutes long) was first reported on in June 2015 by Michelle Celarier at the NY Post. The video clip posted last week was about a minute and a half long, and it was posted in order for people to comment upon it. No one was trying to steal some copyrighted materials from Herbalife and infringe on that copyright. Instead, the whole point was to expose what Michael Johnson said about Herbalife’s recruiting.

So why would Herbalife want to make a bogus copyright claim? Because the clip of CEO Michael Johnson put the company in a really bad light. And we can’t have that! Continue reading

Herbalife Report: “Pyramid Shakedown”


herbalifeThis week New York State Senator Jeff Klein and Public Advocate Letitia James issued a scathing report on multi-level marketing company Herbalife (NYSE: HLF). The report, The Amercian Scheme: Herbalife’s Pyramid ‘Shake’down, is based on complaints filed by 56 Herbalife victims. It definitively calls the company a pyramid scheme and highlights the company’s deceptive practices.

The key findings include:

  • Since 2004, only 56 Herbalife victims in New York have been brave enough to file complaints against the company. Most victims are afraid of betraying family, friends, and neighbors.
  • The 56 victims that have filed complaints reported nearly $1 million in financial losses ranging from $90 to $100,000. The average amount loss was approximately $20,000.
  • Over 60 percent of new members make initial investments larger than the required $60 to $100 for the new member kit. The average initial investment is $1,800, but some are as high as $10,000.
  • Herbalife distributors purport that supervisors can make as much as $20,000 in monthly income.
  • Of 56 complaints analyzed, only eight victims received a check directly from Herbalife for their royalty claims. The average amount was $100.

Continue reading

Roca Labs Brief of Amici Curiae and Preliminary Injunction


roca-labs-lawsuitLast week Yelp, AVVO, and Mediolex filed a Brief of Amici Curiae in the FTC case against Roca Labs Inc. The brief was filed in advance of a hearing on the FTC’s motion for a temporary restraining order against Roca Labs.

Last month the FTC filed an action against Roca Labs, Don Juravin, and George Whiting based on Roca’s alleged use of deceptive and unfair advertising and unfair use of gag clauses in their sales contracts (coupled with threats and lawsuits aimed at stopping consumers from making complaints about their products or practices).

You can read the full text of last week’s brief here. Among other things, the brief highlighted the following points: Continue reading

Advocare: What You Should Know


Written by: Advocare Facts

AdvoCare is a multi-level-marketing company (MLM), founded in 1993 by Charles Ragus. Charlie once worked as a regional vice president for Fidelity Union Insurance while being a distributor for Herbalife. In 1989 Charlie co-founded Omnitrition International. Similar to AdvoCare, Omnitrition sold nutritional supplements, vitamins and skin care products. Charlie sold out after only a few years when Omnitrition became embroiled in controversy for being a pyramid scheme. The resulting lawsuit, Webster v. Omnitrition International Inc has become a landmark case in the MLM industry.

AdvoCare claims to provide physical and financial wellness through the sale of sports performance, nutritional, weight control, and skincare products (AdvoCare). Similar to other MLM companies, such as Mary Kay, Vemma, and Herbalife, they recruit distributors to sell their products via word of mouth and face-to-face sales, all the while promoting the idea that wealth and success can be obtained by anyone that adheres to their business model. Continue reading

Another Roca Labs Smackdown


loca-rocaThings couldn’t get any worse for villain of the year, Roca Labs. This company sells industrial goop, designed to help you pretend you’ve had gastric bypass surgery. Never mind the consistency of it, the potential dangers to your body, or the untruths in the company’s marketing.

Roca Labs wasn’t a fan of consumers telling other consumers what crap their products were. So the company sued Consumer Opinion Corp (which runs the site Pissed Consumer). Roca Labs also sued some consumers of its products for reporting them to the Better Business Bureau and writing negative reviews. Then people started drawing attention to the issue, a Roca freaked out, threatening to sue bloggers and journalists who wrote about them. Then they sued Consumer Opinion Corp’s attorney, Marc Randazza. Then they sued me for daring to suggest that they were running a fraud on consumers.

Well, thanks to all the attention Roca Labs brought to themselves… Last month, Roca Labs was sued by the FTC for deceptive claims and more.  This week, Roca Labs lost its lawsuit against Consumer Opinion Corp. And Roca lost in the most awful of ways… on summary judgment. Continue reading

Consumers Looking for a “Good” MLM


psaRobert FitzPatrick of Pyramid Scheme Alert is bombarded every week by consumers who want to ask him, “What about this MLM?”

You see, the marketers of multi-level marketing companies have gotten very savvy. They know that plenty of us have figured out their con game. They now have consumers convinced that theirs is “one of the good ones.” They’ve convinced consumers that they’ve seen the “bad” MLMs, and that theirs is surely one of the “good” MLMs. (Yet they never tell consumers which ones are the “bad” ones, do they? Why is that?) Continue reading

MLM “Top Earners”: Making Money Off the Backs of Others


Do you think it’s only the “bad” people who do bad things in multi-level marketing? Those who frontload new recruits, dial for dollars at the end of the month (i.e. get people to order products they don’t need), talk only about their highest commission check, lie about how profitable the MLM is for them, or hide the debt they incurred via their MLM?

Unfortunately, these problems are systemic in multi-level marketing. These are the things that must be done to get to the upper levels and to stay there. What about those “national sales directors” or “diamond executives” or “founders sapphires”??? They’ve just done more frontloading and general deception. They all lie. It is how things are done in MLM.

Listen to this former Mary Kay sales director, who was only a step away from becoming an national sales director when she walked away. On ABC’s 20/20, she explained how her “success” was at the expense of other women.

Roca Labs Sued by FTC for Deceptive Claims and More


Today the Federal Trade Commission filed suit against Roca Labs Inc., Roca Labs Nutraceutical USA Inc., Don Juravin, and George Whiting. The FTC is going after them for deceptive claims and more. Here is the complaint filed in the Middle District of Florida.

You may recall that Roca Labs sued me in November for defamation. The company sued me because I stated that they made false claims about their products. It’s interesting that the FTC seems to think that Roca is perpetrating a scam against consumers, just as I suggested in several articles about the company.

I will let the complaint speak for itself, but draw your attention to these parts (emphasis mine): Continue reading