The Wall Street Journal ran a story this morning about another product-based pyramid scheme, Mannatech. The company is a typical multi-level marketing company (MLM). They have a product (generally overpriced and of marginal quality), but the “real” business is in recruiting new distributors.
Mannatech is currently facing scrutiny for health claims made by distributors. According to the article:
In the eight years since Mannatech went public, several questions have loomed large for company executives and board members: Are nonemployee salespeople pushing its products in ways that violate Food and Drug Administration guidelines? And how far should Mannatech go in policing its free-lance sales force?
About half of Mannatech’s supplements, the company says, contain nutritional sugars it calls “glyconutrients.” The body needs simple sugars, but some scientists say there is no proof that sugar supplements provide health benefits. Mannatech say its glyconutrient mixture, called Ambrotose, “supports the immune system.” Because none of the products are approved by the FDA for the treatment of disease, it isn’t legal for anyone to market them as such.
Mr. Huffman, who sold $1,200 of Mannatech products to Ms. McHenry, says he doesn’t recall telling her they would “knock her cancer away.” He adds, though, that “in many instances,” Ambrotose “encapsulates the cancer.”
Ms. McHenry consumed the tablets and powder for two weeks last year, she said, until nausea made them difficult to swallow and her oncologist persuaded her to quit. Mr. Huffman says he returned her $1,200 to alleviate hard feelings. Ms. McHenry died on April 20.
Mannatech’s CEO, Sam Caster, says the company is doing nothing wrong:
Mr. Caster says the consumer testimonials are perfectly legal because none use the words “cure,” “treat” or “mitigate” in referring to diseases. Mannatech product labels, which are reviewed by the FDA, state that the products are “not intended to diagnose, treat, cure or prevent any disease.” Mr. Caster says that message is repeated frequently during conference calls with associates. He says he and the company abide by all laws, and train associates to do the same.
Read the story for more on the testimonials about illknesses cured by Mannatech products and the religious connection.