Medifast Files Lawsuit, Fraud Discovery Institute Reopens Investigation

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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.

On Tuesday, Barry Minkow and the Fraud Discovery Institute issued a press release stating they were ending their investigation of Medifast Inc. (NYSE:MED) in order to focus on other companies.

One day later, Medifast filed a defamation suit in California against Minkow, FDI, Robert Fitzpatrick, William Lobdell, iBusiness Reporting, me, my company Sequence Inc., and an anonymous message board poster. The suit seeks general damages of $270 million, plus other damages. Continue reading

Usana Health Sciences Knows it Products are Being Sold Illegally in China

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Almost three years ago, Barry Minkow and Fraud Discovery Institute released a report on Usana Health Sciences (NSDAQ:USNA), listing ten red flags of fraud he and his team (which included me) uncovered about the company. The report criticized the company’s business model, essentially calling it a pyramid scheme in which recruiting is the focus (rather than the actual sale of products) and pointing out how little money Usana distributors actually make.

For example, the company touts average income of $802.62 per North American distributor per month. But that’s very misleading. The income is very top-heaving, meaning a select handful at the top of the pyramid make a lot, and almost everyone else makes nothing. Further, this is gross income, not net. Associates have to pay all their business expenses out of this, leaving them with much less at the end. Continue reading

InterOil’s Senior Manager for Media Relations Sends Email Threats to Fraud Discovery Institute Co-founder

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Press release issued by Fraud Discovery Institute.

FDI demonstrates that InterOil (NYSE:IOC) selectively excludes certain issued press releases from regulatory filing

Susuve Laumaea, Senior Manager for Media Relations at InterOil (NYSE:IOC) in Papua New Guinea has issued at least two press releases on behalf of InterOil Corporation dealing with material exploration operations in PNG, but neither of these official company press releases were filed with the Securities and Exchange Commission, nor do they appear on the company website. In addition, at least one other item appearing to be a press release regarding InterOil and authored by Laumaea has been published on a Papua New Guinea blogger’s website. Continue reading

Fraud Discovery Institute Blasts Medifast

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medifraud.netUPDATE: 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.

In a surprise move, the company known for its outspoken criticism of the direct selling industry, the Fraud Discovery Institute, Inc today released a report portraying direct seller Avon Corporation in a positive light (www.frauddiscovery.net).

To prove that Medifast, Inc (NYSE:MED) is a “scheme pyramid” business opportunity as evidenced by its record breaking first quarter earnings in the middle of a recession, the Fraud Discovery Institute, Inc enlisted the help of nationally recognized expert Robert Fitzpatrick, who issued an 11 point comparison between Medifast and Avon showing Medifast comes up short.
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Lennar Corporation (NYSE:LEN) Confirms Fraud Allegations; Debunks Own Lies

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In an interesting twist in the case of the Barry Minkow (Fraud Discovery Institute) fraud investigation of Lennar Corporation (NYSE:LEN)… it appears that Lennar itself has debunked the company’s own lies.

In a new report released today, FDI lays out the original fraud allegations, the lies Lennar used to cover up, and the new admissions which prove the initial allegations were true (and Lennar’s cover up was full of lies).

Here are the details: Continue reading

Lennar CEO Stuart Miller: Transparency? Or lies?

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On Friday, Stuart Miller, the CEO of Lennar (NYSE:LEN) went on CNBC to respond to fraud allegations made by Barry Minkow and Fraud Discovery Institute. But did he really respond? Do you feel he is being transparent? Or is he creating more lies in response to the damaging report?

You be the judget. Here’s the transcript of the relevant portion of the interview: Continue reading

Lennar CEO responds to Barry Minkow and Fraud Discovery Institute

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Early today, Barry Minkow and Fraud Discovery Institute released a report on Lennar Corporation (NYSE:LEN), highlighting what the authors believe to be ten red flags of fraud at the company. Lennar’s stock was hit hard by the news.

It didn’t take long for Lennar’s CEO Stuart Miller to speak out against the allegations. About all he was able to do, however, is try to discredit the messenger. Lennar didn’t have any substantive response to any of the allegations, they simply highlighted Barry’s well-known criminal past and referred to Nicolas Marsch (Barry’s client) as a “disgruntled litigant.” Continue reading

Barry Minkow and Fraud Discovery Institute release proof of James Peterson’s (Microsemi Corp) lies

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Last week, Barry Minkow and Fraud Discovery Institute announced that James Peterson, the CEO of Microsemi Corp (NASDAQ:MSCC) had neither the bachelor’s degree nor the master’s degree he claimed in numerous SEC filings.

That revelation was followed with more lies by Peterson, as well as a statement by Microsemi’s board of directors that they did not care if Peterson lied. Continue reading

James Peterson expands the lie; Microsemi board doesn’t care

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Corporate Governance 101: You need ethical people running your company. And that means ethical in all regards. Microsemi Corp. (NASDAQ:MSCC) doesn’t think honest executives are necessary.

On Wednesday, news stories broke about the fact that James J. Peterson, CEO of Microsemi lied about his credentials. Specifically, Peterson claimed he had a bachelor’s degree in business and a master’s of business administration, both from Brigham Young University. The school has confirmed that Peterson did take classes from 1978 to 1980, but he never received either degree. Continue reading