{"id":979,"date":"2007-09-13T16:09:06","date_gmt":"2007-09-13T22:09:06","guid":{"rendered":"http:\/\/www.sequence-inc.com\/fraudfiles\/2007\/09\/13\/an-excellent-analysis-of-the-demise-of-usana\/"},"modified":"2011-10-31T21:49:39","modified_gmt":"2011-11-01T02:49:39","slug":"an-excellent-analysis-of-the-demise-of-usana","status":"publish","type":"post","link":"https:\/\/www.sequenceinc.com\/fraudfiles\/an-excellent-analysis-of-the-demise-of-usana\/","title":{"rendered":"An Excellent Analysis of the Demise of Usana"},"content":{"rendered":"<p><a href=\"http:\/\/www.sdreader.com\/php\/cityshow.php?id=1705\">An article today on SanDiegoReader.com<\/a> does an excellent job of highlighting what&#8217;s been happening with the Usana case. As if I&#8217;d ever let you forget, I will remind you that Usana Health Sciences is being investigated by the Securities and Exchange Commission for violation of securities laws.<\/p>\n<p>Their investigation was initiated based upon a lengthy report authored by Barry Minkow and <a href=\"http:\/\/frauddiscovery.net\">Fraud Discovery Institute<\/a>. Contributors to the investigation included me, <a href=\"http:\/\/pyramidschemealert.org\/\">Robert FitzPatrick<\/a>, <a href=\"http:\/\/mlm-thetruth.com\/\">Jon Taylor<\/a>, and Doug Brooks, to name a few.<\/p>\n<p>Here&#8217;s a summary of the case, with the help of the article:<!--more--><\/p>\n<ul>\n<li>Usana uses multi-level marketing to sell vitamins, but the real deal is they&#8217;re selling distributorships via pyramid marketing.<\/li>\n<li>Companies like Usana make money by recruiting new salespeople who pay a fee to become a distributor and then often buy products in order to &#8220;qualify&#8221; for commissions on people they bring into the pyramid.<\/li>\n<li>Little actual retailing of products occurs.<\/li>\n<li>60 percent of active Usana distributors do not earn commissions and 70 percent of commissions go to 3 percent of the salespeople.<\/li>\n<li>More than 45 percent of Usana&#8217;s stock is held on the Isle of Man tax haven by Myron Wentz, company founder, and is in turn controlled out of another tax\/secrecy haven, Liechtenstein.<\/li>\n<li>The issuance of the report sparked stories in the Wall Street Journal and Forbes.com.<\/li>\n<li>The SEC started an &#8220;informal&#8217; (for now) inquiry into Usana.<\/li>\n<li>Reporters confirmed an FBI investigation into Usana, but the company denies knowledge of it.<\/li>\n<li>Usana asked law enforcement to investigate Minkow, but they declined.<\/li>\n<li>Usana officials including the CFO, a board member, and members of the &#8220;Medical Advisory Board&#8221; falsified their credentials in SEC filings and other materials made public.<\/li>\n<li>Usana&#8217;s long-time auditors, Grant Thornton, resigned after a disagreement about the scope of review procedures on quarterly financial statements.<\/li>\n<li>Usana&#8217;s 2nd quarter SEC filings are delinquent (i.e. They filed financial statement that were unreviewed.)<\/li>\n<li>Morningstar reported: &#8220;We are still wary of Usana&#8217;s management team.&#8221;<\/li>\n<li>Usana accuses Barry Minkow of lying to profit from a drop in Usana&#8217;s stock price, but the truth is that he issued a fair report with evidence to back up the allegations, and any profit Barry might make on the stock won&#8217;t even come close to covering the cost of the investigation. And his stock investment was disclosed from the start. Barry did not violate any laws with this stock bet.<\/li>\n<li>Three shareholder suits are pending against Usana.<\/li>\n<li>One distributor class action suit is pending against Usana.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>An article today on SanDiegoReader.com does an excellent job of highlighting what&#8217;s been happening with the Usana case. As if I&#8217;d ever let you forget, I will remind you that Usana Health Sciences is being investigated by the Securities and [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[827,184],"tags":[52,830,1163,1389,836,917],"class_list":["post-979","post","type-post","status-publish","format-standard","hentry","category-public-companies","category-pyramid-schemes-mlm","tag-usana-health-sciences","tag-barry-minkow","tag-fraud-discovery","tag-jon-taylor","tag-robert-fitzpatrick","tag-sec-investigation"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p6Z0e-fN","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/posts\/979","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/comments?post=979"}],"version-history":[{"count":0,"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/posts\/979\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/media?parent=979"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/categories?post=979"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/tags?post=979"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}