Profit and Loss

Herbalife-Pain-in-the-Sky-Dreams

Herbalife-Pain-in-the-Sky-Dreams

Not many families can functionally recover from a five-figure loss :: but Herbalife CEO Michael O. Johnson and his family certainly could … because he’s spent the last decade profiteering handsomely from hundreds of thousands of other {much poorer} families sustaining such losses.

Pictured above {and below} are just a tiny subset of those very real people :: with their very real losses … detailed as part of a 2005 class action settlement between Herbalife and 2600 of its unlucky victims. Anyone still under the ignorant misimpression that the Herbalife story is about billionaire hedge fund managers {I’m talkin’ to you William Cohan} :: should spend a few hours reading that list of names out loud to themselves … until the stark reality of the situation starts to sink in and cause the proper level of outrage and existential crisis.

The lawsuit focused on a massive Herbalife lead generation scheme :: tastefully {and not at all fraudulently} titled … Newest Way to Wealth. Documented losses from NWTW/Herbalife victims coming forward to file claims in the case {a very small percentage of the total victims} :: greeted Johnson as he arrived on scene as Herbalife CEO … and totaled about $20 million.

It’s so much money :: spread out over so few middle class people … over such a tiny time period. These aren’t “I’m going to sell this Cookies n’ Cream powder to John Hempton on Craigs List” type of losses :: it’s more like “I’ve ruined everything … my spouse is leaving me … I want to die.”

Doug Brooks :: the attorney who brought the case … made sure that this horrifyingly realistic list of victims was preserved for the record … by submitting it as a comment to the FTC’s purposed business opportunity rule {a rule which was completely eviscerated by MLM lobbyists gone wild}. And that’s where I found it :: trolling around on ftc.gov … like all the best internet hipsters are doing now … ftc.gov is the new twitter five years ago {please retweet}.

“I was blown away.”

… is what Mr. Brooks told me :: when I asked him if he had been surprised by the scale of the losses. He’d already been fighting with the unicorns for years by that point :: having brought other protracted MLM cases … but it’s hard to get jaded enough to stop being jaw-dropped by the epic nature of these frauds.

Unless you’re Carl Ichan I guess :: he’s totally cool with it … he can just read down that list of names and tell himself that it’s all just profit and loss … ink on paper … not real people … and not real families … at least not real enough to worry about like he and his family. Fuck sympathy … and fuck empathy even harder.

A small collection of Herbalife’s top recruiting producers :: like Anthony Powell :: Doran Andry :: Steve and Debbie Combs … were said to be the assholes behind Newest Way to Wealth. The incoming Johnson could not have failed to notice the ongoing litigation :: because as the complaint notes …

[A]n attorney for individual defendants Powell and Juneja, advise Herbalife that “T.J. [Juneja] and Anthony [Powell] believe that the purchases and sales made by the 10,000-12,000 Herbalife Distributors who are affiliated with NWTW represent somewhere between one-third and one-half of Herbalife’s North American volume.

Newest Way to Wealth did the bulk of its damage towards the end of the 90’s :: and although that was before the web became the all powerful center of the universe … the scam was shaped remarkably like Shawn Dahl’s Online Business Systems. That’s because the shape of these pyramid-within-a-pyramid scams have remained little changed since the early days of Amway.

Here’s how it basically works at most old-school MLMs …

Only the owner of the MLM makes fat monies. A select group of distributors :: often selected before the launch of the scam {as is happening right now with Rippln} … will be designated to have flashy cash flows so they can shill their massive success to the masses … but they’ll only be netting decent money {think lawyer or doctor type wages} because of the high cost associated with lead production. This mostly closed group of top distributors are then allowed {although usually not formally} to sell “this is how you can succeed at MLM like me” frauducts to the people in their downline.

Selling “how to succeed” frauducts that cost many multiples of the underlying MLM front product :: is how most {if not all} top-level distributors ultimately do succeed at bringing home the fat monies. The lawsuit explained it like this …

[T]he use of Lead Generation Systems was consciously intended by Herbalife and its senior distributors (a) to permit senior distributors to use more aggressive promotional materials and methods than those previously utilized and approved by Herbalife, (b) to provide Herbalife with a plausible defense (i.e., the “over zealous distributor” defense) in the event of regulatory problems with the distributor-generated promotional materials, and (c) to enable senior distributors to supplement their income through the sale of promotional materials to their downlines, and thereby provide an additional incentive for senior distributors to remain with Herbalife.

You scratch my back :: I’ll scratch your back … and we’ll both gouge the shit out of that hispanic senior citizen’s back.

But it’s not an “additional incentive for senior distributors” :: it’s the primary way top distributors are compensated … throughout the industry. And while MLM motherships like Herbalife like to pretend it’s not the case whenever scrutiny comes calling …

It was not until shortly after the filing of this lawsuit, however, that Herbalife finally took some action to enforce its rules and contractual requirements regarding earnings claims and other misrepresentations.

… the truth is that they can’t genuinely enforce their lip service rules against top distributors without imploding the pyramid. Which is why after this case settled :: and Newest Way to Wealth was officially disbanded … all the major players involved stayed at Herbalife and continued scamming … same as fucking ever.

When Anthony Powell did finally leave the company this year :: more than ten years after the NWTW class action was filed … Duane Stanford at Bussinessweek dutifully printed HLF’s self-righteous response.

“Anthony Powell’s stated focus is on creating ‘explosive growth’ fueled by lead purchases,” [Herbalife] said in an e-mail. “As he has also stated, this is `a difference in philosophy,’ not consistent with Herbalife’s focus on building business through the daily consumption of our nutrition products.”

Herbalife has a morally pure philosophy :: starting :: right :: now … maybe.

But Doran Andry is still one of Herbalife’s top distributors :: and according to him … his “distributorship has generated over $3.2 billion in sales during the last ten years.” During that time Doran has been hawking his Financial Success System :: unimpeded by HLF’s rules or philosophies … to the more than 400,000 distributors he claims to have churned through his downline.

This is an example of the sort of blind lead generation site that Andry used to do billions of dollars worth of damage over the last ten years. It makes no mention of Herbalife :: and it’s no shit called … Hope For My Family dot com.

“Hope” might be an inaccurate way to describe catastrophic losses.

Yet somehow Businessweek’s Duane Stanford thinks he can “report” shit like this

Other top distributors have run side businesses selling sales leads and “business methods,” such as a suite of tools including chat- and sales-tracking software, to colleagues to help them boost sales. Under Johnson, Herbalife has banned distributors from owning such companies.

… while still calling himself a journalist at cocktail parties.

Here’s an HLF recruitment picture of Doran Andry’s gaudy custom built house … and exactly how he fucking paid for it.

Doran-Andry-Herbalife-House-of-Pain

>> bleep bloop

55 thoughts on “Profit and Loss”

  1. Those numbers are staggering. A lifetime of debt for snake oil sold by serpents.

    I guess every time they shed their skin, a thicker one grows.

    Their venom is deadly, but the antidote is education. We have to keep rooting them out.

  2. They getcha comin’ and they getcha goin’…they even getcha between comin’ and goin’.

    These stories awaken dormant memories of side scams my former domestic partner was sucked into when she was with Scamatech. In addition to the standard stuff–lead generation tools, training tools, canned presentations–all of which had major wallet suction power and were sold at company events as the only Scamatech-approved tools (lower level distributors were prohibited from devising their own), they charged their distributors monthly fees for online access to sales and recruiting data for their downlines. Upline data was of course, never available.

    There were three subscription levels you could choose from. The lowest level was useless for any distributor wanting access to anything but the most rudimentary data so they’d know who in their downline needed encouragement to buy more frauduct. The middle level cost, as I recall $50/month. Scamatech thereby managed to screw their distributors out of $150/month instead of the $100/month in personal purchases their IBO contracts mandated to maintain commission eligibility.

    C’mon Ackman, let’s go after all of ’em!

  3. While skimming the linked document
    http://caselaw.findlaw.com/us-9th-circuit/1139924.html
    I ran across the phrase “Pyramid schemes are destined to collapse” stated as unquestioned fact.

    There are, of course, some folks that take issue with that or else say something like, “Well if Amway, Herbalife, et. al. are pyramid schemes then why haven’t they collapsed yet?”

    I’ve seen this answered before by folks pointing out that the scam-in-question has grown large enough that it can leverage its way into other markets, including international, thereby find new as-yet-uninoculated victims to infect and leech from.

    But it seems to me this pyramid-within-a-pyramid structure is the real key.

    All these “top level distributors” hawking their side frauducts… If the FTC looks to be about to come down hard on one of them or if there’s class action lawsuits starting, Herbalie can just cut off that offending hydra-head. It’s got so many more already. And if it should ever start to run low, it can just grow some more (“top level distributors”)/heads as needed.

    Yeah maybe the naysayers are correct.

    Herbalie a pyramid? No! It’s much, much worse than that. It’s a pyramid-shaped Hydra.. that camouflages itself as an MLM.. that pretends to be a healthy nutrition company.


    Furry cows moo and decompress.

    1. @Wyrd,

      A few years ago, I was working a weekend gig in Grand Rapids, Michigan, and my boss told me the city gets a lot of money from Amway, which is headquartered there. He told me about how the big Amway case of ’79 cleaned up Amway’s internal pyramid-within-a-pyramid selling of sales training materials, which at one time were greater than their sign-up fee revenues and product sale. I can’t find any support for that in the legal info, though.

      MLM watchers, is there any truth to that story? Did top distributors’ pyramids within pyramids grow out of MLM’s internal sales of sales-training materials?

      1. @Lanna,

        The Wikipedia Amway article link didn’t quite go because Wikipedia has (IMO) sloppy guidelines for URLs. In this case: the URL has a “.” at the end.
        http://en.wikipedia.org/wiki/In_re_Amway_Corp.

        I’ve only read and skimmed about Amway. I saw this in the Wikipedia article:

        Later actions

        In 1986, Amway agreed to pay a $100,000 penalty in a consent decree for violating the 1979 ruling, after Amway placed ads that represented higher-than-average distributor earnings without stating the actual average results or percentage of distributors who actually met the represented claims.[10]

        So… basically, in ’86 they got totally caught violating the thing they said they wouldn’t do anymore in ’79. They didn’t try arguing ‘coz they knew they had no case. They just paid the $100,000.

        I think you and @Jack are a lot more well-versed in the FTC biz-opp rulez and also the stupid MLM exemption/exception that essentially makes the rule all but worthless…

        So would Amway still get in trouble if it tried to make these income claims or might it be able to get away with it under current FTC guidelines?

        And I wonder how that works in conjunction with a specific court ruling against a specific entity.


        Furry cows moo and decompress.

        1. @Wyrd,

          I am not a lawyer. This does not constitute legal advice.

          Now that that’s out of the way, let’s talk about two FTC rules that we’ve talked about over and over again:
          – the Business Opportunity Rule (16 C.F.R. Part 437) (the “New Bizopp Rule”)
          – and the Guides Concerning the Use of Endorsements and Testimonials in Advertising (16 C.F.R. Part 255) (the “Mommy Blogger Rule”).

          The New Bizopp Rule says bizopps do not have to make income claims, but when they do, they must state the number and percentage of buyers who got that result, as explained in this FTC video starting at 4:00.

          However, as explained by the ABA’s 10 Things You Need to Know About the FTC’s New Biz Op Rule, franchises and MLMs are exempt from the New Bizopp Rule.

          Let’s take a detour into franchise-land. Franchisors are exempt from the New Bizopp Rule because they’re already covered by the more heavy-duty FTC Franchise Rule (16 C.F.R. Part 436), which requires more than a one-page disclosure. Serious franchises – from McDonald’s to Harold’s Chicken (no longer accepting applications) – require applications, resumes and CPA-certified personal financial statements that demonstrate applicants have the industry experience and capital to run the franchise effectively. I’m not saying everything is shiny rainbows in franchise-land. Unhappy Franchisee is a clearinghouse of info on bad franchisor behavior, ranging from the seedy underbelly of well-known franchises to straight-up scams. Franchise-land already has government and self regulation, though, so it makes sense that it’s exempt from the New Bizopp Rule.

          It’s B.S. that MLMs are exempt from the New Bizopp Rule, though.

          However, I don’t see a reason why MLMs would be exempt from the Mommy Blogger Rule. To quote the FTC press release announcing the rule:

          In contrast to the 1980 version of the Guides – which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical” – the revised Guides no longer contain this safe harbor.

          Response Magazine explained how to work within the new rules here, quoting attorney Joel Rothman from the firm Arnstein & Lehr as stating, “The new FTC Guides require you to ‘clearly and conspicuously disclose the generally expected performance in the depicted circumstances.'”

          I think that currently they’d be violating the Mommy Blogger Rule. If they’d misrepresented distributor earnings between 2009 and 2012, they would’ve been violating both the Old Bizopp Rule and the Mommy Blogger Rule. At any time subsequent to the 1979 ruling, they would’ve been violating the ’79 ruling. I don’t think there’s a shelf life on specific court rulings against a specific entity, which is another reason why so many scams fold and reopen under a different name.

          Again, I’m not a lawyer, so I’m interested to hear what lawyers, Jack and anyone else with some insight have to say about this.

          1. @Lanna ::

            Pretty good analysis for a not-a-lawyer.

            When I was talking to {is a lawyer} Doug Brooks about this case :: he pointed out that while the MLM industry lobbied themselves an exception to the Bizopp Rule … the same can’t be said for the individual “business method” scams run by the big distributors … most of which likely fall under the rule due to their costs and extraordinary “Hope For My Family” type claims.

            So Dahl :: Andry :: Powell :: et al … have likely been under the legal obligation to provide that one page reality disclosure since the rule became final {with much fanfare but little enforcement}.

          2. @Lanna, I think probably I got smokescreened/confused from how Herbalife did their “typical results” stuff sometimes when they do their “typical results once you reach a certain level” which after thinking about what you just said I think is completely nonsense.

            Not completely O/T, but something I was thinking about the other day as I was walking about in circles with my cat is about this part about Celebrity Endorser liability

            http://www.responsemagazine.com/res1209032

            I’m “glad” that we should expect celebrities to look for stronger indemnity provisions rather than maybe us to go and expect the celebrities not to endorse scams. huh???

            Wouldn’t it be a fun trick to get some sort of class action going against the fake celebrity endorsers of Herbalife who now went to forget it was Herbalife they endorsed and now think it was Vemma? Especially since we can find out about documentation that shows paid-endorsement wasn’t always disclosed.

            But maybe I’m also thinking the whole “paid celebrity endorsement” vs “celebrity endorsement” is some sort of big nonsense, because I’m starting to guess that a bunch of people won’t care if the celebrity is paid and will just think about, “well, I trust this person so obviously they wouldn’t go about promoting a scam.”

            1. @Jack,

              Let’s say I write a $55 diet book that comes with a one-year 10% GNC discount card adhered to the inside back cover, a card that can be purchased separately for $15 at GNC. Of people who purchased the diet book, 89% don’t lose weight [1]. Some of them gain weight. I don’t know whether or not they followed the diet, but when I’m marketing the book I say that this 89% didn’t follow the diet and only bought the $55 diet book in order to get the 15% discount card – at a $40 markup.

              http://www.flickr.com/photos/24320537@N06/9682700695/
              Post hoc, I infer the 89% of diet book buyers who didn’t lose weight didn’t follow the diet.

              I begin categorizing new diet book buyers as “dieters” and “non-dieters” [2].

              http://www.flickr.com/photos/24320537@N06/9685943534/
              By excluding “non-dieters” from our numbers, now a slim majority of book buyers lost 1 lb. or more over a year.

              I know that many of the “non-dieters” actually are following the book diet. I tell them they can’t just follow the diet; they have to “take massive action.” I convince them to buy $199 motivational MP3s produced by people who’ve claimed they lost an average of 724,030 pounds a year, each.

              Despite my vigorous victim-blaming, only 40% of dieters and 10% of “non-dieters” buy the updated annual diet book two years in a row [3]. In order to maintain steady sales volumes, I get the book translated and enter a different international market each year.

              Maybe you’re wondering what the diet is, and whether it works for anybody. The diet plan entails eating your body weight in milk chocolate every day. It’s super expensive and difficult to follow, and it has basically zero chance of helping you lose weight. The only way to lose weight while following the book diet is to cheat.

              That’s just a hypothetical story using some fun numbers from Herbalife.

            2. @K. Chang,

              Well, if it was me, I’d definitely brag about having sold books to 3.2 million independent diet book readers worldwide this year, but then when I broke it down by geographic region and how many people bought the newest version of the book year after year, I’d totally switch to only talking about the dieters, not the “non-dieters.” Worldwide, I’d only have probably 410,303 dieters, which is only 13% of book buyers. And going by the American numbers, only about half of the dieters lost weight. [1]

              If you wanted to call a group “superdieters,” that’s probably the top 1% of the top 11% of book buyers who lose 100,000 pounds or more per year. In my hypothetical story, I’d imagine they’d be making money selling “diet meditation” and “finger Twinkie dieting” videos saying how awesome the eat-your-body-weight-in-milk-chocolate-daily diet was while surviving on distilled water and Kleenexes themselves.

    2. @Wyrd, It’s worth noting that Peterson, who committed suicide not long ago, was also one of the top producers like Powell and Dahl. And apparently Peterson had his own lead generation company

      Herbalife is busy backpedalling away from these organizations, having in April publically announced that no members are to do business with them.

      I speculated on my blog (and Oz kinda wondered, on Behindmlm) that Herbalife may have “thrown him to the (FTC) wolves” as sorta sacrifice in order to save itself.

      Powell already split and took his downlines to Vemma, i think, or was it Nutrie? Another top producer for Herbalife, MacDougal? Said she’s taking her downlines to Vemma because she’s getting “handcuffed” by herbalife with the new marketing guidelines.

      Would an “innocent” company do that? Hmmm?

      It is my opinion, both on my blog, and here, that Herbalife basically let profit cloud its judgment and turned a blind eye to the top “producers” abuses for its own bottom line. And its day of reckoning is coming. The question is… what sort of judgment?

      1. @K. Chang ::

        Herbalife basically let profit cloud its judgment and turned a blind eye to the top “producers” abuses for its own bottom line.

        So you’re disagreeing with me that distributor “abuses” are an inherent part of the system?

        And you’re disagreeing with this contention in the lawsuit?

        b) to provide Herbalife with a plausible defense (i.e., the “over zealous distributor” defense) in the event of regulatory problems with the distributor-generated promotional materials

        Blind eye my ass … this is how they roll.

        1. @SD, Let me clarify my statement.

          I think MLM, as a system, has plenty of inherent flaws that a NORMAL INDIVIDUAL, being predictably irrational (as explained in Dan Ariely’s book of same title) will naturally resort to recruiting to make their buck instead of retailing, no matter what the law or rules say.

          And a company really has NO incentive (other than fear of FTC killing it) to ensure that the individual distributors stay on the legal course, when it can basically go hands-off and still count sales as, well, sales!

          I personally would qualify corporate as “willfully negligent” or “willful blindness” toward the abuses by the top distributors. They don’t know, and they don’t need or want to know.

          And they will pay for that.

        2. @SD, Wonder how the ol’ “OverZealous Distributor” will hold up future-wise.

          2wit:

          A. “Conscious Avoidance” and “Substantial Assistance”

          “FTC’s ‘Duty of Inquiry’ for Non-Marketers Gets a Judicial Boost”

          http://www.ftcadlaw.com/ftcs-duty-of-inquiry-for-non-marketers-gets-a-judicial-boost/

          Her part was integral, the court said, because she had produced the grant materials, and she met the “conscious avoidance”

          test because she:

          1) was aware of a state attorney general’s investigation of the business and request that it change its marketing, yet she

          never asked to see the marketing materials;

          2) was aware a success rate claim for one of her products was not substantiated; and

          3) had been advised by a former employee of the company to be vigilant about monitoring its marketing. On the “substantial

          assistance” prong of liability, the court said it is “sufficient that Ms. Chapman played an integral part in the … scheme

          by providing the services and products they marketed to consumers.”

          My question: without her being aware of the state AG investigation would FTC make “conscious avoidance” test stick because

          of it just being a high-scam-risk market…you know…like the MLM stuff is?

          B. “Ignorance of the law is no excuse; nor is (willful) ignorance of a business partner’s illegal activities.”

          http://ftcbeat.com/2013/06/25/ftc-signals-interest-in-enforcement-of-deceptive-advertising-laws-against-payment-processors/

          “In the FTC’s complaint against IRN, the Commission notes that IRN “processed millions of dollars of credit card

          transactions for IWB, thereby earning considerable fees for itself.” The complaint identifies several indicators that would

          have, or should have, put IRN on notice of IWB’s practices in violation of the TSR, including the following:

          • IWB sent IRN copies of company documents including, but not limited to, telemarketing scripts and samples of the IWB

          defendants’ “financial plan”
          • IRN was aware that IWB had a variety of complaints on consumer websites
          • IWB had an “F” rating with Better Business Bureau and IRN accessed the BBB website several times
          • IRN received thousands of copies of chargeback disputes initiated by dissatisfied consumers
          • IRN received multiple fraud alerts from Discover regarding IWB

          Instead of ceasing to process transactions for IWB, IRN responded to these “red flags” by increasing the percentage it

          withheld from transactions processed for the telemarketer and holding such sums in a reserve account.”

          C. “‘Don’t Ask, Don’t Tell’ Asks for Trouble From the FTC”

          http://www.ftcadlaw.com/dont-ask-dont-tell-asks-for-trouble-from-the-ftc/

          “Through settlements against Internet merchants (i.e., Legacy Learning Systems, Central Coast Nutraceuticals-Graham Gibson,

          1021018 Alberta Ltd., d.b.a. Just Think Media-Jesse Willms) and affiliate networks (i.e., Clickbooth), the FTC is

          attempting to create a “culture of accountability” in the unruly world of affiliate marketing through the imposition of

          stringent affiliate policing and disciplinary requirements.”

          &

          “In Skyy Consulting, the FTC accused a provider of “voice broadcasting” services of facilitating illegal robocalls despite

          knowing, or by “consciously avoiding” knowing, that its clients were violating the FTC Telemarketing Sales Rule (TSR),

          including the requirement to have prior consumer consent to make robocalls.”

            1. @SD, Look…the Conscious Avoidance Hall Of Fame…

              http://www.incomeathomeradiohosts.com/income-at-home-radio-personalities/

              “As you can see below, the Incomeathome.com system is not simply being talked about by a few people. It is being promoted by such popular radio talk show hosts as:

              * Yolanda Adams
              * Joe Bartlett
              * Glenn Beck
              * Neil Boortz
              * Delilah
              * Jerry Doyle
              * Sean Hannity
              * Roger Hedgecock
              * Laura Ingraham
              * Alex Jones
              * Tom Joyner
              * Art Laboe
              * Mark Levin
              * Rush Limbaugh
              * Bill Press
              * Randi Rhodes
              * Michael Savage
              * Dr Laura Schlessinger
              * Todd Schnitt
              * Shirley Strawberry
              * John Tesh
              * Charlie Tuna
              * Anthony Valary
              * Sybil Wilkes

              Do you think that all of these popular radio and media personalities listed above would put their hard-earned reputations on the line all to earn a few dollars? Do you think they would promote something on their radio shows that they would think may be a business scam or not rewarding for their listeners?”

              Would they, could they?

      2. @K. Chang,

        (Salty beat me to it, but I also was gonna do the quote-rebuttal thing on this)

        It is my opinion, both on my blog, and here, that Herbalife basically let profit cloud its judgment and turned a blind eye to the top “producers” abuses for its own bottom line.

        It seems like you’re applying Hanlon’s Razor in your analysis of Herbalife and probably of MLMs in general. You might or might not have actually heard of it before. It goes like this:

        “Never attribute to malice that which can be adequately explained by stupidity.”
        http://www.catb.org/jargon/html/H/Hanlons-Razor.html

        It’s cool. It’s definitely words to live by and stuff.

        After reading http://saltydroid.info a lot for two or three years now (I could check to see when the Naomi fake-death threats thing happened, but I’m not going to right now) I’ve come to understand that in the case of serial scamming, it’s usually okay to go ahead and assume “malice” or at least some sort of “reckless or depraved indifference”.

        Scamming a person is a little bit like killing them–you have to just not care about the fact that you’re doing something terrible to them. Scamming thousands or tens of thousands of people over and over and over takes a special kind of dead-inside.

        I mean I’m sure the ones at the very top of Herbalie did and do “turn a blind eye”. Most of the time, in the average day, that simple self-deception is enough to get them through. Every now and then however, some issue will come up. And then they have to look past the simple lie, see the Truth of the magnitude and nature of the suffering they cause and then… blink it all away.

        Because “blind eye” only gets you so far. Suppose you personally were on the receiving end of that lawsuit with 2600 totally screwed over people. How do you “blind eye” all that away? You’ve got to look at it. You’ve got to stare it (and by extension) all those people right in the face and say: Fuck you. Fuck you all. Your money was awesome. It tasted like strawberries. Thx.

        or something like that.


        Furry cows moo and decompress.

        1. @Wyrd, Yes, I think hanlon’s razor has influenced my thinking, but prolonged negligence borders on criminal offense.

          After all, you can only pretend for be ignorant for so long, and Herbalife has been ignorant for, 33 years? (founded in 1980)

          I have commented before about how the current justifications by John Hempton and so on makes no sense as the diet clubs only started in 2003.

          I think there’s a few cases where the court rules that there’s no reasonable explanation why the defendant could not have known about something, and there are other cases where ignorance cannot be offered as a defense. As I’m not a lawyer, I’ll stop here.

  4. I kinda had in my mind an editorial cartoon, something akin to

    Hebalife backing furiously away from a giant (FTC)

    The giant has two people sitting on its shoulders, congress, and Latino community, whispering in its ear, but generally just look dangerous, but not yet menacing.

    Herbalife is also busying clawing at its back at some top producers, having already tied up a few. Some have already ran off to Nutrie and Vemma in the distance.

    Peterson, a tiny little figure, is about to fall under the foot of the FTC giant marching onward

    Probably a bit too graphic, but perhaps perfect for SD here. SD, know any cartoonists / satirists?

    1. @K. Chang,

      Yeah, but make Herbalife the giant. The FTC’s consumer protection division is about 600 people, about 23% of the 2600 unlucky victims in the 2005 class action settlement alone. Consider the corporate employees at Herbalife HQ, its factories, and its overseas offices; top producers, distributors and failed distributors around the globe; stockholders; and third-party manufacturers and service providers who work for Herbalife. Herbalife is the goliath in this tale.

      The FTC is a flaccid cucumber somewhere in the background of the cartoon.

      1. @Lanna, Maybe we can add Ackman and Hempton on the sidelines, Ackman’s cheering the FTC on, while Hempton and Icahn is betting “he’ll never catch Herbie!”

        I think FTC as the lumbering but semi-blind giant seem to be slightly more appropriate metaphor.

        Maybe we can have Herbie spouting dialog like “I’ve controlled my minions! Go after someone else!” while some minions have scattered toward the other MLMs on the horizon.

    2. @K. Chang ::

      {sarcasm}

      Nothing I like more than artistic suggestions from the fucking peanut gallery.

      I have much to learn from you.

      {/sarcasm}

  5. A great 1994 TimeOut article about Amway sucking …

    http://skepdic.com/timeout.html

    Some quotes relevant to the interests of this post …

    The majority of the wealth of the tiny number of top-ranked distributors in this country comes not just from the sale of Amway products but from selling motivational materials and organizing seminars and rallies for the people below them.

    … and …

    Colin’s Diamond explained that his real wealth came from selling books and tapes and from organizing the meetings.

    … and …

    In 1985, Don Gregory, a former speechwriter for Amway co-founder Jay Van Andel, told Forbes magazine: “Recruits are brainwashed into spending a fortune on peripherals while consuming Amway products. They either lose their shirts or begin making money by egtting enough people underneath to do the same”. In the same issue a major Amway black hat, Dexter Yeager, whose downline includes the majority of Britain’s distributors, admits that two-thirds of his income came from tapes and books.

    … and how.

    1. @SD, Once when I went about talking to a guy who told me about that he was doing some contract programming for AmWay he claimed to me that it was the weirdest financial system he had seen up to that date and that as far as he could see it was not really possible for to see where money came from or went to or something about like that, which sounds kind of familiar.

      I might be able to go get ahold of him to see if he has more details about it because it would be kind of interesting for me to find out about it.

    2. @SD, Speaking about Amway conferences/meetings, I found out a good idea about what to do at them:

      “Anonymous

      September 10, 2013 at 9:01 PM
      Something better to do for those attending? I got an idea.

      In one of my more boring courses in school (ages ago), I had a professor who had an obvious linguistic tick, like Mr. Mackey on South Park, mmmkay? We would count the number of times her would use his tick. So how can a disenchanted use this for his or her entertainment? AMO-BINGO.

      Find out who is speaking at the next big live recording of a CD or MP3 you will soon buy, listen to their CD, pick out their big catch phrases (You know the ones ‘Speak it into existence!’ ‘Trust your upline!’) add in a free space for ‘YOU CAN DO IT TOO’, and create bingo cards.
      You, and several other ambot significant others can sit there and play bingo based on the same old boring routine being played out on the stage.

      Just be sure to yell BINGO!!!!!!!!!!!!!!!!!!!!!! in the middle of the speech that Mr diamond (20 years ago) is giving.

      -Jerry”

      via:

      http://marriedtoanambot.blogspot.com/2013/09/better-things-to-do-in-denver-colorado.html

      1. @Jack,

        I like this idea very muchly. I do have concern though that this technique might not quite be up to the challenge of a Yanik Silver style, high pressure “infotainment” extravaganza.

        But if you could get this counter-culture-y idea to spread, it could totally kill the LGAT hypnosis.

        Win.

        1. @K. Chang,

          I found my way over here through another blog and saw my name in the comments and had to say thanks. I only attended a few meetings and started counting the ‘buzzwords’. Ick.

          -Jerry

    3. @SD, I think you might need some accurate background information here.

      Please bear in mind, that this is only a tiny fraction of the information which I have gathered over the years.

      During the 1990s, I had members of my family in the UK trapped deep inside the ‘Amway’ cult. No matter what independent external information they were offered, their minds were programmed systematically to reject it as ‘lies’ spread by ‘Amway’s’ many enemies. Concerned people such as myself, who continued to challenge the authenticity of the so-called ‘Amway income opportunity,’ were systematically branded ‘Dream Stealers motivated by jealousy, etc.’

      Indeed, my family members became genuinely psychotic under the influence of the ‘Amway’ cult. They were very much like chronic gambling addicts: no matter how much they lost, they ignored reality and remained focused on what they described as their ‘dreams and goals of future total financial freedom.’

      At one time, my older brother ( a qualified high-school teacher) became totally convinced that within a few years all supermarkets were going to close throughout the entire world and that ‘Amway’ was going to replace them. He also became totally-convinced that he was soon going to become an admired and respected multi-millionaire ‘Diamond Distributor’ and that anyone who refused to join ‘Amway’ was a ‘loser’ doomed to poverty who should be excluded from his life.

      My brother’s home was turned into an ‘Amway’ recruitment centre, and all ‘negative products’ (i.e. everything not of ‘Amway’ manufacture) were banned. My brother’s new ‘negative v. positive’ model of reality was being fed to him through endless publications, recordings and meetings (these were costing many 1000s of pounds annually).

      It has been estimated that between 1972 and 2006, over one million UK and Irish citizens were churned through the ‘Amway’ cult and that up to one billion dollars was taken through the fraudulent sale of many millions of publications, recordings and tickets to meetings – on the pretext that these ‘optional tools’ contained secrets vital to achieving success in ‘Amway’.

      Even though it seems completely impossible, when they refused to take notice of me, I informed my deluded family that they were in such danger that I had gone directly to senior UK politicians and civil servants to make complaints, my brother was fed another bizarre chapter of the fairy story by his ‘Amway’ handlers.

      My brother then became totally convinced that the British industrialist and inventor, James Dyson (who was in litigation with ‘Amway’ in the USA concerning his autobiography in which he detailed how ‘Amway’ had once tried to steal his patents) was financing a smear campaign against ‘Amway’ and that I had been employed by Dyson. My brother even signed a false deposition to that effect, in which he made the even more outrageous false claim that I had made a full verbal confession. Amway’s US attorneys then tried to introduce this nonsensical document into their litigation against Dyson.

      For obvious reasons, I went to see Tony Thompson in London at about the time his article on ‘Amway’ came out, and Tony remains a good friend of mine to this day. He left ‘Time Out’ after publishing a couple more damning articles on ‘Amway,’ and briefly became the crime correspondent of the Guardian newspaper. Currently, Tony writes books on gangs and related topics.

      In 1994, Time Out was threatened with a non-existent, and non-specfic, lawsuit by ‘Amway UK Ltd’ for even daring to mention the words ‘cult’ and ‘Amway’ in the same article. However, your linked version of Tony’s 1994 article does not contain all of what was actually published. Furthermore, Tony never mentioned the fact that he too had a member of his own family in the UK, trapped deep inside the ‘Amway’ cult.

      In his 1994 Tony actually detailed the ‘8 themes’ set out by Prof. Robert Jay Lifton in ‘Thought Reform and the Psyschology of Totalism,’ which indicate that persons are being subjected to coordinated devious techniques of social, psychological and physical persuasion, designed to shut down thir critical and evaluative facutlies and radically alter their model of reality.

      Obviously, all Lifton’s themes are have been, and remain, present in groups like ‘Amway’ and ‘Herbalife.’ When challenged, the front companies simply pretend that all these problems have been the fault of individuals within the company’s salesforce.

      In 1994, the so-called London-based cult adviser, Graham Baldwin, who is briefly mentioned at the beginning of Tony Thompson’s article was immediately approached by company officers of ‘Amway UK Ltd.’ He then worked for ‘Amway’ for about 10 years along with another so-called UK cult adviser, Ian Howarth. I’m reliably nformed that they were each on about $100 000 per year. What they were actually doing in return for this stolen money, was rounding up anyone in Britain who started to suspect that ‘Amway’ is a cult – in order to prevent these people from speaking out.

  6. OMFG.

    Former Los Angeles Mayor joins Herbalife. From L.A. times:

    “Villaraigosa will counsel Herbalife on “strategic business development and global community outreach,” the company said. Herbalife did not disclose how much Villaraigosa will be paid.

    “Herbalife has been a solid member of the Los Angeles business community and a strong presence within the Latino community since the company was founded here in 1980,” Villaraigosa said.

    Word of Villaraigosa’s new job comes as Herbalife faces criticism about its business model from Latino civil rights groups and calls for investigations from several elected officials.”

    Second article:

    “Villaraigosa’s move came less than two months after Brent Wilkes, national executive director of the League of United Latin American Citizens, accused Herbalife of preying on Latinos and called on the Federal Trade Commission to investigate the company.

    That’s why Wilkes was surprised by Villaraigosa’s decision to work for the company. Herbalife has not said how much it’s paying Villaraigosa, who left office June 30 after serving eight years as mayor.

    “I’m disappointed. We’ve had a long and supportive role with Antonio Villaraigosa,” Wilkes said. “All I can surmise is he doesn’t know the extent of how the Latino community is being negatively impacted by this company.

    “I have to believe in my heart he would not have taken this gig if he realized so many Latinos were being defrauded by the company because they sign up thinking they’re going to make money and they end up losing money instead.”

    Villaraigosa did not respond to a request for comment from The Times.”

    Please Salty, do something. I voted twice for this bozo and it makes me ill.

      1. @2+2=4, Oh, right. Why was I surprised? I guess I had a split second lapse where I thought maybe not every politician has to be a scumbag every waking hour. Sucks to be constantly reminded though.

    1. @Regrets, makes you wonder if this was one of those pre-arranged quid pro quo that had to wait until he leaves office?

      You know Herbie is going to drum up support from Latinos as much as possible, and hiring him will do quite a bit of PR, as the supporters will go “he can’t possibly cheat me”…

      They may do well remembering how Bob Eubanks was tricked into advertising a scam…

      http://amlmskeptic.blogspot.com/2012/07/bad-argument-association-with-authority.html

      1. @K. Chang, no doubt. Wilkes is being tactful:

        “…“My guess is he doesn’t stay with the company long,” Wilkes said. “A guy like Villaraigosa wouldn’t want to tarnish his reputation with the Herbalife scandal.

        “It’s not that they’re being paid too little. It’s that they’re not being paid at all, or are losing money. When he realizes that I think he’ll be gone.”…”

        But Villaraigosa doesn’t give a shit about his reputation, his former supporters or apparently about anything except what is in his own wallet.

      2. @K. Chang, I don’t know about if the payment to Eubanks was disclosed, but again, I’m pretty sure it wouldn’t matter and the same logic would hold.

  7. I think Lanna pointed me to the LA Times article…

    Apparently most Herbalife Diet Clubs are being operated ILLEGALLY as they lack food preparation and food retail (no prep) permits.

    LA County, home of Herbalife, already closed two diet clubs that operated in retail space without permits. They said diet clubs are illegal if they don’t get a permit. However, they seem to lack the manpower to go after those that operate from homes or otherwise not advertise openly.

    I check New York State, and they have similar requirements for food prep or food retail licenses. I seriously doubt any of the clubs visited by Hemptman in Brooklyn or somewhere have those permits.

    Another nail in Herbalife’s coffin? One they can pull easily though by sending out an advisory for all distributors to follow local laws though. ;) (which they already do as CYA)

    http://amlmskeptic.blogspot.com/2013/09/are-herbalife-diet-clubs-legal-hint.html


  8. It’s so much money :: spread out over so few middle class people … over such a tiny time period. These aren’t “I’m going to sell this Cookies n’ Cream powder to John Hempton on Craigs List” type of losses :: it’s more like “I’ve ruined everything … my spouse is leaving me … I want to die.”

    Yep. This.

    I wish that didn’t sound so familiar.

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