The Burton Family Affairs



It’s clear how Michael Burton’s faux career at scam company Herbalife is going to end :: fucking disastrously … and with no possible excuses.

“But how did his career begin?” … asks a giraffe standing on a turtle.

Well :: inquisitive giraffe with extraordinary balance :: it began with used cars … in the style of our very own previously shat upon The Gnome. As we are told in an old issue of Herbalife Propaganda Today …

For almost eight years, Michael Burton and his wife, Michelle, owned a small chain of used-car lots. It was a tough business, and 70 to 80 hours a week was typical for Michael. “I felt like I was married to the car lot,” he remembers. “Dealing with employees and salesmen felt like running an adult day-care center.”

It’s hard to run a day-care for used car salesman {says the used car salesman} :: they need such frequent diaper changes … what with all the bullshit leaking out of their holes.

“We ended up going bankrupt, but that turned out to be the best thing that could have happened to us.”

Going bankrupt is the best :: wanna find out about it? … sign up for Herbalife.

Like so many people boasting about a miraculous success in HLF :: Burton was first recruited by a family member …

“My wife’s parents, James and Carole Wood, introduced us to Herbalife, and James encouraged me to sign up with him. I was totally against the idea and didn’t want to have anything to do with it,” Michael admits, “but he and Carole invited me to a Success Training Seminar anyway. After I got back home, I told Michelle that I’d just found what we were going to be doing for the rest of our lives!”

The next day they became Distributors and the day after, Supervisors.

Michael put his supervisor order on a credit card :: which was the best business decision of his life … even bestier than going bankrupt on some wank ass used car lots.


Burton says he made President’s Team in a totally unbelievable 16 months :: but his parents-in-law James and Carole Wood made it almost as fast … only working the business part-time. From Herbalife Propaganda Today

After retiring a few years ago, James D. Wood invested in a small chain of used-car businesses. “I put quite a bit of my money into that, and it was going well,” James relates.

Oh noes :: investing your retirement in the Michael Burton experience? I’ll guess that ended in stupefying debts?

But fate intervened in the form of serious illness, and James underwent open-heart surgery. Says James, “While I was recovering from surgery, the used-car business went into bankruptcy.

… dot dot dot :: my son-in-law is rubbish.

Here’s where it gets dumb …

So there was a Success Training Seminar in the area, and my son-in-law, Michael Burton–now a President’s Team member along with my daughter, Michelle–took me there.

So :: Michael Burton was recruited into Herbalife by his father-in-law … who was recruited into Herbalife by his son-in-law Michael Burton? I guess as long as you’re going to make up ridiculous income claims … you might as well twist your origin stories into nonsensical circles. And they lived happily ever after …

A lot of people think you can’t make money part-time and have financial security. But that’s where I am–and it’s like a freight train to glory.”

How fun :: simple :: magical it is that two people from the same family could both ride the freight train to President’s Team glory … and in record time … at the same time. But wait :: there’s more … meet Sydney Mercedes Burton … who has herself been experiencing the sudden onset of Millionaire Team … and {following in the path of her puffy papa} has just made her debut on the Herbalife scam seminar stage.


Thanks Herbalife and my amazing, beautiful team for allowing me, at age 22, no degree, to profit over $6,500 last month! THIS IS JUST THE BEGINNING! If you need extra income, I can show you how! #girlpower #herbalife #loseweight #getfit #makemoney #lewisville #flowermound #atomicnutrition #youngmoney #pinkhair

… says Sydney Mercedes to the facebooks in March of 2013 :: just four months before her parents/upline filed an epic bankruptcy.

Sydney Mercedes didn’t always want a career in lying :: she used to dream of putting her dye-jobs and double stripper name to a more noble purpose … wrench modeling.


But it didn’t work out :: cause real life is so much harder than faking it until you’re making it at faking it :: so the wrenches will have to model themselves … Sydney Mercedes Burton is officially a full time Herbalife faker. And she’s succeeding at moving up the plan :: unlike you struggling TAB team members … because the game is fucking fixed!

In Herbalife :: like with every other dirty :: horrible :: heart-crushing :: story here …

winners are chosen … not made.

they’re appointed.

… they’re predetermined.

and they’re organized against you.


#cult #fraud #cartels #stacking #gamingthesystem #strippernames #bankrupt #3generations #nepotism #DanWaldron #Texas #freighttrain2glory #pinkhair

>> bleep bloop

100 thoughts on “The Burton Family Affairs”

  1. This deception is so ridiculously implausible, it must be a joke . . . right? If not, it could be an indicator that at least some of scamworld’s denizens are stupid enough to be easily brought down. I bet even Rush Limbaugh, with his half brain tied behind his back, could do it.

    Oops . . . are my political colors showing?

  2. Since you’re linking to the transformational leadership cartel have you ever heard of Ryan Eliason? Another life coach. Bigged up on Steve Pavlina who was I believe in the Transformational leaderership caretl of yada.. Looks too juicy to miss.

  3. Mercedes and Michael are the two main culprits in the brainwashing of my poor wife. Mercedes lives a few doors down from me. This is gut-wrenching to look at. When my wife first started in this cult, the only thing she would talk about is how successful Mercedes and her family are. She even seemed intimidated to miss HLF events out of fear of how Mercedes would react. She really believes she has a chance to duplicate their “success” if she jumps through all of the hoops they ask her to.

  4. Sad. Think of the values that young person has been brought up with,

    Okay, so I know the following is just plain catty…and yet I am going to go ahead and share…

    When my son was school age and played competitive golf (and again, I know, ick, sue me, whatever, my husband and son are sports nerds and the more sports equipment involved the better, seemingly)…

    Anyway, there was this kid in the league with the hyper-competitive parents, you know the drill…and the dad was a golfer himself…and it just always cracked me up that they had named their son MacGregor…that was his first name…like the golf equipment makers:
    To me it seemed that that had not so much named their son, as Branded him.

    I guess the name Mercedes just strikes me as “aspirational” in a similar way, though, who knows, maybe she has an Aunt Mercedes….

    And it could have been worse….they could have named her Formula One.

    1. Actually Mercedes is common Latino name for girls. Not *that* common, but it’s not exactly like super-rare either. I mean, Latinos have some relatively strange names to us Gringos. Until I watched El Mariachi (the original) I didn’t know Consuelo is a girl’s name.

      1. Yes dear, I know. I am a long time CA resident and spent a year traveling in Central/South America a long time ago.

        1. Lo siento mucho. Vivi aqui en California ahora, pero tambien vivi en Colombia. Era un pais muy interesante.

          I had a teacher named Mercedes… :)

          We can go on comparing weird names, but that’d be WAY off topic. :D

  5. No one is mentioning the herbalife tattoo on her wrist? Is that real? I sincerely hope it’s not, but it lacks the shininess of a temporary tattoo and the line work looks bad. Poor girl.

      1. I have a blog post on this coming soon.

        I can’t think of any other MLM that has corporate tattoos. Anyone else remember anything like this? I certainly don’t recall any Amway or Quixtar tattoos…

  6. it’s amazing how these Herbalife stories dovetail… It’s almost as if they’re written from a script.

    Shawn Dahl was introduced to Herbalife by his wife’s family

    Who’d have thought so was Burton?

    And from the sound of it, Burton was working and going backrupt at his in-law’s place: selling used cars.

    So they ruined him… TWICE. Once with that used car lot, then again with Herbalife.

    And he’s still pushing Herbalife… and married?

    1. @K. Chang

      So they ruined him… TWICE. Once with that used car lot, then again with Herbalife.

      And he’s still pushing Herbalife… and married?

      “The things I do for love.” — Jaime Lannister, as he’s pushing a kid out a window

      Except probably we don’t want to compare Shawn Dahl to Jaime Lannister because… Jaime Lannister is so much less of a monster than Shawn Dahl when it’s all said and done.

    1. Agreed. ….Herbalife senior executives are liars?… and then he goes on to name the Herbalife executives he met, and how they lied to him.

    1. But there are no giraffes standing on turtles at Ackman’s site….so it isn’t quite as fabulous as the Salty Droid from that point of view…Still, I think think they are doing a pretty good job in laying out their evidence over at herbalifepyramidscheme….
      It is just not credible that HLF doesn’t know what a whole line up of their important Chairman’s and President’s team members are up to. Like in the Doran Andry story, HLF was sued together with Andry in 2002…come on, how could HLF not know what practices they were being sued for? That’s insane. HLF’s “rogue distributor” defense: 2+2=5

    2. Ackman have to name names. Herbalife just isn’t that vulnerable to LOGICAL attacks (stocks keep going up), so he had to appeal to the emotional / personal angle.

      Now that he named names, he’s also hoping the “victims” of Dahl will step forward and lend him a hand.

  7. yeah is pretty good. this youtube video of Doran Andry is so incriminating, every news organization should watch it. He even says “That’s the whole nutrition club model. Thats the PYRAMID.” at 1:18!

    I wish someone would make “Herbalife fraud – for dummies” website. Even Ackmans sites get really confusing after a few paragraphs. Its HARD to understand Herbalife, and Multi-Level-Marketing. Especially if you’ve never heard about any of it before. There’s so many layers of deception. i remember the first time i heard about “YOLI blast caps” on a weblog, it took me a lot of reading before i understood that the product was a ruse, used to cover up a pyramid scheme.

    I just want to see a simple site that says “THIS IS WHAT’S REALLY GOING ON HERE.” in like 10 one-sentence steps. Even the concept of “lead generation” is hard for me to get a full grasp on, and its central to understanding how deep the Herbalife fraud goes.

    Saltydroid is the best of course, but we all know it takes reading like 10 articles to learn the language.

    1. Actually, what I find hilarious is her final checklist item:

      Consumption by non-distributor / end-users
      : While not a true test of legitimacy, Herbalife has
      significant non-distributor consumption, both at home and in
      Nutrition Clubs.

      Consumption by non-distributor i.e. direct sales to retail, is the ONLY test of legitimacy in network marketing. Everything else is secondary. She wandered far off the reservation and not even know it. DSA is called “direct selling association”, not “I mostly sell to myself” association. She’s a DSA parrot who claims “self-consumption” is legal at any quantity, just like Jeff Babener.

      1. K.Chang

        Does this one make sense to you:

        “The buy-back policy is accompanied by a claw-back provision that takes away the incentive for an upline to urge downlines to inventory-load; Herbalife explicitly discourages inventory-loading.”

        1. @Jack ::

          Or stated another way :: by a fake robot who is paid by no one

          Refunds for product returns come out of the pockets of upline supervisors :: giving them every incentive to disincentivize product returns … and/or to issue refunds themselves {in which case they conveniently don’t show up in Herbalife’s refund rate reporting}.

        2. @Jack :: They are going by the original Amway decision, IGNORING Omnitrition decision altogether, which is the SAME position taken by DSA (no surprise).

          The original Amway decision by FTC mainly is concern about inventory loading, where uplines pressure downlines to buy inventory, so upline can get their commission.

          They put on blinders to the next phase in the evolvement of pyramid scheme: product-based pyramid scheme.

          In product-based pyramid scheme, upline don’t tell downlines to buy inventory to make uplines rich. Upline, instead, BUY THEIR OWN INVENTORY (i.e. self-consumption), and tell downlines “to get rich, you have to do just like I did (self-consume)”, and find more people to self-consume just like you.

          Normally, this would NOT have worked as they are ignoring the 70% reorder rule and the ten retail customer rule. If you just self-consume, you can’t qualify for commission as you haven’t sold to ten customers, and you normally can’t consume enough PV to qualify any way.

          So DSA had been pushing “any self-consumption is legal (no matter how much)”, and ignoring the ten customer rule altogether. If the company implement any, it’d be a reduced version like 5 instead of 10.

          Which is why Omnitrition was so dangerous to MLM, and MLM (through DSA) is pretending Omnitrition doesn’t exist. But it’s the elephant in the room, you can’t ignore it forever.

          9th Circuit, in Omnitrition case (as dicta), actually pointed out that if one must “qualify oneself” through “sales”, and one is allowed to ‘self-consume” to satisfy the sales quota, that is effectively “buying into the scheme” with the amount of money paid for the products, One cannot exempt self-consumption to weasel out of Koscot test.

          And DSA had been ever since trying to end-run thsi interpretation by getting some states to pass specifici exemptions for self-consumption in their anti-pyramid laws.

          1. Related to your comment….I thought the new article on, Leslie Stanford edition, made an interesting point about the use of the word “Duplication” by HLFers…to the naive, it sounds like some kind of legitimate network marketing lingo, but when you see how it is used (linked to levels and volume points), it becomes obvious that it is code for closed system, pyramidal recruiting:

            “…In an older recording from 2006, available at, Stanford encourages members to purchase a monthly service offered by Herbalife called BizWorks (which appears to have offered web registration services and other recruiting tools (15:54)). During that call, Stanford tells the story of a member of Herbalife’s Millionaire Team whose “check has slipped.” (31:14.) Stanford explains that this senior distributor successfully recruited other distributors into the scheme and exerted pressure on them to order large volumes of Herbalife products in order to qualify as a Supervisor immediately, but failed to pressure those new Supervisors to place similar pressure on their own downline distributors. In Stanford’s words, “she is getting distributors and she is getting them to Supervisor, but she is not getting duplication going . . . . She’s only got 6 supervisors doing over 2500 [volume points]. She needs a lot more than that to get her Millionaire Team check back again. She’s getting some new distributors but again, she is not getting duplication.” The concept of “duplication” appears throughout distributor recruiting materials and appears to be little more than a euphemism for pyramidal recruiting”

            1. Bizworks is the same sort of “Amway Tool Scam” these reps are selling, same as Dahl, Burton, et al.

              Replication is basically “you have to do like I say, and you have to make your minions do like you said”. It’s “self-replicating” meme.

              In other words, they’re the Borg. (or replicators, if you prefer SG-1)

      1. “In July, Coughlan published this paper on Herbalife, concluding that Herbalife is squeaky clean. Let’s be clear. Herbalife paid Coughlan to publish this paper. The paper notes:

        This document was prepared with the financial and data support of Herbalife

        I don’t want anyone to be fooled. This wasn’t a professor who just decided to write about Herbalife out of the goodness of her heart. She was paid to do so.

        But lets talk about Coughlan’s conclusions. They’re wrong, and her paper is misleading, in my opinion. She did only a very limited analysis of Herbalife, one that was guaranteed to result in her concluding it was a legitimate MLM and not a pyramid scheme. Attorney Doug Brooks, one of the most knowledgeable people in the world on the topic of multi-level marketing, says that the analysis is superficial and full of misleading and inaccurate statements.”

        In some related news, Anne Coughlan will change the “Coughlan” to “Coughlin” and adopt Ty, the ficitonal MLM character made up to reflect made up money ideas from MLM. Wikipedia was nice to give Reverse Funnel System generous amounts of space while telling Philip Roth he’s not expert about Philip Roth (which I guess makes some sense, but still is funny for me to look at).

  8. VERY excited about this one (prob nothing fishing going on about it either)…

    “Herbalife Receives Symbol of National Quality for Its Products in Taiwan


    Taiwan-based Institute for Biotechnology and Medicine Industry (IBMI) recently awarded its Symbol of National Quality (SNQ) certification to Herbalife (HLF), a leading global nutrition company, recognizing three more Herbalife products: Triple Berry Complex, Tang Kuei Plus and Niteworks® Powder Mix.

    Products certified with the SNQ designation are evaluated by a panel of Taiwan-based scholars and experts against a number of scientific, efficacy and quality criteria. The certification identifies leaders in quality in the biotech, pharmaceutical and healthcare products and services marketplace.

    With these three new additions, Herbalife has now received 17 SNQ certifications from IBMI in Taiwan, including Formula 1 Nutritional Shake Mix, Formula 2 Multivitamin Complex, Active Fiber Complex, Cell-U-Loss®, Kids Shake, Tri-Shield®, Herbal Tea Concentrate and Beauty Powder Drink.

    The SNQ certification reflects Herbalife’s commitment to providing the highest quality products to its members, distributors and customers. Herbalife is dedicated to developing innovative, effective products that are based on proven nutrition science and comply with only the top research, development and manufacturing standards in the industry.

    About Herbalife Ltd.

    Herbalife Ltd. (HLF) is a global nutrition company that sells weight-management, nutrition and personal care products intended to support a healthy lifestyle. Herbalife® products are sold in more than 90 countries to and through a network of independent distributors. The company supports the Herbalife Family Foundation and its Casa Herbalife program to help bring good nutrition to children. Herbalife’s website contains financial and other information at

    U.S. Media Contact
    Herbalife Ltd.
    Mike Gutierrez (US), 213-745-0401
    Herbalife Asia Pacific
    Daliea Mohamad-Liauw


    1. SNQ is like UL symbol for electronics. It just says it’s pure and safe. Doesn’t say anything about efficacy.

      IBMI is a private non-profit organization that is a bit like Taiwan’s ARPA, except it only does biomed, but it also sets policy.

      SNQ is a special committee with 120 members (actual people), experts in biomed, medical, nutrition, etc, that studies stuff in 8 areas, and they have 8-10 members on the nutritional supplements.

      Here’s a link (in Chinese, use Google translate) on how they rate the nutritional supplement products:

      Nothing wrong with Herbalife’s products… Just how it’s marketed, right?

    2. Hey Jack,

      OK, first, food safety is a big concern in Asia. Every year there are several food-safety scandals in China, and in 2011, there was a big plasticizer scandal in Taiwan.

      Second, too many “natural,” “herbal” weight-loss products get their effectiveness from amphetamines, which are often manufactured in China.

      Third, Herbalife has had its own contamination problems. In 2011, metal shavings were found in their shake powders. PubMed has seven years’ worth of case studies where patients who had liver problems just happened to be taking Herbalife products and rebuttals like this one saying Herbalife products weren’t to blame. Before the 2004 FDA ban on ephedra, in 1999, a man taking Herbalife Ma Huang (ephedra) tablets was admitted to the hospital with heart problems.

      To assure customers food products are safe, Asian food manufacturers seem to have turned to lots of third-party certifications with official-looking seals of approval. These Taiwanese green-tea mochi have a halal seal and two seals from TQCS International, showing they meet TQCS’s ISO 22000:2005 and HACCP Food Safety certifications:

      The Institute for Biotechnology and Medicine Industry (IBMI) awards its SNQ certification to biotech products, healthcare equipment, health food, cosmetics, Western pharmaceuticals, and herbal products only, not green-tea mochi.

      Considering all the problems that Herbalife weight-loss products made in Taiwan could have, it’s a relief that their Low Calorie Nutritional Drink Mix gets happy green checkmarks for passing the plasticizer test and the heavy metals and microbiological testing. However, as K. Chang says, it doesn’t imply efficacy, and it’s not any kind of official government endorsement.

  9. There is this parody (Kindle only) pamphlet for sale on Amazon. I haven’t tried to purchase it, but just the description is pretty funny to read. I am totally on the same page with whoever published it….the satire speaks to my own level of frustration with the arguments the DSA, MLMs, and their lawyers make in their own defense, The MLMers know that all their defensive blather (eg.,the Coughlan paper) they spout is false, otherwise, Herbalife, for example, would pull together their outside sales data and publish it. We know that they are knowingly telling lies about their businesses, So. One does have to wonder if in the back of their heads, what ultimately keeps them going is a belief that they they know better than all the rest of us, they have a secret knowledge…the truth that they have stumbled across is astounding, and it’s this: There is really nothing wrong with Pyramid Schemes, at all! That’s where we’ve all got it wrong, and they have got it all figured out. Wow! What a paradigm changer. Call the NY Times! Please, somebody sign me up for Newest Way To Wealth™ immediately! I’m a believer!

    In Defense of the Pyramid Scheme [Kindle Edition]
    Dr. Lasdwun N. Luzes (Author)

    “Book Description
    Publication Date: January 19, 2014
    This extraordinary little booklet presents the compelling thesis for the legality and economic contribution of the pyramid scheme in modern American business. In particular, this booklet is the most comprehensive defense of the multi-level marketing (MLM) industry ever published. The MLM business includes such companies as Amway, Herbalife, and Nu Skin, and hundreds of others. The booklet argues that multi-level marketing companies are both legitimate businesses and they are pyramid schemes. The author’s thesis is that what is today defined as pyramid fraud is in fact a common business model involving hundreds of companies with as much as $30 billion in annual revenue in the USA alone. The booklet shows that the alleged “harm” done to the public by multi-level marketing in terms of consumer losses actually mirrors the overall picture of wealth distribution in the general American economy with the vast majority of benefits accruing to a tiny percentage at the top. The booklet presents a persuasive argument that the “deception” perpetrated by MLM companies in income claims is not significantly different from the deception, exaggeration and misrepresentations that are found throughout advertising and marketing. The one difference, the author says, is in MLM’s unique ability to gain control of people’s thoughts and to powerfully influenced their social lives, and for this it is generally esteemed by the investment community.
    Finally, it claims that the charge of “unsustainability” against pyramid schemes is hypocritical since the entire US economy depends upon perpetual expansion and the exploitation of finite resources. This booklet is the first to openly challenge the laws against pyramid schemes as biased and outdated, arguing that pyramid scheme economics (unsustainable, borrowing from Peter to Pay Paul, etc.) are pervasive throughout the US economy, from household budgets and credit card charging to national debt, the real estate market, corporate finance and the federal budget.
    The most powerful aspect of the thesis of this booklet is the defense of the values on which pyramid schemes operate – hope and survival in a matured economy where income opportunities are destined to decline. The booklet argues that MLM is the last sector of the economy where people are excited about their income chances and that its “self-employment”, survival-of-the-fittest model is the purest form of capitalism. The booklet bases much of it thesis that pyramid schemes are valid businesses on fact that MLMs and pyramid schemes are wildly popular in the marketplace, both on Main Street and Wall Street. This market support validates the model, he claims, since “The Market” is the ultimate arbiter of all human activity and the only system for meeting human needs.
    Finally, the booklet reassures supporters of multi-level marketing that the chances of government prosecution of the business are minimal and insignificant. This is because, the author argues, the industry is now “too big to jail.” It has reached a tipping point with far too many people participating, including some who were formerly government regulators, and it has built up such a powerful political lobby that the current laws will never be enforced.”

        1. Lucky for you, analytically deconstructing things that aren’t supposed to need to be dissected is kind of my thing:
          (Author): Dr. Lasdwun N. Luzes –> LASD WUN N LUZES -> Last One In Loses.

          Because whoever enters the pyramid last can’t possibly win. (But in reality it’s like.. almost *everyone* that enters the pyramid will lose.)

          Furry cows moo and decompress.

  10. From that booklet, “In Defense of the Pyramid Scheme”:

    It says: “…the booklet reassures supporters of multi-level marketing that the chances of government prosecution of the business are minimal and insignificant. This is because, the author argues, the industry is now “too big to jail.”

    Maybe then we need to turn jails into pyramid schemes. So maybe, if you get 6 of your friends to sign up to go to jail under you, you get a bigger jail cell for yourself.

    1. Those are nice screenshots. I thought that Herbalife at least trivially tried to disassociate itself with the malpractice of its agents. But of course, obviously, it leads the way. Maybe now it does not do this anymore? The FTC must have wrapped it’s knuckles. And now it is a squeaky clean nutrition and health company again. Or something.

  11. Found this link, should be helpful:

    “The Denialists’ Deck of Cards: 6 cards big business use to deny consumer law reform

    First hand: There is no problem

    Herbalife is using this now, claiming there is no problem, and any attempt at reform is just going to benefit Ackman.

    When pushed, Herbalife start blaming it on the “bad apples”, such as Shawn Dahl and company, without promising true reform.

    When further pushed, Herbalife claims “no harm was done”, esp. to the distributors that did not make any money. I think we saw such person in a previous Burton topic, insisting that “Lowest Herbalife distributors can’t be hurt because they bought the products”.

    When you try to pin them down on what constitute harm, they won’t answer, and if you do manage to get an admission out of them that there was harm, it’s only done by the bad apples.

    Finally, Herbalife will engage in “wait and see”, as in “we’re reforming, just wait. If there’s any harm, it’ll go away in a little bit”. They’ll keep shifting the goalpost.

    Second Hand: Consumer Education Is A Solution For Problem That Does Not Exist

    Herbalife has already engaged in this by claiming whatever the critics said, Herbalife is benefiting the economy and “helping Latino community earn extra income”.

    They’ll even claim that they welcome disclosures and education, knowing few if any people will read it.

    Herbalife haven’t fought mandatory disclosures, but DSA did as it managed to finagle itself an exemption from FTC’s “business opportunity” rules. One of the gambits used by DSA is “disclosure LIMITS consumer freedom”, because everybody is perfectly capable of conducting full due diligence research by themselves with unlimited resources. (hahaha)

    And of course, even more delays.

    Third Hand: Competition!

    To Herbalife, everybody is competition. GNC is competition. Supermarket and Pharmacies are competition. Competition solves all problems. If there is competition, then critics are worthless as there is no problem. “Give competition a chance”, or “competitive market will balance out if you give it time”.

    Next would be “government regulation will stifle innovation/competition”.

    Next would be “we don’t need new regulations when existing ones work fine”

    Herbalife can’t use the “people employed” inflation, as it claimed it will reclassify the lowest rank distributors as “customers”. However, how does that affect its “distributor count” is unsure. However, it had played the “jobs” card in claiming the Latino community had been “empowered” through Herbalife.

    DSA may have played the “individual power” card, claiming that individuals should be responsible for what they get involved in, and the industry should be EXEMPT from lawsuits and such. I have to go look it up.

    Fourth Hand: Confusion and Obfuscation

    MLMPetition, Salty, Fitpatrick, Taylor, and the rest of the MLM Petitioners have gotten the public debate thus far, so DSA / Herbalife are in trouble. However, they have a few more cards to play.

    Red Herring is basically throwing out bunch of stuff to confuse the issue.

    DSA has been engaging in this by doing end-runs on various Federal decision by claiming it’s a state issue, such as getting Utah (MLM Haven state) and a few others to adopt “any self-consumption is okay” exemption to anti-pyramid laws. The reverse is also true… If the state’s on top of the issue, like Montana, they’ll claim it’s a Federal issue.

    Right now Herbalife’s caught between two, as there’s calls to both AG Harris and FTC to investigate. But DSA have been successful in creating a “patchwork” of different state and Federal laws, and it can be used to argue against even MORE laws or reforms.

    Next would be “duh” and “nitpick”, where DSA and Herbalife intentionally misinterprets what the reformers or even Ackman are calling for, and when they’re cornered, they’ll pick one issue with the reform proposal and argue that instead. There’s also “muddy waters” when they bring in extra issues to broaden the field. Don’t forget “poison the well”, like “those who oppose us are friends of Ackman”

    Next on the list is “exploit ignorance”, where DSA or Herbalife withhold information, such as “how much retail does Herbalife really do”. DSA can implement one or two changes and fix most of the problems in MLM overnight, but it does NOT want to, so they don’t ever mention it.

    Fifth hand: false expert and growing petulance

    We’re almost at this stage, or may have reached it.

    Herbalife have recruited many Latino speakers and consumer groups to speak on its behalf, and CEO Johnson had even circulated a letter it wants distributors to sign and send to their congresspersons.

    It has also paid off Coughlan above to write a paper endorsing herbalife’s model as a false expert.

    Next on the list is petulance, but this comes in many shades of gray, such as “Washington bureaucrats! Bleh!”, “We can self-regulate! (DSA’s code of ethics…)”, “You’re a ninny!” “We’ve always done it this way!”

    Though it’s clear DSA and Herbalife have done most of these in one way or another.

    Sixth Hand: Gloves come off

    By this time denialist are serious losing, so they try some desperate gambits

    Bull / Bear Market — either way, don’t let the government get involved… not needed!

    “Big Government” are often raised as an argument against more regulation

    One gambit Herbalife may claim is “we’ll just shift to out-of-US operations”, but US is still its biggest market and this won’t go far.

    Giving money to lobbyists and campaign donations sure wouldn’t hurt. Herbalife outspent Ackman 10 to 1 in 2013 according to NYPost.

    Then there’s “this law is not enforceable” or “we’ll just sue to delay / stop such laws even if it passes”

    There’s also “unconstitutional” or “unAmerican” (already often used, as if MLM is an American right)

    And finally, “we’ll lose money”, which really means its stock valuation may fall.

    1. That’s good analysis that proves MLM has a self-serving blindness: we have no problem, any one who said we do are “negative people”.

      Incidentally, I had a quick analysis of Avon. Avon is failing MLM badly. It’s losing market share AND reps since adopting MLM in 2005. I followed Fitzpatrick’s lead and found the reference where even Avon admitted in 2009 that the opportunity is its own best seller, not one of their products. Even their Superbowl ad was about the opportunity, not the products.

      Yet you don’t hear the horror stories about Avon, do you? Or at least, much less of it than Herbalife or Amway or other MLMs? I know, less than 10 years at it and all that…

      But when compared with other MLM companies that are doing MUCH better during the same period… Even NuSkin, which is in the same sector and all…

      Perhaps… Avon is just not screwing over its reps hard enough? ;)

      1. Fitzpatrick on Avon and MLM:

        ‘A grim lesson to be gained from this essay may be that in the direct selling area, sham is the only model that now works; fraud fares better than fairness, and mendacity wins over transparency. Avon, to the extent that it holds on to remnants of legitimate direct selling for commodity cosmetics – a model that is manifestly obsolete – will continue to decline.’

  12. Herbalife just told us about how desperate SD and Ackman are!

    “These two points — that we have millions of customers and the majority of our
    members joined for product discounts, not for the business opportunity
    disprove Ackman’s thesis. Our transparency with figures like these the fact that they are true while what Ackman says is false and misleading has forced him to move away from an easily dispelled pyramiding argument and instead pursue an anecdotal victim campaign.”

    “As many of you know, Ackman, a Wall Street gambler who placed a reckless
    $1 billion short bet against our company and stands to gain financially if
    Herbalife loses has managed an expensive publicity campaign filled with false
    and misleading information about Herbalife. Most unfortunately, we have
    seen Ackman’s false and misleading statements being repeated by others. The
    saying goes, “You can be disappointed, but don’t be surprised.””

    Matt Stewart said to us:

    “Herbalife opened 2013 fiscal year with 3.2 million distributors.

    According to the company’s regional key metrics disclosure:

    2,166,695 new distributors were recruited in 2013.

    Herbalife ended the year with 3.7 million distributors. Solving for X:

    1.6 million people resigned globally from the Herbalife Pyramid Scheme in 2013

    This data point is important to consider against the following assertion from Herbalife’s CEO Michael Johnson: Bill Ackman is a “Wall Street Gambler” who has made a “reckless” $1 billion bet against Herbalife common.”

    1. @Jack

      I’d like to spell out that math problem Omri alluded to. It goes like this:

      3.2E6 + 2,166,695 – X = 3.7E6 (E6 means “times 10^6”)

      where X equals the number of distributors that would have had to have quit to make the year start and year end numbers actually balance.

      so doing the happy algebra thing:

      -X = 3.7E6 – 3.2E6 – 2,166,695
      now mult both sides by (-1) and rearrange on rhs for prettiness.

      X = 3.2E6 + 2,166,695 – 3.7E6

      X = 1,666,695. But significant figures probably says we should round. So we get:

      X= 1.7E6. Q.E.D.

      Omri got 1.6E6. He probably chose to round something down earlier in the problem. But hey, with Hetbalife measuring suffering in the millions, a mere hundred thousand this way or that is like chump change.

      Furry cows moo and decompress.

    1. I hate that seekingalpha site they won’t even let you look at page two unless you sign up. Like as if they’re god’s gift or something.

      Sorry, I am tired as well. I can rant, but detailed analysis is beyond me just now.

      1. @Wyrd, I know, annoying.

        It’s free, at least. You do have to choose five stocks to follow and you only receive articles on those stocks. It has been a pretty benign relationship for me with Seeking Alpha itself….though not benign with some of the other subscribers and article writers defending MLM. The MLM-company article’s comments sections are nasty like no others. Besides HLF, I follow NuSkin, and that turned interesting recently with another great article by Fitzpatrick on the history of NuSkin after the People’s Daily article came out in China. I just randomly chose three other companies to follow on SA…I should probably edit my other companies to include Avon and Tupperware, since my real interest is in this beast MLM.

    2. Chang: For me there are many, many things wrong with that Fusion Research article. I am not sure which numbers in particular you are especially interested in. The comments section deals pretty well with the bad info/bad analysis. The highlight of the comments section is where William Keep himself, Vander Nat’s co-author, shows up and refutes Fusion’s interpretation/analysis of the 2002 paper, especially as applied to HLF. It’s so great! Then the herb-heads in the comments attack William Keep! Really bright, guys, antagonize Vander Nat’s colleague. Great idea, herb-heads.

      A couple of stand outs from the comments:

      -Fusion had to actually go back and edit the article to change one glaring false statement. The original text is quoted in the comments section, so you can still see it,

      -In the article, Fusion makes a major assertion that 31% of product is shipped directly by Herbalife to the outside-the-system customers of HLF distributors. Whoa there. It is reported by Fusion as if it’s a hard fact. In the article, Fusion says that he gets this information from an HLF conference call of some type. William Keep points out in the comments section that there is absolutely no hard evidence to support this assertion, other than just the fact that HLF said it (and I note there is one very well known case already of Michael Johnson pulling a number out of his a$$ on national TV). My own reaction to the 31% number is: how coincidental that is the exact number….backed up by no evidence…given the Amway 70% rule. Sheeze.

      Douglas Brooks also makes one extended comment on the article.

      This was a while ago. These days, the HLF article comments sections are completely dominated by herb-heads, with only a very few normal-world commenters bothering anymore. Most recent articles challenging HLF are by Quoth the Raven or Matt Stewart, who are shorting the stock.

  13. The problem I find with the research is how much they have to “fudge” to make the numbers fit.

    Their logic can be roughly summarized as

    1) More than 50% is okay, less than 50% is not okay.

    2) If we assume 31% is really retail (i.e. drop-shipped to non-distributors), and assume half of the remaining 69% is sold retail (and half is self-consumed), we have 65% which is more than 50%.

    3) HLF = Okay!

    The problem where is the entire scenario is based on two assumptions, one slightly more solid than the other.

    1. Well, furthermore, Chang….the way the beginning part of the article reads to me….Fusion seems to be saying in the first half of the article (with the equations), that, as long as HLF has enough money to pay all earned commissions to the upline, then it’s not a pyramid scheme. I think that’s what his idiotic equations boil down to. AND he tries to claim that is what Vander Nat’s 2002 paper says too, about the definition of a pyramid scheme.

      That is just wrong, and is a misinterpretation of Vander Nat (as William Keep stated in the comments).

      Fusion seems to be saying, ignore the churn, the people at the bottom losing money, that doesn’t matter…as long is there is enough $$$ so that the commissions the upline are owed are paid, then everything is copacetic. It is sort of similar to the “oh, but it’s a sustainable pyramid scheme” argument (which appeared also on Seeking Alpha last year) though Fusion goes further and says it is not even a pyramid if paying the winners at the top is sustainable for a long time.

      Then he goes and tries to make seperate (equally bad) arguments about outside sales to cover all the gaping holes in his first bad argument,

      That’s how I read it anyway.

  14. This man shows you a way to trick people into calling him back for a MLM sales pitch. He uses it for the Empower Network tricking program, but maybe they use it for other MLM tricking programs, like the Herbalife tricking program. The reason I do not do that MLM tricking stuff is because I am already broke, so I don’t need their help getting broke. If I ever get not broke, then I might call them to help me get back to being broke.

    1. @Luther,

      Yeah, I’m broke too. This video is a good example of one of the things MLMs do to people–besides making them broke, MLMs encourage and usually reward deceptiveness.

      The cut-off the message trick wouldn’t work on me. To me, it would just seem kinda lame, but then I’m not a prospect.

      Also, and I may have said this once before, cool avatar you got there.

      Furry cows moo and decompress.

  15. It is clear to me that the other half of this business is $$$$ laundering for the drug cartels..

    1. Wow, lots of scam apologists coming out in the NYT comments and bashing Pershing Square for spending $264,000 on lobbying last year while Herbalife spent $1,890,000 – over seven times as much (figures from the Center for Responsive Politics’

    1. It’s neat-o.

      But Herbalife’s statement can be translated as saying: “Bring it!

      So they are ludicrously confident.

      And how many of the remoras (as @K. Chang calls them) currently remain attached to the titanic bottom feeder named Herbalife? How are things looking in Belgium? So let’s not break out the cake and ice cream just yet.

      I predict this is a step in a slow-motion orchestrated dance between the FTC and Herbalife–one where Herbalife ultimately gets just a wrist slapping. Then in a years time, when the press is bored and not looking, the remoras can latch back on.

      Still. A filing is a Thing–an Event.. So maybe now finally is the time for a for-real grass roots campaign.

      Furry cows moo and decompress.

      1. @Wyrd ::

        They might be trying to give off a “Bring it!” vibe … but that’s bullshit. They have piles and piles of dead bodies buried in their basement … the publicly revealed stuff is just the tiny tip of their intentional atrocities ice {Carla} berg. They can endure less sunlight than a teen vampire. I know I’m mixing my metaphors … but I’m fucking excited!

    2. @2=2=4

      In my previous comment, I forgot to be positive. And that’s important. So, thank you for sharing that information. That was helpful.

      Also, if linking to flckr still works, here maybe is a screenshot of what just happened to Herbalife’s stock. Of course this is just a one day thing. Of course it’ll probably recover. But let’s just focus on the happy moment.

    1. Here is some infos from a commenter on a youtube video. (The video seems typical of a “network marketing” “affiliate” or “distributor”– i.e. rambling, bad audio, kind of like the cliff notes version of being a salesman, and ultimately excruciatingly painful to try to sit all the way through. .. And it’s only 4min 45sec!)

      Video link:

      About the comment: I have not fact checked it really–that would take a while. But I have verified the links seem to go where the commentor said they go. (Also, it’s actually two comments–one posted as a self-followup to the first.)

      Nebula Haze
      1 week ago (edited)

      Kannaway products are garbage! It’s a money-making scam! Don’t waste your money! These people are ruining patient’s live by selling them poorly made hemp oil and telling them it’s a cancer cure. It’s not real Rick Simpson oil, or anything made from real medicinal cannabis plants. I immediately block anyone I see who’s promoting Kannaway – they are out to make money, not help patients!

      Nebula Haze
      1 week ago (edited)

      +tom tursi I’ve gotten some information from Kannaway reps, and some from reports about this company from around the net. I’ll try to sum up everything I know here, but feel free to let me know if you have any other questions.

      First off, Kannaway is a subsidiary of MJNA (Dixie):

      This company has known QC (quality control) issues according to their ex-QC manager ( and independent tests. They were formerly marketing their product as “Real Scientific Hemp oil” and I know someone who purchased the oil and these were the official test results when the oil was sent to get tested (it shows it is more than 99% inactive material, and a big part of the active cannabinoids is THC instead of CBD):

      I’m not saying that all their oil is bad, but there is some concern for quality control issues because some batches of oil are being sent out and getting tested with results like above. The fact that a company chooses an MLM (multi-level marketing business) scheme after having product sales do poorly on their own usually indicates there are inherent problems in scalability and QC maintenance. I believe if their oil is as good as they say it is, it would have been flying off the shelf for the first year, and they wouldn’t have had to turn to a pyramid scheme to try to continue making sales.

      Here’s the whole quote from their former head of science, thanks to reporting by Martin A. Lee at

      Tamara Wise, the former chief scientist at Medical Marijuana Inc and Dixie Elixirs, denounces the company and their products in her Nov. 20 facebook post. Wise wrote:

      “I’m tired of so called CBD companies claiming that what they provide is medicine. Anyone using a CBD from hemp product please be aware of what you’re actually getting b/c it is not what you think. These formulations start with a crude and dirty hemp paste (contaminated with microbial life! I have seen this and these organisms decompose the paste. The paste perhaps even contains residual solvent and other toxins as the extraction is done in China ) made in a process that actually renders it unfit for human consumption. What these companies are doing is criminal and dangerous. In fact MJNA’s RSHO is literally just this hemp paste diluted in hemp seed oil. No refinement at all!!! And what Dixie Botanicals is offering is beyond disturbing. I cannot keep quiet any more. And since I formulated most of these products as head of Dixie science, I feel responsible for spreading the truth. I left Dixie for ethical reasons but it is not enough to just walk away. These frauds need to be exposed for what they are. Look out for my tell all article coming soon and feel free to contact me directly with questions as it is time to blow the whistle. Let’s keep this industry pure and safe.” — Tamar Wise, formerly head of Dixie Science.

      Furry cows moo and decompress.

      1. … so as a follow-up, re the recent since-deleted spam, and at the risk of triggering Even More webcrawling Bots… I’d just like to mention that a 0.5 second googling reveals to “Rick Simpson” to be a cancer cure quack.

        I don’t know if marijuana might have some sort of effect on some sort(s) of cancer(s). I highly doubt it. It’s difficult to know anything for real about marijuana apart from its recreational potential and pain alleviation potential because anything else would require research, and it seems to still be very difficult to do scientific research on marijuana. So all we have is guessing.

        However, if there were any real evidence of marijuana being a miracle cure for any kind of cancer, then things would change. And quickly. One thing conspiracy theory folks consistently overlook is: in the face of substantial overwhelming evidence, “the general public” is actually very pragmatic. (That’s why, for example, pyramid schemes have to obfuscate so much.) Nothing would change marijuana’s negative perception faster than if it could suddenly act as a miracle cancer cure.

        Furry cows moo and decompress.

    2. Apparently the supplier just put out a press release saying “we had NOTHING to do with that business, we just wholesale them our stuff (don’t call us if anything is wrong)”

  16. This guy, professor William Keep seems cool. But then again, the article was sort of designed to present him in that light.

    Still–bringing in math is like death to smoke and mirrors, so that’s good. Or at least it would be except that the real challenge is always trying to separate out the brochure’s statements from the truth. That’s not necessarily a math problem.

    Still, this guy seems interesting.

  17. Um, is Salty Droid still alive? I thought he would have written about Kevin Trudeau by now.

  18. I’ve never met a single person in my 35 years on this planet that’s made a dime off of Herbalife or any MLM for that matter. I think that’s really saying something.

    When I was younger, I had the pleasure of throwing these people out of my house. This was years ago before everyone had cell phones. The next thing I did was put a message on my answering machine thanking the caller for phoning into the “Anti-Amway Attack Force”. They never bothered me again.

  19. @”john”

    How bad is this spam? It’s so bad,that when the notification of this comment showed up in my email, it activate the spam filter and caused gmail to doubt the authenticity of the sender.

    Probably this happened because the link looks like alphabet soup.

  20. Salty and the rest of the gang… Got a question. I was just thinking about, of all things, a “Roach Motel”… where its’ easy to get in, but hard to get out. (Or it’s more “Hotel California”… you can check out any time you like, but you can never leave)

    I seem to recall that most MLMs will let any affiliate sign you up, often online, but if you want to get out, you have to write a letter to corporate, and your upline will get notified so they can attempt to shame you into staying.

    Any horror stories about HLF, Vemma, or other evil MLMs, about getting out? Or is it just a matter to stop paying and insult any one who call you up and trying to get you back in?

  21. From the MLM participants I’ve known and the stories I’ve read here and on other sites, my impression is that it’s not difficult to quit MLM but it’s very difficult to recoup any money.
    Considering simpler “free trial – just pay shipping” continuity schemes and “money-back guarantees” that aren’t, it can be difficult to get a refund or chargeback once scammers have your money. Then add in that MLM participants are encouraged to “give it a chance” until they’re out of the refund and chargeback window and to “invest” not only in product but in leads and marketing materials from third parties and nonrefundable services like websites and training events. That means there are multiple vendors with different return and refund policies and deadlines and some costs that are just sunk.
    In the Herbalife unsuccess stories on (also republished with additional unsuccess stories at Pershing Square’s Facts About Herbalife), an anonymous poster on page 5 says their upline refused to buy their inventory. On page 4, Joel says his inventory refund was less than half what he paid due to a restocking fee. On the first page, Peggy says she tried to sell her inventory on eBay and received a cease and desist letter from Herbalife.
    It’s different when people at the top of the pyramid decamp to another MLM because the company’s afraid they’ll take their entire downlines with them, and there are usually rules in the “distributor agreement” about what they can and can’t do. Here’s an MLM attorney post about these situations.
    It’s not hard to quit, but the damage is already done.

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