Vemma News Stories

[JustTooMuchTime]

Setting up a thread here for Vemma - anticipating we'll be seeing quite a bit of news about it now that Herbalife is under scrutiny.

[JustTooMuchTime]

"I always want to stay on the good side of the FTC because they have guns,” Boreyko told The Post.

Vemma, which recruits students to sell its caffeine-fueled drinks on college campuses, will no longer require salespeople to make minimum monthly product purchases of $150 to qualify for commissions. The company will also end sign-up fees."


Even some industry insiders think product purchase requirements have to go.

“It would fix a lot of issues,” MLM lawyer Kevin Thompson suggested on a conference call last month with Barclays analyst Meredith Alder. “What happens is a lot of people buy stuff they never would buy in quantities, they would never have purchased just to qualify for bonuses.”

Thompson admitted the change could make it difficult for some MLM companies to survive.

Verve energy drink company tries to stay off regulators (http://nypost.com/2014/04/03/verve-energy-drink-company-tries-to-stay-off-regulators-radar/)

[ribshaw]

I happened to have this from another thread. Just in case people wanted to see how much money they are not going to be making buying overpriced energy drinks.

7367

[JustTooMuchTime]

"An Italian watchdog authority has ruled that Vemma operates an illegal pyramid scheme and prohibited the supplement company from spreading or continuing its unfair business practices in Italy.

The investigation by Italy’s Competition and Markets Authority (AGCM), which sanctioned Vemma €100,000 (roughly $140,000), began in June 2013 after two consumers complained about the Arizona-based company’s marketing and sales practices. During the investigation, Vemma proposed changes to its Italian compensation structure. It also announced changes in its U.S. structure. But a TINA.org analysis has found that the changes to the U.S. compensation plan do not make the plan significantly different from the one Italian regulators found to be a pyramid scheme.

Vemma Nutrition Company CEO Benson K. Boreyko said the company is appealing the Italian decision."

Full story:
https://www.truthinadvertising.org/vemma-deemed-pyramid-scheme-italy/#start

[JustTooMuchTime]

Headline: Firm targeting college students draws scrutiny


"The Federal Trade Commission has received more than 160 complaints nationally against the Arizona-based company Vemma, including a dozen here. The Enquirer obtained the complaints after filing a Freedom of Information request. Consumers are claiming that the company preys on young adults disillusioned with the current economy, enticed by get-rich promises.

One Mason parent reported to the FTC that his son dropped out of college and seemed "brainwashed," no longer able to think for himself as he chased his get-rich-quick dreams and denounced family members who questioned the company. And a UC student left the Vemma sales force after he watched classmates he'd recruited leave school in financial straits."

Full story:

Firm targeting college students draws scrutiny (http://www.kare11.com/story/money/business/2014/07/13/firm-targeting-college-students-draws-scrutiny/12585657/)

[littleroundman]

USA Today (http://www.usatoday.com/story/money/business/2014/07/13/firm-targeting-college-students-draws-scrutiny/12585657/) this week featured a story on Vemmas' increasing presence in Cincinnatti:

http://imageshack.com/a/img661/7104/7776ec.jpg

You can read the full article here on USA Today.com (http://www.usatoday.com/story/money/business/2014/07/13/firm-targeting-college-students-draws-scrutiny/12585657/)

[Joe_Shmoe]

From the Sunday Times today. Students targeted by elixir (http://www.thesundaytimes.co.uk/sto/news/uk_news/article1442210.ece?shareToken=2ebfb600f5ff66e69851 33759a4a2b38)


http://www.thesundaytimes.co.uk/sto/multimedia/dynamic/01085/01_NH03PYR_2__1085857k.jpgVemma promotes its 'healthy' energy drinks on Facebook

AN AMERICAN company accused of enlisting young people into a “pyramid scheme” involving energy drinks is now targeting British students.
A social media campaign called the Young People’s Revolution UK (YPRUK) has attracted hundreds of 18 to 25-year-olds with the prospect of a high salary, independence and a luxury company car.
All they have to do is sign up to a company called Vemma, which often involves bulk-buying hundreds of pounds’ worth of “healthy” energy drinks and enlisting as many friends and family as possible to do the same.

In America Vemma has been the subject of 170 complaints to the Federal Trade Commission (FTC) and warnings from colleges and universities, while in Italy the company was fined for operating an illegal “pyramid scheme”.
Vemma denies it operates a pyramid scheme and instead describes the business as a legitimate “affiliate marketing” model. In the last year about 1,200 people in Britain have become Vemma “affiliates” and have set up online accounts to promote the drinks and enlist new members.
The YPRUK Twitter accounts and Facebook pages are filled with inspirational quotes about leadership, photographs of beautiful “gym-bunnies” drinking the product and young men posing with their Vemma “company cars”.
One post on a Vemma page based in Newcastle upon Tyne claimed the health drink can help to cure breast cancer.
Once the affiliates have signed up to Vemma they are encouraged to make a list of “at least 200” names from their Facebook friends and phone contact books.
In a recording of one Vemma training session obtained by The Sunday Times, a young UK affiliate tells his sales team to call every name on their lists under the pretence of “catching up” with them.
“Don’t bring up Vemma too early, let the conversation lead to Vemma,” he said.
Vemma affiliates have also organised meetings in different parts of the country, from Wolverhampton to Newcastle, and UK members have been flown out to the company’s annual conference in Las Vegas.
One 19-year-old student, who asked not to be identified, said he had been invited to a “secret” meeting in west London last month by a friend. “There were about 30 people there and it was a really slick presentation,” he said.
“They went on about how great the company was and how successful it would make you but they didn’t go into any details about how it actually worked.”
Despite this two of his friends signed up on the spot, handing over £120 each.
Vemma’s promotional videos make impressive claims about the earning potential at the company, with the most successful affiliates becoming multimillionaires.
UK affiliates have claimed they will be able to pay off their parents’ mortgages and earn more than international sports stars.
The company’s own financial records, however, reveal that 98% of Vemma affiliates earn less than £7,250 a year from the scheme. That is before taking into account the amount they have to spend on repeatedly buying the product.
Truth in Advertising, an American consumer advocacy group, claimed its research showed that Vemma affiliates were more likely to lose money rather than to make any.
The complaints to the FTC range from concerned parents whose children have dropped out of college to sell Vemma, to former affiliates who claimed it was a “scam”.
Benson Boreyko, Vemma’s chief executive, defended the company and said it offered “a great business opportunity for those who are interested”.
He added: “We employ a number of policies that distinguish our model from that of a pyramid scheme and take great care in protecting our sales affiliates from personal risk while doing all we can to support them in their success.”
He said that Vemma had addressed most of the complaints made by the FTC and was appealing against the Italian ruling.
@robin_henry (https://twitter.com/Robin_Henry)

[Doc Bunkum]

Vemma Verve False Ad Class Action Moved to AZ Federal Court (http://topclassactions.com/lawsuit-settlements/lawsuit-news/50982-vemma-verve-false-ad-class-action-moved-az-federal-court/)
March 6, 2015


A class action lawsuit accusing beverage company Vemma Nutrition of misleadingly marketing its Vemma Verve energy drinks as “doctor formulated” was moved by a federal judge to the a federal court in the company’s home state of Arizona...

[littleroundman]

Entirely predictably, news today the US Federal Trade Commission (FTC) has moved in on multi level marketing company Vemma.

http://imageshack.com/a/img538/4189/BaQ43k.jpg

You can read the entire original story here on Ethan Vanderbuilt.com (http://ethanvanderbuilt.com/2015/08/24/vemma-served-by-the-ftc/)

http://imageshack.com/a/img540/3023/ulvakn.jpg

You can read Oz' take on the situation here on his BehindMLM (http://behindmlm.com/companies/vemma-served-with-ftc-complaint-about-autoship/#comment-345331) blog

[EthanVanderbuilt]

I have heard reports that their office is actually locked up, but I don't know how reliable they are. Vemma Raided by FTC on 8/24 (http://rvasocial.strikingly.com/blog/vemma-raided-by-ftc-on-8-24)

[littleroundman]

UPDATE: August 26:

BehindMLM.com (http://behindmlm.com/companies/ftc-vemma-is-a-200-million-illegal-pyramid-scheme/[/url) is today reporting:

http://imageshack.com/a/img910/6471/dJcFqD.jpg

You can read the entire original article here on BehindMLM.com (http://behindmlm.com/companies/ftc-vemma-is-a-200-million-illegal-pyramid-scheme/)

[Soapboxmom]

There is a hilarious thread here on Vemma (http://www.realscam.com/f9/vemma-ultimate-pyramid-scheme-1874/). Serial scamster Jack Weinzierl was a big promoter for a short time. He didn't make any real money and jumped and dumped in record speed.

[littleroundman]

http://imageshack.com/a/img538/8279/vmLMMs.jpg

http://imageshack.com/a/img540/6619/J05Fi6.jpg

http://imageshack.com/a/img901/3209/K0G4Ck.jpg

http://imageshack.com/a/img661/4016/UESemY.jpg

http://imageshack.com/a/img661/9576/ulFB3h.jpg

[littleroundman]

A very relevant find by Oz over on his BehindMLM (http://behindmlm.com/companies/ftc-vemma-is-a-200-million-illegal-pyramid-scheme/#comment-345512) blog


https://www.youtube.com/watch?feature=player_detailpage&v=zqgd8dC7xa8
http://imageshack.com/a/img537/6112/l926a9.jpg

[littleroundman]

http://imageshack.com/a/img538/6468/ia8s6E.jpg

FTC press release (https://www.ftc.gov/news-events/press-releases/2015/08/ftc-acts-halt-vemma-alleged-pyramid-scheme)

[littleroundman]

http://imageshack.com/a/img540/820/dbi1EC.jpg

Vemma 2014 Income disclosure statement (https://www.vemma.com/backoffice/pdf/income-disclosure.pdf)

42.11% of US participants earn an average of $598 annually

36.97% of US participants earn an average of $1232 annually

42.46% of Canadian participants earn an average of $1163 annually

36.56% of Canadian participants earn an average of $1516 annually

42.88% of worldwide participants earn an average of $579 annually

37.32% of worldwide participants earn an average of $1212 annually

N.B. A participant for the purpose of this estimate, includes all Vemma participants who make a sale of Vemma products within the one year period

[littleroundman]

http://imageshack.com/a/img537/8417/tgK014.jpg

Vemma.com (https://www.vemma.com/)

[Soapboxmom]

Vemma Served By The FTC - Ethan Vanderbuilt (http://ethanvanderbuilt.com/2015/08/24/vemma-served-by-the-ftc/)

Get your barf bags ready. Troy Dooley is spewing his usual sewage yet again! This guy gags maggots!

[GlimDropper]

Uh Oh, looks like Vemmas fixing to open a Blastcap of Whoopass on the FTC:

http://i.imgur.com/81Co0ml.png

[Soapboxmom]

Uh Oh, looks like Vemmas fixing to open a Blastcap of Whoopass on the FTC:

http://i.imgur.com/81Co0ml.png

Holy Yoli! The FTC is no doubt shaking in their boots knowing windbag extraordinaire / The Savior of MLM Clem Lemons is on the job. I mean just look at his prior history of stunning victories in court and sparring with attorneys online:

http://www.quatloos.com/Q-Forum/viewtopic.php?f=5&t=6729&hilit=len+clements#p110124

(http://www.quatloos.com/Q-Forum/viewtopic.php?f=5&t=6729&hilit=len+clements#p110124)http://quatloos.com/Q-Forum/viewtopic.php?p=34237#p34237
\

Just when we thought this couldn't get any better!!! :RpS_w00t:

[GlimDropper]

I must confess to being a little divided here. Not that I have any love for Vemma or for MLM in general but I'm also very leery of government over reach. The FTC basically closed Vemma down and attached all the assets before they were given an opportunity to give their side of the story. I've read the complaint, the exhibits and orders that have been made public and I understand the arguments being made. I just want to point out that even if the FTC fails to win this case they will have largely destroyed this company. Again, this isn't coming from any affection on my part for Vemma but rather from an abiding respect for due process of law.

That being said this case could be the most important MLM lawsuit of this young century. Vemma, quite simply is a DSA member in good standing who is not doing anything that "almost" every other MLM out there is also doing. They have products, they are not price competitive with similar non MLM products so almost no one who isn't also a Vemma Affiliate is a Vemma customer. The prevailing attitude of the industry is that there isn't anything wrong with almost exactly 100% of your customers also being affiliates even though we all understand that from a cash flow perspective if almost all of the affiliates are almost all of the customers then almost all affiliates will lose money. There is no clear bright legal standard involved here and this fact has been exploited for years. Perhaps this is coming to an end.

Vemma was hit hard, you could say curb stomped. The ex parte TRO shut them down and created a receivership all before Vemma learned of the FTCs complaint. Originally September 3rd was the date given for Vemma to challenge the order but from what I'm hearing their legal team will be asking for an extra week to prepare. If the TRO isn't reversed or seriously amended Vemma USA will effectively cease to exist. There will still be a court battle but that will take months if not years and there's no way the affiliate base can hold on through all of that. That TRO is the key here but about the only way I can see them getting it overturned would be to prove they are in fact not a pyramid scheme. The FTC believes themselves to be sitting on a mountain of evidence and confident enough to initiate this action. On the other hand the MLM industry would sh!t bricks if they actually had to sell products to real customers so I expect Vemma is going to be getting a lot of direct and material aid in the next few weeks. This fight is going to be huge.


A late edit to add: Oz over at BehindMLM posted some comments from MLM attorney Jeffrey Babener. Well worth a read. (http://behindmlm.com/companies/vemma/babener-weighs-in-on-ftc-vemma-lawsuit/)

[littleroundman]

You know, since the beginning of known time, there's bee one rule that holds true in any situation.

It's a principle that will override any philosophy, ideology, fad, religious belief or political system.

That rule is: "THAT'S WHAT HAPPENS"

Even the most casual observer of the MLM industry could have predicted "this" was going to happen.Maybe not to Vemma specifically, but nothing is surer than somebody was going to get pinged.Check out JustToMuchTimes' first and second post when he started this thread, paying particular attention to the dates and quotes included:

http://imageshack.com/a/img673/507/701dfs.jpg

http://imageshack.com/a/img905/2071/xI2rXU.jpg

The only surprises here are just how much laziness, arrogance or just plain stupidity must exist within the direct sales and / or MLM industries to allow this to happen, and by the amount of "shock" from within the industries when it did

[GlimDropper]

I need a reality check here. What kind of world is this when former ProSun Queen Nanci Jo Anne starts making sense on MLM compliance? Yea at about the five minute mark she goes off the rails on Zeek and Telex Free and a few other stray hairs along the line but aside from that she is kinda close to nailing it:



https://www.youtube.com/watch?v=yC5Mzy6c8rw

[Soapboxmom]

This just gets better and better.

Vemma mount affidavit defense against FTC lawsuit (http://behindmlm.com/mlm/regulation/vemma-mount-affidavit-defense-against-ftc-lawsuit/)

I didn't quote as the entire read is so worth it. MLM attorney Kevin Thompson goes off on one of his wandering diatribes begging Vemma's clueless and faithful to author Affidavits. That clown is best buds with Clem Lemons which explains a whole lot.

There is simply very little retailing going on and that is true for every MLM. In a real business each rep has hundreds of customers and makes a living off of selling the product to end users that are not in the pay plan. End of story!

[Whip]

Uh Oh, looks like Vemmas fixing to open a Blastcap of Whoopass on the FTC:

http://i.imgur.com/81Co0ml.png

LMAO. mr. obscurity can't stand not being in the limelight.

[Whip]

holy yoli! The ftc is no doubt shaking in their boots knowing windbag extraordinaire / the savior of mlm clem lemons is on the job. I mean just look at his prior history of stunning victories in court and sparring with attorneys online:

http://www.quatloos.com/q-forum/viewtopic.php?f=5&t=6729&hilit=len+clements#p110124

(http://www.quatloos.com/q-forum/viewtopic.php?f=5&t=6729&hilit=len+clements#p110124)http://quatloos.com/q-forum/viewtopic.php?p=34237#p34237
\

just when we thought this couldn't get any better!!! :rps_w00t:

150 iq!!!!

[GlimDropper]

This just gets better and better.

Vemma mount affidavit defense against FTC lawsuit (http://behindmlm.com/mlm/regulation/vemma-mount-affidavit-defense-against-ftc-lawsuit/)

I didn't quote as the entire read is so worth it. MLM attorney Kevin Thompson goes off on one of his wandering diatribes begging Vemma's clueless and faithful to author Affidavits.


The less than probative value of the affidavits is well covered over at Oz's but I have a hunch there's a second motive. Vemma's affiliate base is being vultured big time by other companies and giving the reps something to do that makes them feel like they're helping the company might keep moral up at least until the hearing.

That and I do recall an obscure legal precedent for this sort of thing swaying a court case:


https://www.youtube.com/watch?v=81fJpj_cTPQ

[Soapboxmom]

Here we go. The vultures are already picking at the corpse:


From: Fred Dudley [mailto:frederickdudley@gmail.com]
Sent: Wednesday, September 02, 2015 9:03 AM
To: soapboxmom@hotmail.com
Subject: I have a spot for you direct to the company, Heather…

DearHeather,

First, I deeply apologize for everything that has happened at Vemma. I pray that you and your family are in a good place.
Please take a moment to review this exclusive, life-changing opportunity we've reserved for you. We have a position for you which is direct to the company and wanted to know if you are interested?
My associate is a scientist who works with NASA just created a life-changing product that medical centers & cancer doctors are ordering. This breakthrough Life Science product was developed on the Space Station.

By the way, there is no cost to join our affiliate marketing company, and we are currently doing business in a few countries as well...

My warmest regards,

Fred Dudley
CEO
Keystone Advantage Partners (http://www.keystoneadvantagepartners.com/)
155 N. Harbor Dr.
Chicago, IL 60601
773-486-2500 (tel:773-486-2500) Office
314-619-8645 (tel:314-619-8645) Call or Text me at any time


https://docs.google.com/uc?export=download&id=0B21VkKHi7ba8czcwemsyeEdtODg&revid=0B21VkKHi7ba8WHFMbXIvVEpsNkllSzFHakNVeEMzVmR IRE80PQ
Feel free to connect with me and my 10,000+ colleagues on LinkedIn (https://www.linkedin.com/in/freddudley)


Never buy another business card. (http://myndsheer.com/fred)
CLICK here to create your own FREE Virtual Business Card (http://myndsheer.com/fred)
He is out in space alright. Herbalife is just another Vemma.

[Luzer]

I hope Vemma and Herbalife get shut down by the FTC. Time to stop the scammers.

[Soapboxmom]

How energy drink firm Vemma ended up in feds (http://www.usatoday.com/story/money/business/2015/09/02/energy-drink-firm-vemma-ended-feds-sights/71612288/)

The mainstream press is all over this! Awesome!

[Whip]

so......in a 228 page transcript of a preliminary injunction hearing, self proclaimed 'court certified expert' and (his own)world renowned mlm brainiac with the 150IQ (LMAO always funny) isn't mentioned once. How can that be?

12084

[littleroundman]

so......in a 228 page transcript of a preliminary injunction hearing, self proclaimed 'court certified expert' and (his own)world renowned mlm brainiac with the 150IQ (LMAO always funny) isn't mentioned once. How can that be?

12084

Even Vemma isn't THAT stupid

[Soapboxmom]

Herbalife/MLM - Ethical Factor In The Market Equation - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha (http://seekingalpha.com/article/3519776-herbalife-mlm-ethical-factor-in-the-market-equation?auth_param=184eqq:1avnuge:2843cb9a076b05f d6617e1f200d49554&uprof=45&dr=1)

This incredible article landed in my box and it is so worth the read. Here are a few of the awesome tidbits:


It doesn't seem to matter how distasteful an action or condition may be. "What matters is share price; don't you get it?" Yeah, I get it. I get that in the long run this thinking, be it in the mortgage banking industry or Herbalife/MLM, will ultimately kill the goose, leaving only a few who got in early with a golden egg. The point? Greed is rarely bridled; rarely sees or cares about the consequences of its impulse. Greed cheats the customer, shorting him in the exchange. And greed, always, always, always lies. And this is precisely what brought down Vemma-and yes, the company is no more, you watch. In the end, greed will bring down Herbalife and the MLM industry.
Why? Because in spite in Gordon Gekko's dictum, greed is not good for business. And as the script so brilliantly demonstrated, it has a way of turning on you. And that's important to remember right now. Because as this article will show, millions upon millions of people have been, and are being, lied to and shorted in the exchange. By whom, MLM CEOs and heavy-hitter MLM recruiter/promoters? Yes, but only because they are in the service of a business model that is itself a lie, and one that shorts the customer in the exchange 99% of the time. To understand this, one must identify the real product of MLM. Is it vitamins, beauty products, gasoline additives? No, it's the "business opportunity." And if you don't understand that, or chose to deny it, stop reading the article because you're lying to yourself and its content will be of no value....

the FTC could save a lot of time by just zeroing in on the Achilles Heel of MLM; its inability to comply with the "Ten Customer Rule." If your reps are receiving override commissions and do not have at least ten retail customers unassociated with the company as selling representatives, you're outta business! Slam of gavel....

Vemma is an example. Benson Boreyko-I have the say it-was a complete idiot. He got nabbed because he became so intoxicated with his success that he thought himself invincible, beyond being caught. This behavior, of course, is indicative of the criminal mind. It's one thing to turn a blind eye to field reps making outrageous income and health claims, quite another for the CEO to do so. And then Vemma goes targeting college students with: "Never mind a college education, we'll show you how to get rich with MLM." Is there any wonder why the company drew fire from parents and college deans?.....

Moving further, MLM doesn't get products into the marketplace at all, not the real marketplace, anyway. It creates a synthetic market of internal consumption, a market that would not otherwise exist if it weren't for the lure of making money by participating....

15. As evidenced by their sales and marketing activities and compensation plan, Defendants' business model depends upon recruiting individuals to participate in Vemma as Affiliates and encouraging them to purchase Vemma Products in connection with such participation, rather than selling products to ultimate-user consumers. Defendants' sales and marketing activities and their compensation plan place little emphasis on sales to consumers outside of the Vemma organization.
21. Defendants emphasize recruitment over product sales and stress the importance of recruiting new participants into the Vemma program.
Clearly, in clauses 15 and 21, the FTC is making a distinction between "participants" and what they are calling an "ultimate user." They are not the same. This entirely shoots down the argument advanced by MLM/Herbalife apologists on this blog to the contrary-hang it up, guys. The FTC wants real "retail sales," and they want a preponderance of them. Which points to the intent of the Amway '79 "Ten Customer Rule," the "safeguard" that kept the FTC from shutting the company down as a recruitment-driven pyramid scheme.
There isn't and never has been an MLM company that had at least ten customers (retail buyers that do not participate in the pay plan) per salesperson. Even the idea of ten customers per salesperson is beyond laughable. What salesperson in the real world selling small ticket items could make a living with only ten customers? The FTC is finally headed in the right direction and these egregious MLMs may finally see the legal action that is richly deserved!

[Soapboxmom]

Vemma executives fight FTC to reopen their Tempe energy-drink company (http://www.azcentral.com/story/money/business/2015/09/15/vemma-executives-fight-to-reopen/72326982/)


Government witnesses, in turn, pointed out that Vemma's revenue appeared to depend on the continual recruitment of so-called "affiliates" rather than the direct sale of nutritional products to consumers.

"Seventy-eight percent of sales were to affiliates, 22 percent to customers," said Kenton Johnson, executive vice president of Robb Evans and Associates, the court-appointed receiver.

http://www.gannett-cdn.com/-mm-/9065941e142eb769bb76794c742e08d1e14ee558/r=300/http/www.gannett-cdn.com/-mm-/9065941e142eb769bb76794c742e08d1e14ee558/r=300/http/www.gannett-cdn.com/-mm-/194189d41a484925a6ce532d59321688c87ad0e0/c=797-0-4253-3456/local/-/media/2015/09/04/Phoenix/Phoenix/635770036966837410-HOW4199.jpg
(http://www.azcentral.com/story/money/business/consumers/2015/09/06/controversial-energy-drink-maker-shut-down-feds/71669828/)




Johnson said he did not believe he could "lawfully and profitably" allow sales to continue because of the ratio of affiliates to consumers. He said selling products to affiliates likely would further the pyramid scheme and there weren't enough non-affiliated consumers to make a profitable dent in the inventory.

Testimony on Tuesday revealed Vemma has about 100 employees and up to 400,000 active affiliates worldwide....

Despite Vemma's line of nutrition drinks, the FTC alleges the company's primary source of revenue comes from the buy-in of new affiliates.

http://www.gannett-cdn.com/-mm-/9065941e142eb769bb76794c742e08d1e14ee558/r=300/http/www.gannett-cdn.com/-mm-/16381bd5bfbf98abd5fc7af1f2e60ceac9748868/c=0-347-4654-2976&r=x1683&c=3200x1680/local/-/media/2015/08/26/Phoenix/Phoenix/635761995561347854-HOW4171.jpg
(http://www.azcentral.com/story/money/business/2015/08/26/vemma-nutrition-temporarily-shut-down-pyramid-scheme/32419123/?from=global&sessionKey=&autologin=)




The FTC accused Vemma of targeting students to serve as affiliates with marketing materials showing "prosperous young people with luxury cars, jets, and yachts" and false claims that they could earn as much as $50,000 per week. The FTC said company officials suggested students could earn enough to bypass college by joining the company.....


The Italian government declared Vemma a pyramid scheme in April 2014. Switzerland’s State Secretariat for Economic Affairs said prosecutors are investigating the company. Consumer protection agencies in Germany and Austria also have issued warnings about the company and advised young adults to steer clear.....

(Boreyko)He criticized the FTC investigation, saying an undercover agent used selective information to build his case. In one point he said the agent highlighted sound bites from Vemma representatives to make the company look bad.

Those poor schleps need to throw in the towel. No MLM has any significant number of customers and they never will!

[Soapboxmom]

Vemma executives fight FTC to reopen their Tempe energy-drink company (http://www.azcentral.com/story/money/business/2015/09/15/vemma-executives-fight-to-reopen/72326982/)


Government witnesses, in turn, pointed out that Vemma's revenue appeared to depend on the continual recruitment of so-called "affiliates" rather than the direct sale of nutritional products to consumers.

"Seventy-eight percent of sales were to affiliates, 22 percent to customers," said Kenton Johnson, executive vice president of Robb Evans and Associates, the court-appointed receiver.

http://www.gannett-cdn.com/-mm-/9065941e142eb769bb76794c742e08d1e14ee558/r=300/http/www.gannett-cdn.com/-mm-/9065941e142eb769bb76794c742e08d1e14ee558/r=300/http/www.gannett-cdn.com/-mm-/194189d41a484925a6ce532d59321688c87ad0e0/c=797-0-4253-3456/local/-/media/2015/09/04/Phoenix/Phoenix/635770036966837410-HOW4199.jpg
(http://www.azcentral.com/story/money/business/consumers/2015/09/06/controversial-energy-drink-maker-shut-down-feds/71669828/)




Johnson said he did not believe he could "lawfully and profitably" allow sales to continue because of the ratio of affiliates to consumers. He said selling products to affiliates likely would further the pyramid scheme and there weren't enough non-affiliated consumers to make a profitable dent in the inventory.

Testimony on Tuesday revealed Vemma has about 100 employees and up to 400,000 active affiliates worldwide....

Despite Vemma's line of nutrition drinks, the FTC alleges the company's primary source of revenue comes from the buy-in of new affiliates.

http://www.gannett-cdn.com/-mm-/9065941e142eb769bb76794c742e08d1e14ee558/r=300/http/www.gannett-cdn.com/-mm-/16381bd5bfbf98abd5fc7af1f2e60ceac9748868/c=0-347-4654-2976&r=x1683&c=3200x1680/local/-/media/2015/08/26/Phoenix/Phoenix/635761995561347854-HOW4171.jpg
(http://www.azcentral.com/story/money/business/2015/08/26/vemma-nutrition-temporarily-shut-down-pyramid-scheme/32419123/?from=global&sessionKey=&autologin=)




The FTC accused Vemma of targeting students to serve as affiliates with marketing materials showing "prosperous young people with luxury cars, jets, and yachts" and false claims that they could earn as much as $50,000 per week. The FTC said company officials suggested students could earn enough to bypass college by joining the company.....


The Italian government declared Vemma a pyramid scheme in April 2014. Switzerland’s State Secretariat for Economic Affairs said prosecutors are investigating the company. Consumer protection agencies in Germany and Austria also have issued warnings about the company and advised young adults to steer clear.....

(Boreyko)He criticized the FTC investigation, saying an undercover agent used selective information to build his case. In one point he said the agent highlighted sound bites from Vemma representatives to make the company look bad.

Those poor schleps need to throw in the towel. No MLM has any significant number of customers and they never will!

[GlimDropper]

Today's ruling [Link thanks to Don Ryan] (https://docs.google.com/viewer?a=v&pid=sites&srcid=YXNkdXBkYXRlcy5jb218ZmlsZXMtd2Vic2l0ZXxneDo0 MTkyNDhhMWMwN2U3Nzhh)

I'm seeing a lot of chatter on the MLM side that this is a "victory" for Vemma and I suppose technically it is in so far as the court did not grant all of the FTC's requested injuntive relief, but the way that Vemma is still allowed to operate might be worse than closed. Just to clear a few things up that I've seen posted elswhere:

Vemma has in no way been "cleared" of being a pyramid scheme. The court found that there are perhaps non pyramid aspects with "some significant amount of Defendants" product is sold to persons not pursuing the business opportunity." But to be clear, from page 6:

http://i.imgur.com/2h2KvEA.png

Vemma was also hit hard on false and misleading claims. There's a very interesting line of reasoning running through this decision, it strikes me almost like common sense. (My interpretations) Vemma, while having some level of product value is functioning as a pyramid scheme because the marketing encourages people to purchase an affiliate pack, go on autoship and then recruit more people to do the same. Because Vemma is functioning as a pyramid scheme the overwhelming majority of participants will lose money. Because the disclaimers on the marketing material fail to disclose that almost everyone loses money they are in fact deceptive. Yet Vemma still has ~some~ real customers.

So, what happens from here? Well everything that has happened in court has been a preliminary, pre trial action, there's a whole court case yet to be tried. And Vemma will reopen for business with a target drawn squarely on their heads under the constant supervision of a court appointed monitor under a set of conditions I don't think they can live with. One example, Vemma is restrained and enjoined from:


4. Pays any compensation related to the purchase or sale of goods or
services unless the majority of such compensation is derived from sales to or
purchases by persons who are not members of the Marketing Program;

How the hell can Vemma survive only paying commissions when most of the money is coming from (gasp) ACTUAL CUSTOMERS !!! I think this provision gets the whole ruling appealed. There is no way anyone who can swing a downline will stay with Vemma trying to sell energy drink when they can jump to any other the other MLMs out there who can pay far more handsomely with affiliate money. At least for the time being. Vemma's marketing material will need to be screened by the FTC as well. Good Bye tiny little disclaimers and Hello WARNING: ALMOST NO ONE MAKES MONEY IN THIS COMPANY !!!

This story isn't anywhere near over yet, but it is turning into an interesting read.


Edit to add, a link (https://www.youtube.com/watch?v=6VNX-9vpSQA) to Kevin Thompson and Kevin Grimes offering they're opinions.

[Soapboxmom]

Vemma prohibited from resuming normal operations (http://www.azcentral.com/story/money/business/consumers/2015/09/18/vemma-pyramid-scheme-case-federal-judge-ruling/32571325/)


A federal judge barred Vemma Nutrition Company from resuming normal operations Friday and appointed a monitor to oversee its business practices, saying there was little doubt it is operating a pyramid scheme.

U.S. District Court Judge John Tuchi prohibited the Tempe-based energy drink maker from paying commissions, recruiting new members, offering rewards for purchases and tying sales to multi-level marketing.

The ruling guts the core of Vemma's multilevel marketing operation (http://www.scribd.com/doc/281860820/PI-Order-Vemma) and supports a Federal Trade Commission lawsuit filed last month seeking to shut down the company for operating an illegal pyramid scheme.

"The evidence before the Court leaves little doubt that the FTC will ultimately succeed on the merits in demonstrating that Vemma is operating a pyramid scheme," Tuchi wrote in his 27-page ruling filed just after 1 p.m., which characterized Veema's marketing material as deceptive and misleading. "Some Vemma material also contains representations the Court would characterize as ridiculous—bordering on absurd—such that a listener could not reasonably be expected to believe them."
Tuchi's order allows the company to continue selling products directly to consumers, so long as the sales are for personal use and the majority of purchases are not made by members of the company's marketing program, so-called affiliates.

Depending on whom one chooses to believe 70-78% of the sales are inside the pyramid pay plan as of today, so Vemma is screwed. The ruling is pure comedic gold.

[littleroundman]

Some highlights from Judge Tuchis' order (http://asdupdates.com/wordpress/archives/6636) in the matter of the Vemma preliminary injunction

http://imageshack.com/a/img540/3887/gh3uwu.jpg
http://imageshack.com/a/img538/4834/Ba8wOx.jpg
http://imageshack.com/a/img661/9900/2unlwT.jpg

http://imageshack.com/a/img540/5522/AQ3LGy.jpg

http://imageshack.com/a/img661/1465/UqWVys.jpg
http://imageshack.com/a/img661/2642/Fuf7FG.jpg

http://imageshack.com/a/img540/7431/keM17A.jpg

http://imageshack.com/a/img661/617/aLIxaa.jpg

http://imageshack.com/a/img540/2668/m4b3fg.jpg

http://imageshack.com/a/img661/5771/sG3T5g.jpg

http://imageshack.com/a/img537/776/4aG4qk.jpg
http://imageshack.com/a/img538/4026/tnHvFC.jpg

http://imageshack.com/a/img540/1607/QWz8Ft.jpg
http://imageshack.com/a/img540/6548/B4tSFG.jpg

http://imageshack.com/a/img673/1626/1D40Tz.jpg
http://imageshack.com/a/img913/2876/MiXuan.jpg

http://imageshack.com/a/img905/8255/6vsDYv.jpg
http://imageshack.com/a/img673/6063/DVB8Li.jpg
http://imageshack.com/a/img540/7646/EFv10P.jpg
http://imageshack.com/a/img538/3503/4o7EYq.jpg

http://imageshack.com/a/img661/617/aLIxaa.jpg

[Luzer]

Vemma is dead. The Vemma distributors were just self consuming product making it basically a pay to play scam.

Hopefully Herbalife goes down next.

[Soapboxmom]

Clem Lemons genius I.Q. at work again!


Shame on AZCentral, and you, Mr. Anglen, for your egregiously inaccurate portrayal of events related to this case.

First, the video accompanying this article is obviously outdated, and refers to events previous to the Sept. 18th hearing, several of which are no longer applicable.

Furthermore, the Judge's Sept. 18th ruling absolutely, in now way, "prohibited the Tempe-based company from paying commissions, recruiting new members, offering rewards for purchases and tying sales to multi-level marketing." This is utterly and demonstrably wrong. Not only is Vemma still allowed to do all of the above, it is still allowed to pay up to 50% of commissions on the products *personally purchased* by downline Affiliates.

In addition, you claim the judge's order, "allows the company to continue selling products directly to consumers, so long as the sales are for personal use and the majority of purchases are not made by members of the company's marketing program, so-called affiliates." Again, this is completely inaccurate. The order also allows for sales to Affiliates, which can be for sampling or resale, and it clearly defined that the majority of "commissions", not purchases, must not come from Affiliate purchases.


Where do I start? If the majority of commissions must come from retail sales to real consumers outside of the pyramid pay plan, then logic dictates that the majority of the sales must also come from retail customers / consumers that are outside of the pyramid pay plan.....

:duh:

[Whip]

he soooooooo wants thompson to spoon him.

[Soapboxmom]

Another incredible read on Seeking Alpha:

With FTC Pulling Out Of A Skid In The Vemma Case, MLM Industry Put On Notice - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha


(http://seekingalpha.com/article/3523566-with-ftc-pulling-out-of-a-skid-in-the-vemma-case-mlm-industry-put-on-notice?auth_param=184eqq:1b02kp9:571d2276eeadac383 fb35e028407f94e&uprof=45&dr=1)ConclusionThis is the time for investors everywhere to come to grips with the fact that MLM is not a business with regulatory exposure, but a criminal fraud masquerading as a (direct sales) business.....
(http://seekingalpha.com/article/3523566-with-ftc-pulling-out-of-a-skid-in-the-vemma-case-mlm-industry-put-on-notice?auth_param=184eqq:1b02kp9:571d2276eeadac383 fb35e028407f94e&uprof=45&dr=1)
DOJ action and a possible RICO case may be nextThe rapidity of the defections in Vemma, makes it clear once again that MLM is not about product but about pyramids, and technically MLM is a direct sales front that is designed to cover up a covert illegal pyramid that is present by implication in the terms of he compensation plan.....

It's all about economics, stupidAt its core, MLM-onomics is about substituting the recruitment of sellers for sales.....

In short the synthetic demand for MLM product is created by the lure of the business opportunity, and in turn the business opportunity is viable only base on the fraudulent misrepresentation that everyone has the same opportunity, but it is invariably only a very small band of top leaders who reap the rewards, for the systems is designed to not pay most people for what they do, and yet have them assume all the expenses, based entirely on a fraudulent misrepresentation of their prospects......

The reality is that in MLM the product is nearly never offered without the business opportunity, which allegedly even Herbalife CEO Michael O. Johnson likened to a lottery ticket, as reported in the New York Post recently, here (http://nypost.com/2015/06/25/video-reveals-herbalife-boss-saw-pyramiding-signs-early-on/)....

Judge John J. Tuchi was not bamboozled by defense reality-twisting.


Vemma can sell product, but not with a lottery ticket attached.


Herbalife has undertaken a euphemistic relabeling of failed distributors to customers similar to Vemma.


The days of confounding law enforcement with cosmetic changes may be over.


MLM is really getting the attention it deserves!

[littleroundman]

If you look past all the spin doctoring and MLM / DSA rhetoric, Judge Tuchi has placed Vemma in a perfect position to prove both he, the FTC and the former receiver wrong.

With all the suspicious segments of the Vemma business now exposed and removed "all" Vemma has to do is concentrate on the retail aspect of its' business and let the results speak for themselves.

[Whip]

If you look past all the spin doctoring and MLM / DSA rhetoric, Judge Tuchi has placed Vemma in a perfect position to prove both he, the FTC and the former receiver wrong.

With all the suspicious segments of the Vemma business now exposed and removed "all" Vemma has to do is concentrate on the retail aspect of its' business and let the results speak for themselves.

I know. One would think that shouldn't be too hard right? lol

[littleroundman]

And you guys thought you had it all figured out, didn't you ???

Well you didn't.

Not according to Vemma Ambassador, Lanny Morton @lannymorton (https://twitter.com/lannymorton) on Twitter, anyway.

Here's Lanny Morton with his insights into what occurred:


https://www.youtube.com/watch?v=I_-z2qk3Lko

[Soapboxmom]

Len Clements:
<snip Gone with The Wind length ridiculous diatribe>............

Having said that, it’s glaringly self-evident that the removal of the receiver in lieu of a “monitor” and unfreezing of all assets, which essentially took Vemma from death row to probation, is a major “victory”.
Clem has a very curious definition of victory!

[Whip]

Len Clements:
Clem has a very curious definition of victory!

c'mon.......he waved his amega wand and the judge cowered!

[littleroundman]

c'mon.......he waved his amega wand and the judge cowered!

Oh, you said AMEGA wand.

Phew,

for a moment there I thought he'd waved.......................nevermind

[littleroundman]

http://imageshack.com/a/img673/8929/kMnh1p.jpg

It's notable the Vemma website is now showing only the IP number in the address bar,

http://imageshack.com/a/img538/3189/dBzllB.jpg

[Whip]

http://imageshack.com/a/img673/8929/kMnh1p.jpg

It's notable the Vemma website is now showing only the IP number in the address bar,

http://imageshack.com/a/img538/3189/dBzllB.jpg

and 'victory' it is. lol

[littleroundman]

The New York Post (http://nypost.com/2015/09/10/former-top-vemma-distributor-facing-threat-of-clawbacks/) is reporting further possible fallout from the FTCs' action against Vemma:

http://imageshack.com/a/img633/9594/EHWhEK.jpg

You can find the original story here on nypost.com (http://nypost.com/2015/09/10/former-top-vemma-distributor-facing-threat-of-clawbacks/)

[Luzer]

From the "other site". Chris Doyle shows what a POS he is. His quote is below:


"""There's a great point in this article and it shows you couple of ''scambusters'' up for what you really are. The FTC went in mob handed and sacked 100 employees of Vemma....notice I said ''employees'', not MLM'rs....people who were earning wages their families obviously relied on. How much have we heard from you two about these unfortunate people? Nothing. Zilch. Nada."""

[Soapboxmom]

REPORT: Vemma Europe Ltd. In 'Provisional Liquidation' - PatrickPretty.com (http://patrickpretty.com/2015/10/07/report-vemma-europe-ltd-in-provisional-liquidation/)

Vemma is imploding worldwide!

[littleroundman]

REPORT: Vemma Europe Ltd. In 'Provisional Liquidation' - PatrickPretty.com (http://patrickpretty.com/2015/10/07/report-vemma-europe-ltd-in-provisional-liquidation/)

Vemma is imploding worldwide!

You ain't just whistlin' Dixie, SBM

http://imageshack.com/a/img908/5862/6MhiRO.png

[Luzer]

You ain't just whistlin' Dixie, SBM

http://imageshack.com/a/img908/5862/6MhiRO.png

What's happening with Vemma? I heard they were re-opened but sales were non existent. So much for the false claim that their distributors were mostly discount customers.

[littleroundman]

I guess the question of whether or not Vemma was going to be able to continue to operate after the court imposed sanctions were imposed is being answered:

http://imageshack.com/a/img922/7026/JtTpY4.png

[Soapboxmom]

Compete.com says:



Unique Visitors



https://app.compete.com/home/favicon/vemma.com/
vemma.com (https://app.compete.com/website/vemma.com)
13,607




Ouch!!

[littleroundman]

From the Federal Trade Commission (https://www.ftc.gov/news-events/press-releases/2016/12/vemma-agrees-ban-pyramid-scheme-practices-settle-ftc-charges) website

http://imageshack.com/a/img921/7923/Jf5HqQ.png

You can read the original FTC press release here at: FTC.gov (https://www.ftc.gov/news-events/press-releases/2016/12/vemma-agrees-ban-pyramid-scheme-practices-settle-ftc-charges)

[littleroundman]

It seems Vemma members and consumers weren't at all surprised at the outcome of the FTC case:

http://imageshack.com/a/img924/3945/PKJqgQ.png

It's hard to see BK Boreyko arresting the slide anytime soon.

[Whip]

It seems Vemma members and consumers weren't at all surprised at the outcome of the FTC case:

http://imageshack.com/a/img924/3945/PKJqgQ.png

It's hard to see BK Boreyko arresting the slide anytime soon.

he doesn't need to. he got to keep his money with that ridiculous settlement.