So where did Darnell get his training? Why should you feel comfortable giving him your $10,000? Let's take a look.
After graduating Texas Tech, Darnell toured with his gospel group, Dreamer. He was drawn into the business world of multilevel marketing. He cut his teeth at companies like Amway, and, he says,
"I became fairly adept at compensation plans and actually wrote the compensation plan for a company called United Sciences of America in 1986. And that was a big program here in the Dallas area."
Carrollton-based United Sciences sold a nutritional plan that included something called the Fiber Energy Bar. By eating said bar and others in the United Sciences family, the company claimed, one could protect oneself against AIDS, cancer, heart disease, diabetes, arthritis, PMS, acne and dandruff. This was one motherf*cking candy bar.
The company relied on reps to sell the product, promising big rewards if they signed on with the United Sciences team. It hired William Shatner to narrate a promotional video. It paid New York Mets pitcher Gary Carter $50,000 to say in the tape, "Join me and hit a financial grand slam."
In January 1987 the Texas Attorney General's office sued United Sciences for allegedly running an illegal pyramid scheme. Attorneys general in New York and California filed similar suits. At the time United Sciences filed for bankruptcy, it claimed to have 140,000 reps. (In October 1987 a permanent injunction against United was issued in a Dallas district court. Under the terms of the agreed settlement, United did not admit any wrongdoing or liability.)
In his deposition for the Dallas BBB suit, Darnell said he also worked for Global Prosperity Group and NuSkin Enterprises.
Global Prosperity reps pitched $1,200 worth of tapes and a $6,200 conference (in "tropical locations") designed to teach recruits how to get rich via tax loopholes. By 1999, authorities in six states filed cease-and-desist orders against Global.
Quatloos.com, a fraud watchdog web site run by California attorney Jay Adkisson, states: "
The slimy-est of the slimy, Global Prosperity marks the absolute rock-bottom low of the MLM [multi-level-marketing] programs. There simply is no MLM program which is more of a scam, or has such a disreputable background, as Global Prosperity and its many equally-sordid spin-offs ... Global Prosperity's reputation is
so bad that other network marketers will often add a disclaimer to the bottom of their own spams and advertisements which says 'Not Global Prosperity.'" (Adkisson is an asset protection attorney who has testified as an expert witness before the U.S. Senate Finance Committee on matters of charity oversight and financial fraud.)
Global later operated under different names, including the Institute of Global Prosperity, whose offices were raided by the IRS in 2001. In 2003, two former Institute administrators pled guilty in federal court for tax evasion. (Darnell was only a representative with these companies and was not part of any legal actions.)
As for NuSkin, the U.S. Federal Trade Commission fined the nutritional supplements company $1.5 million in 1997 for violating an earlier order requiring the company to have "competent and reliable scientific evidence to support benefits claims for any product they sell." Under the terms of the payment, NuSkin did not admit any wrongdoing. Today, NuSkin is a thriving company, claiming 820,000 representatives. It also runs two charities which provide food and education for needy children worldwide.
Created by Mormons, NuSkin is based in Utah, which is ground zero for multilevel-marketing companies. Jeffrey Ressner examined Mormons' ties to nutritional supplement multilevel marketing for
Time in October. "More than 100 supplement companies dot the terrain alongside I-15 snaking through Salt Lake City, Utah, generating $4 billion in annual sales — four times the revenue of the state's more famous ski trade," he wrote. Such companies are popular not only among mainstream Mormons, but among their polygamous fundamentalist offshoots just across the border in Arizona as well. Enter Darnell's next business partners.
Darnell met his polygamous buds in 2000, when
he was with an Arizona-based multilevel-marketing company called Tru Dynamics, which sold an "Executive Conference Experience." By 2001, Darnell and a handful of coworkers left Tru Dynamics and formed a company called Liberty League International, which sold its own conference. The head of Tru Dynamics sued the defectors in an Arizona court for conspiring to hijack Tru Dynamics' customers. The Liberty Leaguers filed a counterclaim accusing Tru Dynamics of breach of contract.
The suit was eventually dismissed and Liberty League went on to do huge sales.
In May, the company paid $115,000 in a settlement with the Arizona Attorney General's office, amid customer complaints. A statement issued by the AG's office indicated that "the majority of participants did not earn enough to cover the amount they paid to buy the products sold to them."
The money, according to the statement, would be used to pay for "consumer education, attorneys' fees and investigation costs, and victim restitution to be determined at a later date."
While Liberty League promised not to make "unsubstantiated income claims" and to "refrain from making any false or deceptive statements in their marketing materials," the company did not admit any wrongdoing.
