Salty Droid (With Pants): off to a great start by suing Herbalife

I have bad news and good news.

The bad news, and it's pretty bad, is that (1) Leonard Cohen, who would have been celebrating his 83rd birthday today, is still dead; and (2) Herr Twitler is still the #NotMyPresident.

The good news, and it is very, very good, is that my favorite scambusting blogger, Salty Droid, aka Jason Michael Jones -- who was admitted to the Ohio bar last year and has begun practicing law again -- has, in partnership with Miami litigation firm Mark Migdal & Hayden, filed a class-action lawsuit against multi-level marketing (MLM) scam giant Herbalife, alleging civil racketeering (RICO) violations.

Here is a direct link to the 83-page complaint (1:17-cv-23429), which was filed in the United States District Court, Southern District of Florida, on September 18, 2017.

Salty/Jason first announced the lawsuit against Herbalife on his blog the day the complaint was filed, and he posted a followup yesterday.

As for the rest of the media, which jumped on coverage of past legal actions against Herbalife, they seem to be a little behind the curve on this one. The Truth in Advertising site reported the lawsuit yesterday, however, and did a good job of summarizing the case and the issues.

And the Valuewalk investment blog mentioned the lawsuit on September 19. The writer noted that Herbalife stock was "about flat today," indicating that investors weren't too worried. He added:

Herbalife will either distance itself from those distributors or take over their defense. So they’ll either be condemning their conduct or endorsing it. Other high level distributors will have to worry about whether they will be added to the lawsuit.

The other big difference between this and Bostick [a previous class action against Herbalife] is the new complaint alleges a RICO conspiracy – a corrupt enterprise consisting of the company and many top distributors – and it alleges that their sales-event methods violate the FTC order as well as other fraud statutes.

But the mainstream business and financial press don't seem to have paid it much heed as of now, at least if the Google search results as of today (September 21, 2017) are any indication. Oh, well, give 'em time.

The September 18 complaint focuses on Herbalife's live events, specifically, their Circle of Success gatherings across the country. While many might think that live events are rapidly becoming obsolete -- what with Skype and other technologies that are considerably cheaper and much less of a hassle -- live gatherings are still very much a part of Scamworld. Wrote Salty in his September 18 post:

These events are dangerous :: weaponized fraud … and they permeate the scam industry. Every wretched festering scamhole I’ve climbed down has contained one of these escalating event sequences at the heart of the harm … anchoring victims to the bottom of Lake Misery.

He pointed out that the fatal faux-sweat lodge that killed three of James Arthur Ray's followers was the culmination of a "deeply manipulative $10,000 event..." Moreover...

Many scams :: like the one I raged about here in 2013 {owned and operated by the now President of the United States of America} … are nothing but events.

And I can add, based upon my conversations with many ex-members, that events were what kept so many faithful followers of currently-imprisoned serial scammer Kevin Trudeau drinking the GIN (Global Information Network) Kool-Aid for so long. (Not that Trudeau is actually serving his sentence for the huge GIN fraud -- he's locked up for criminal contempt related to infomercials for his diet book -- but my point is still valid.) The live GIN events -- which included lavish cruises, weekend gatherings at fine hotels, and countless regional events that focused on aggressively manipulating attendees to upgrade to higher membership levels and teaching them to become more aggressively manipulative recruiters themselves -- were carefully and expertly crafted to foster the delusion that GIN members were part of an exclusive, elite group... but that they could only achieve true success and happiness and fulfillment by continually pouring money they didn't have into GIN's coffers, which turned out to be nothing more than a personal piggy bank for Trudeau.

Live events were also how Trudeau's former b.f.f., fake doctor/cancer quack/semi-literate conspiracy peddler Leonard Coldwell, tried to recreate GIN (after being fired by Kevin) through his IBMS Masters Society, but Lenny and his former partner and bro-in-harms Peter Wink (another former Trudeau employee) never had the drawing power that Kevin Trudeau enjoyed. The IBMS events were pretty much a flop, with ever-dwindling attendance, and the "club" ultimately failed in the United States. (Lenny is apparently trying to recreate the magic in Germany now, but I predict it won't last, and can say with near-certainty that even now, it isn't nearly as successful as his Facebook boasts would indicate.)

And, of course, live events have been a very big part of the Herbalife fraud. A little over a year ago Herbalife agreed to a $200 million settlement with the U.S. Federal Trade Commission (FTC) that required it to change its compensation system from being based on recruitment to being based on actual product sales to real customers. But, as the current RICO complaint notes, the FTC didn't address the Circle of Success events, which are described in the complaint as "the single most effective fraud in the arsenal of Herbalife and its top distributors."

The event system lures and ensnares people such as Plaintiffs with the guarantee of significant income, a better lifestyle, and even happiness – all to be easily attained through event attendance.

Yup... just like in GIN.

Meanwhile, in related Scamworld news, the family of Herr Twitler's Education Secretary, Betsy DeVos, is reportedly pushing Congress to pass a rider that would limit regulatory oversight of MLMs, presumably to make life easier for her family's company, Scamway, and help them avoid some of the troubles suffered by Herbalife. The rider would curb the ability of the FTC to investigate whether MLMs like Amway are pyramid schemes.

Jason et al., y'all have your work cut out for you. But your class action against Herbalife is a great start. Keep it up.

And by the way, here again is a link to Jason's Salty-Droid-With-Pants web site, JonesAtLaw.com. Eat your hearts out, Culbertson&Ass.

PS added 23 September, 2015: Here is a link to the extended version of the complaint against Herbalife, with all exhibits attached.

Related on this blog:
Tin Promises: How MLMs Can Tear Lives Apart
Part 1 and Part 2