phillips, hunt, walker & hanna Vasayo: MLM or Pyramid Scheme
You may have heard about “Vasayo” the latest in a series of pyramid shaped, get rich selling things from your own home, multi-level marketing trends. It is the rage of social media right now.
What we can learn from Monavie?
MLM, or Multi-level marketing is a controversial pyramid shaped marketing strategy where profit is derived not just from product sales, but recruitment of people under you. Why “pyramid” shaped? Because like an upside down triangle, the higher up you are and the more people under you, the more money you can make (said in annoying TV pitchman voice)!
Dallin Larsen and his wife Karree Larsen are the “power couple” credited with founding Monavie back in 2005. They still brag about this enterprise even though MonaVie is bankrupt, even though they personally paid out millions to settle fraud accusations. Certainly, MonaVie grew to $854 million in revenue in 2008 and had recruited 1 million distributors. Certainly, people made money. But families also lost houses, got divorced, lost jobs and fell on hard times, too.
In 2008, Newsweek wrote an article entitled: “MonaVie Acai Juice: Cure-All or Marketing Scam?” MonaVie’s pitch was two-fold: better health from drinking its juice (which sold for a whopping $40 a bottle), and income from income from being a distributor. Newsweek found that “fewer than 1 percent (of sellers) qualified for commissions and of those, only 10 percent made more than $100 a week.” This was a far cry from the miracle which founders claimed. Newsweek went on, “And the dropout rate, while not disclosed by MonaVie, is around 70 percent, according to a top recruiter.” Bad reviews and unhappy customers and re-sellers started piling up.
By the middle of 2014, founders Dallin Larsen, Randy Larsen and Henry Marsh abandoned ship, leaving Mauricio Bellora remaining in charge as CEO. They claim they didn’t like the direction the company was headed in. Others claim they got out just before the inflated value of the company crashed and after a loan strapped the company in debt. Lawsuits reveal they were complicit.
One such lawsuit which was filed against Mona Vie Inc. and Mona Vie LLC, stated in part:
“The Mona Vie juice scam is the newest creation of noted multi-level marketing scheme architect, and prior ‘super juice’ creator, Dallin Larsen, after his last venture was halted by the Food and Drug Administration because of false and misleading advertising,”
“Mona Vie’s story is almost identical to that of Royal Tongan Limu – another ‘super juice’ product with too-good-to-be-true alleged health benefits,”
Multiple suits were filed by customers and sellers, alike, resulting in class action settlements. MonaVie’s direct employees also sued, claiming they were saddled with massive debt after the company defaulted on a $186 million loan to its own employee stock ownership plan. The three principal shareholders, Dallin Larsen, Henry Marsh and Randy Larsen, were the only remaining defendants at a point in one lawsuit. The Defendants agreed to pay $19.8 million to settle the employee stock program suit. The proposed settlement also allegedly included a payment of $3.8 million from the three founders.
Even their insurance company, Torus National Insurance, sought to deny coverage. Simply put, they pyramid collapsed. And yet they build another one.
Some of the MonaVie Lawsuits:
KELLY JESSOP, an individual, on behalf of himself and all others similarly situated, Plaintiff, v. DALLIN LARSEN, an individual, HENRY MARSH, an individual, RANDY LARSEN, an individual, MACHIEL KENNEDY, an individual, RALPH CARSON, an individual, AMY COWLEY, an individual, MARK RAWLINS, an individual, PORTER HALL, an individual, STEPHEN J. HALL, an individual, DOES 1-10, and BANKERS TRUST COMPANY, a Delaware corporation, Defendants.
DIANE BUHLER and ERIC LIEBERMAN, individually and on behalf of all others similarly situated, Plaintiffs, v. MONA VIE, INC., a Utah corporation, and MONAVIE, LLC, a Delaware limited liability company, Defendants.
And now this… Vasayo!
The third time is the charm, they claim. Is it? For who? Those who buy in? Those who take yet another product which has escaped FDA approval? Or those at the very top of the pyramid? Time will tell. But history will likely repeat itself.
Vasayo purportedly stands for, “Vision Action Steadiness Assures Your Outcome.” Think the Shark Tank guys and girls would buy in? Nope. Even the pitch is about the scheme, not the product.
There are allegedly five main products offered in the Vasayo product line: (1) Vasayo MicroLife Nutritionals Essentials; (2) Vasayo MicroLife Nutritionals Neuro; (3) Vasayo MicroLife Nutritionals Energy; (4) Vasayo MicroLife Nutritionals Renew; and (5) Vasayo MicroLife Nutritionals Sleep.
Much like with Monavie, they are making claims that there is some new science or revolutionary formula involved. But so far, the only marketing is of those who want to get in “at the ground level” as a “founder.” Nothing is being marketed about the actual product they will sell. No one cares about the product; they care about jumping the wave of another possible get rich quick surge.
John Oliver on MLM
John Oliver covered the MLM marketing on his HBO show- a must watch.