Herbalife and its distributors face RICO complaint

Posted 19 October 2017

Herbalife, a Los Angeles-based MLM company that sells nutrition products and weight-loss supplements, and dozens of its top-earning distributors were sued this week in a class action complaint over alleged civil racketeering (RICO) violations.

The 82-page complaint, filed in federal court in Florida, claims:

[t]he Herbalife success story is a fraud; a predatory scheme intentionally rigged against newcomers playing by the rules. The success claimed – and promised – by Defendants at Circle of Success events across the country is impossible to attain under its own terms.

A little over a year ago, Herbalife agreed to a $200 million settlement with the FTC that required it to revamp its compensation system to reward distributors for sales to customers rather than for recruitment. According to the complaint filed Monday,

But untouched by the FTC’s action . . . is the single most effective fraud in the arsenal of Herbalife and its top distributors – the Circle of Success event system. 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.

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