The Herbalife Link To LLR
You may have heard about a little company called Herbalife once or twice. Herbalife is a multinational MLM that made its fortune marketing health supplements to the masses. In 2004, it settled a class action brought about by 8,700 former and current (at the time) independent distributors. 6 million dollars was paid in that settlement. In 2003 and 2005 two other class actions had been filed- one in West Virginia, and one in California. Without admitting wrongdoing after being accused of essentially running a pyramid scheme, Herbalife paid out another 7 million dollars. In 2011, a Belgian business court ruled that Herbalife was indeed a pyramid scheme. Herbalife appealed, and won. The ruling was overturned. December 20, 2012, another argument presented by Bill Ackman here in the US, stated that after a year long investigation he concluded that Herbalife was a "sophisticated pyramid scheme" and deduced that the majority of distributors lose money. Any chance at success in the company was approximated odds of 1/5,000. Reuters reported: "Ackman claimed that Herbalife distributors "primarily obtain their monetary benefits from recruitment rather than the sale of goods and services to consumers." His firm estimates that, since 1980, the scheme has led to more than $3.5 billion of total net losses suffered by those at the bottom of the Herbalife chain. He said on CNBC that millions of low income people around the world, hoping to become millionaires, are being duped with this scheme, and if they knew that the probability is less than 1% of making a hundred thousand dollars, what Herbalife calls the "millionaires team", no one would sign up for it." In March 2014, the FTC announced probe into Herbalife's business operations. Their report (released in February 2013) included 192 complaints against Herbalife over a 7 year period. After a grueling investigation over 18 months, Herbalife agreed to the FTC's demand for injunctive relief- to the tune of 200 million dollars. Partial refund checks were then issued to approximately 350,000 Herbalife distributors just this past January. The FTC lawsuit alleged: "...that Herbalife deceived consumers into believing they could earn substantial income from the business opportunity or big money from the retail sale of the company’s products. In addition, the complaint charged that one of the fundamental principles of Herbalife’s business model—incentivizing distributors to buy products and to recruit others to join and buy products so they could advance in the company’s marketing program, rather than in response to actual consumer demand—is an unfair practice in violation of the FTC Act." (wikipedia) Who cares? That's Herbalife, not LuLaRoe, MommyGyver! There's no relationship. Oh? In THIS REPORT released by the FTC, you will notice a familiar name right away. Terrel Transtrum, then CEO of ServiceQuest, was a part of the "Independent" committee that oversaw if Herbalife was acting in compliance with court orders. The report period is from January 2017 to March 31, 2017 Page 7 of this report gives his background-
Please note: Current activities and references, third bullet point down. Chief Advisor to LuLaRoe's own Mark Stidham. Mr. Transtrum is also author of the notorious "white papers" in regard to the sales tax and Nexus debacle we hear so much about:
More interesting still is in the following pages, specifically pages 32 and 33- conflicts of interest are expressed outlining that all members of the committee have a potential conflict of interest as direct sales have been their livelihoods for the majority of their professional careers. Further stating on page 33 that Terrel actually did work for Herbalife 15 years prior. How could he be impartial? That's a good question. With LuLaroe's antics being so closely related to the accusations in the Herbalife complaints, it's a wonder the FTC hasn't come a-knockin' yet. Then to see a familiar name and face auditing Herbalife's compliance with court orders- well that was just surprising. But scroll to the last page. Not only is Mark Stidham listed as a reference for ServiceQuest... but so is Jason Hansen- from none other than the recently LuLaLoathed company, CMS.
Direct sales is a very, very small world. Now, I'm not implying anything at all that this man is guilty of any wrongdoing. Just pointing out the parallels and how small the DS world really is. **Update** Art McCracken, LuLaRoe's COO either did, or still worked for ServiceQuest as well. His LinkedIn indicates he still does, though he's not currently listed on ServiceQuest's website. Also, JT Ekelsen, Support Specialist for ServiceQuest also worked for LuLaRoe. He was their Ethics Specialist. I find it interesting that they all kind of end up working for each other...