A judge has ordered for Vemma Nutrition to be temporarily shut down after the Federal Trade Commission sued the company for what it deemed "pyramid scheme-like" operations.
The company promised that recruits could make money quickly, but most wound up losing money instead. The FTC says that Vemma told recruits that they could make as much as $50,000 per week selling various products, including nutritional beverage Vemma, energy drink Verge and protein shake Bod-e. Recruits would be allegedly be able to earn that income through and initial investment of $500 for a sales kit, and then paying an additional $150 per month for additional product shipments, reported the Examiner.
Vemma provided little instruction on how to sell its products, instead opting to reward recruits whenever they recruited more people. In fact, the FTC reported that 90 percent of recruits made less than $3,700 per year - far less than the coveted $50,000 per week from before.
The FTC revealed that through these dubious methods, in 2013 as well as 2014, Vemma earned $200 million in revenue. The company made more money through the money recruits used to purchase the products, than from actual sales, according to Bloomberg.
Defendants named in the case include Vemma CEO Benson Boreyko, Vemma promoter Tom Alkazin and his wife Bethany Alkazin.
Chris and Heidi Powell, two married stars from ABC's reality show "Extreme Weight Loss," appear in promotional videos and packaging of weight-loss drink Bod-e, reported CNBC. However, neither their repsn or ABC have commented on the subject.
Vemma has yet to issue a statement about the lawsuit.
