A grammar lesson for Gil Fuller and other excuses from Usana

Posted Jun 13th 2007 8:20AM by Zac Bissonnette
Filed under: Scandals, Columns

Yesterday on BloggingStocks, I wrote about the latest in a series of credentials flaps at Usana Health Sciences (NASDAQ: USNA), the multi-level marketing company that has attracted the ire of ex-con turned gumshoe Barry Minkow. It turns out that CFO Gil Fuller let his CPA license lapse in 1986, although recent SEC filings say that he has the credential. Utah state law state law doesn't allow people to call themselves CPA's unless they renew their license periodically and get continuing education units. But according to Fuller, it's really not misleading: "I say Gil Fuller is a CPA. That is in my view an accurate statement. I should have gone on to say I let my license to practice public accounting expire." (emphasis added)

But you see Gil, here's the problem: is has a different meaning than was. Consider the following examples:

Enron is one of the most respected companies in the world.

Enron was one of the most respected companies in the world before it was exposed as a fraud and numerous former officers at the company were hauled off to jail, although one died of a heart attack before he got around to serving any time.

Apparently Mr. Fuller would have you believe that both of those sentences are accurate, but I think most readers would agree with me: Having been a CPA 21 years ago is different than being a CPA now. To learn more about this and other nuances of legal disclosures and tips for deciphering financial statements, check out this great website.

Here's some more of Usana's bizarre defenses for its credentials problems. When it was discovered that Dr. Timothy Wood, Vice President of Research and Development at the company, had a degree in forestry from Yale, although his biography in SEC filings said he had a degree in biology (which is more relevant to a nutritional company), Usana responded by saying that Wood's dissertation was on a topic of biology and that he found it easier to describe his education by saying his degree was in biology.

I'll bet! As Barry Minkow said, "Dr. Wood has a degree in Forestry but by golly Usana says it's Biology, so Biology it is!" I have to admit it's pretty cool that, in addition to selling vitamins, Usana can also confer degrees from an Ivy League institution. This business could be extremely lucrative, perhaps more so than the multi-level marketing. I've always wanted a degree in divinity...

When it was uncovered that founder and Chairman Myron Wentz had renounced his U.S. citizenship to move to the tax haven of Liechtenstein, Gil Fuller told the Wall Street Journal that "Dr. Wentz is a citizen of the world."

Of course, none of this is really the point: Credentials flaps do not in and of themselves mean that Usana's management is guilty of more serious deception or wrongdoing. But it's interesting to pay attention to these scandals because they provide an idea about the character and integrity of the people running this company. We've already seen numerous cases of inflated credentials and deception. Should Usana associates be surprised if it turns out that Usana's opportunity meetings are full of exaggerated claims and manipulation? Should Usana investors be surprised if the company's business model isn't as strong as it says it is?

Tags: Usana, Usana Health Sciences, UsanaHealthSciences, USNA