Anyone who has studied Multi-level marketing and pyramid schemes extensively knows that this statement from USANA Health Sciences (NASDAQ: USNA) spokesman Joseph Poulos (AKA Salt Lake Sam) is false and misleading:
"This company sells vitamins. In a pyramid scheme there's no product."
Just for fun, I asked Jon Taylor of the Consumer Awareness Institute if he could think of any companies selling products that had been shut down by the FTC or other government agencies for operating pyramid schemes. He emailed back with this, which he called a "partial list":
2Extreme Performance
Bestline
Boston Finney
Club Atlanta Travel
Culture Farms
Destiny Telecom
Equinox
Five Star Auto Club
Fortuna Alliance
Fortune in Motion
Global Prosperity Group
Globion, Inc.
Holiday Magic
Infinity2
International Heritage
Jewelway
Koscot Interplanetary
National Safety Associates
NexGen3000
Omnitrition
Rennaissance – the Tax People (RTTP)
Skybiz
Tele-Card International
Trek Alliance
Unimax
Does Mr. Poulos just not understand what a pyramid scheme is? If he doesn't, then is really in a position to be defending allegations that his employer is one?
More USANA Health and Sciences news
Kevin Kelly: "Heard on the Street" knocks USANA
Zac Bissonnette: Oh snap! Barry Minkow fires back at Usana Health Sciences
Zac Bissonnette: Forbes slams Usana Health Sciences (USNA)
Zac Bissonnette: NZ National Business Review slams USANA Health Sciences (USNA)
Zac Bissonnette: USANA has a product, so it's not a pyramid scheme?
Zac Bissonnette: Is Baghdad Bob working for USANA Health Sciences?











Reader Comments (Page 1 of 1)
7-18-2007 @ 6:55PM
Lisa said...
USANA is probably operating off the idea that if Amway and Herbalife are "legitimate multilevel marketing companies", then USANA is, too. I think that USANA IS a pyramid scheme, but I think that Amway and Herbalife are pyramid schemes, as well.
7-19-2007 @ 10:53AM
silvermane32 said...
Isn't it possible for a company to be pyramid shaped, but not be a scheme? Why do the two always *have* to be linked together?
7-19-2007 @ 11:22AM
Bruno said...
In fact EVERY companie IS pyramid shaped... so as the government etc. Look at the CEO... then under him, President, then Executive President, Vice President, Manager, Employee. If we could picture it, it would look like a pyramid. Is it illegal then, of course not but there's a link in people's head that puts pyramids scheme with MLM because, I think, of the way these companie show their compensation plan wich is shaped like a pyramid. Just my thought on the subjet.
7-19-2007 @ 3:02PM
MLM Blog said...
So you asked a HACK who can't even stand behind his own "5 red flags" research what he thinks about USANA. Nice work. Notice how he didn't mention the actual FTC definition of an illegal pyramid.
7-19-2007 @ 3:03PM
MLM Blog said...
Just for fun you asked a hack who can't stand behind his own "5 Red Flags" research. Nice work.
7-23-2007 @ 1:56PM
Chris said...
Pyramid?
Before you can begin to talk about a pyramid, someone will have to define what a pyramid is in the context we're talking on this site.
Traditionally, this word as it is used from a derogatory standpoint derived from what is known as a "Ponzi Scheme".
This is where you take someone's money, with the promise of a return and you're able to promise the return based on getting someone else involved and using their money to pay the first person. Whereas, the last person to get in, will not be paid because there will no longer be resources to pay.
9-27-2007 @ 8:40AM
Klaus said...
Very one-sided report! I can see that Barry has you hypnotized as well. Just like he did with the press when he was a crook (see LA Times Archives on Barry Minkow ZZZZBest). He fooled the press many times & will manipulate again, to suit his ego and greed.
USANA is not perfect, but what company is? Overall I would have to say it’s a good company. They have a 250,000 square foot manufacturing facility that voluntarily manufactures its products to pharmaceutical standards. They do use a legitimate network marketing (NWM) go to market strategy of direct sales. NWM is an accepted trade practice in the US and 60 other countries around the world
If USANA Health Sciences just wanted to build a fake/farce product pyramid scheme, why spend so many resources on land, manufacturing equipment, labs, warehousing, IT systems, employees (1000 people work for USANA) and the list goes on.
If you look at past companies brought down that “posed as legitimate NWM businesses”, you’ll see that most of their so-called products were manufactured by a third party, services were contracted out and the product was inferior. No high-end third party endorsement would be there even if you paid them.
I see external stock manipulation here. Barry and his “unknown” paying client knew that USANA was a strong company with a 15-year track record. Give the press the perception of fraud and rake in the windfall! Lets get real here! It is flagrant external stock manipulation. Mr. Minkow twists the truth about the company and people of USANA, scares the investors and stakeholders and voila! The big stock tumble! Make money on put options and the big stock rebound. USNA was at a low of $28 not too long ago, and its now around $43.
Dennis Waitley is a best selling author, mentor and trainer for Olympic athletes, astronauts fortune 500 companies. His work and record speaks for itself. Regardless of weather he has a nice piece of paper with a frame. Minkow prefers to look at the credentials not the performance of Waitley. You see it’s the perception thing.
Dr. Ladd MacNamara did receive his medical degree and was a practicing doctor. He gave up his license to pursue other ways of improving both his own and others lives through USANA. If he wanted to, He could get his license to practice medicine again in Georgia, if he re-applied (see his blog). Bottom line is MacNamara has vast knowledge about healthcare and you can’t erase that from his brain. Just to make Minkow happy and other authorities, he has removed MD from his name. But he still has his nice paper and frame from his University!
Dr. Tim Wood has done a great job of running the R&D and product development for USANA. He is a PhD and his team of scientists respects him. Respect and honor is earned by hard work, not by a piece of paper and a frame. He has focused on biology and earned his distinction from his work and management skills.
How about Mr. Gill Fuller. So what! He hasn’t paid his dues to his association so he can put CPA after his name. He probably knows more, due to his experience, compared to the home based CPA that does your taxes. He’s a CFO for a company that will have almost a half billion dollars in sales. He’s worked for other large companies as well. It’s Minkow’s twisted truths that scare the novice investors away.
I’m a chef; I can put CCC (Certified Chef de Cuisine) after my name. Did you know there are many great chefs that did not attend a day of formal training in culinary arts at an educational institution? Chefs are judged by the last meal we created, not by our pretty little papers and frames on the wall. As Trump would say “What have you done for me lately?” or “Your Fired!”
You see, USANA does have real products that are best in class. They manufacture and distribute from their 250K sq. ft. facility in Salt Lake City. They have a loyal consumer base of 80 thousand preferred customers, 160 thousand associates and it’s growing! They have endorsements from Dr. Christine Northrup MD, US and CDN Olympic Speedskating Teams, Women’s Professional Tennis Circuit and the list goes on and on. It’s a real company with real products and real consumers.
Thanks for the dialogue and debate.
Klaus