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Also released today was the results of a 10 year study conducted by multilevel marketing expert Robert Fitzpatrick where he analyzed 11 multi levelmarketing company's, five of which are publicly traded.
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In that study (a copy of which can be found at www.frauddiscovery.net),Mr. Fitzpatrick reveals the truth regarding the myth of the multi levelmarketing business opportunity by uncovering three undeniable truths: (1) onaverage no net income is earned by MLM distributors from door to door "retail"sales (2) the sales forces of Herbalife, Usana and the other company'sanalyzed are churned (lost money/quit/replaced) at rates between 60-90% eachyear and (3) 99% of all sales representatives each year in the sample ofcompanies analyzed earned on average less than $13 a week in commissionincome.
According to Mr. Fitzpatrick in the report prepared for Mr. Grell, "The(income) figure represents a significant financial loss for virtually all thatjoin these schemes. As extreme as the loss rate is, this figure isconservatively understated because it is calculated before all businessexpenses, inventory purchases and taxes are factored, which would increasetotal losses and the percentage of those losing."
As for the materiality of the lead tests (actual lead test results can befound at www.frauddiscovery.net), the below graph summarizes the results oftesting on a Usana Health Sciences product and has found outrageous results.
One serving of the Usana Macro-Optimizers Nutrimeal Shake contains over6.7 micrograms of lead, 1,252% more than the level allowed under California'sProposition 65. If taken twice a day as suggested on the Nutrimeal label, anindividual will consume 13.4 micrograms of lead a day, or 2,584% more thanallowed under Prop 65. Herbalife did not fair much better.Percent Max Percent Lead Serving Servings Lead Serving Lead Per Exceeds Per Per Exceeds Product MLM? Allowed* Serving Allowed Day ** Day Allowed Usana Macro- Optimizers Nutrimeal Yes 0.50 mcg 6.710 mcg 1242.00% 2.0 13.420 mcg 2584.00% Herbalife Shapeworks Protein Drink Mix Yes 0.50 mcg 3.050 mcg 510.00% 2.0 6.100 mcg 1120.00% Ensure No 0.50 mcg - mcg 0.00% 1.0 - mcg 0.00% Boost No 0.50 mcg - mcg 0.00% 1.0 - mcg 0.00% Slim-Fast No 0.50 mcg 0.910 mcg 82.00% 2.0 1.820 mcg 264.00% MLM Average Lead Per Serving 4.880 mcg 9.760 mcg Non-MLM Average Lead Per Serving 0.303 mcg 0.607 mcg * - Under California's Proposition 65 ** - Based on recommended daily consumption per product label
SOURCE Law Offices of Christopher E. Grell
