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词条 Vemma
释义

  1. History

  2. Business model

     Use of college-aged distributors 

  3. Products

  4. Government investigations

     New Vision International  Italian pyramid scheme accusations  Investigations in Austria and Switzerland   Shutdown by FTC  Penalty 

  5. References

  6. External links

{{Infobox company
| name = Vemma Nutrition Company
| logo =
| type = Private
| traded_as =
| predecessor = {{unbulleted list|New Vision International}}
| successor =
| foundation = Tempe, Arizona ({{Start date|2004}})
| founder = Benson K. Boreyko
| defunct =
| fate =
| location_city = Tempe, Arizona
| location_country = United States
| locations =
| area_served = Worldwide
| key_people = Benson K. Boreyko (CEO)
Karen Boreyko (co-founder)
Lauren Boreyko (co-founder)
Brad Wayment (COO)
Yibing Wang (Chief Scientific Officer)
Adrian Berry (Chief Medical Officer)
| industry = Dietary supplements
| products = Vemma, Verve, Bod·ē, NEXT
| production =
| revenue =
| operating_income =
| net_income =
| assets =
| equity =
| num_employees =
| homepage = {{URL|vemma.com}}
| footnotes =

}}{{coord|33.643787|-111.899148|region:US_type:landmark|display=title}}

Vemma ({{IPAc-en|ˈ|v|iː|m|ə|}}) Nutrition Company is a privately held multi-level marketing[1][2][3] company that sells dietary supplements.[3] The company was shut down in 2015 by the FTC for engaging in deceptive practices and pyramid scheming.[5]

The company, based in Tempe, Arizona, was founded in 2004 by Benson K., Lauren, and Karen Boreyko.[4][5] In 2013, the company reported US$221 million in revenue.[8] Most distributors were in their twenties. The company had frequently been accused of being a pyramid scheme by U.S. media, business analysts, and former distributors, and was fined by the Italian government.[9][10][8][12][13]}

History

Starting in the 1990s, the Boreyko family have been incorporating dozens of companies under the family's control sharing the same address. In 1994, the family founded New Vision International, a nutritional supplement company. The family also owns a limited liability corporation which has purchased commercial real estate, including property rented back to other Boreyko-controlled companies. Vemma Nutrition Company was incorporated in 2004, and by 2011, New Vision had been entirely folded into Vemma.[6]

Vemma sold its products through its website, and also through independent distributors (referred to internally as affiliates)[7] who could potentially earn a share of the revenue from their own product sales as well as those from the network of distributors they build.[8]

In 2013, Vemma started describing itself as an affiliate marketing company,[9] although Benson K. Boreyko has said that the compensation plan is the same.[18][10] Vemma is a member of the U.S. Direct Selling Association.[11]

In April 2014, the company announced that it was modifying its compensation plan by removing sign-up fees and the $150 minimum monthly product purchase to qualify for commission, among other things. Boreyko stated that the changes were intended to avoid the fallout from the Federal Trade Commission that has happened to other multi-level marketing companies, such as Herbalife.[12] An analysis by advertising watchdog group Truth in Advertising has described this as a red herring, as the company has never required sign-up fees. The group's report also says that minimum monthly purchases are still required for full eligibility, which Boreyko has said is false.[18][13]

In August 2015, the U.S. Federal Trade Commission filed a lawsuit against Vemma, accusing the company of operating an illegal pyramid scheme.[14][15] The company was placed under an injunction which restricts certain marketing activity and compensation methods, and a monitor was appointed by the court to assure compliance with these restrictions.[16][27][28] In December 2016, Vemma reached a $238 million settlement with the FTC, which also banned the company, its CEO, and top distributors from recruitment-focused business ventures, deceptive income claims, and unsubstantiated health claims.[17]

Business model

Vemma was a multi-level marketing (MLM) company.[1][2][3]

Use of college-aged distributors

Vemma heavily focused on recruiting college-aged people as distributors,[18][19] which has brought attention from consumer organizations,[2][20] and complaints from parents.[21] As of July 2014, the Federal Trade Commission (FTC) received 170 complaints about Vemma and some colleges have issued warnings to their students about the company.[22]

William Keep, the dean of business at The College of New Jersey and an expert in pyramid schemes has said that the company shows indicators of being a pyramid scheme.[22][12] Keep became aware of Vemma when he found out that a student had been stockpiling unsold energy drinks in his dorm room.[23] Keep and other analysts, as well as former distributors have claimed the company relies on recruiting as its main means of generating revenue.[22][24]

In May 2015, the magazine Stern reported that German and Austrian consumer protection organizations warned that Vemma was exploiting naive customers and unemployed youths who were lured with unrealistic profit expectations into a distribution system that was losing them money.[25]

Products

Vemma had four product lines, all based on their core Vemma nutritional formulation: Vemma, Verve, Bod-e and Next.[26] The name "Vemma" is an acronym representing: vitamins, essential minerals, mangosteen, aloe.[27] Several of the company's products contain caffeine, with some drinks in the Verve line being similar in caffeine content to energy drinks.[28][29] The "Verve" line was one of the official drinks (along with Gatorade) of the Phoenix Suns, which also acted as a distributor.[30]

Government investigations

New Vision International

Vemma was preceded by New Vision International, a Tempe, Arizona-based dietary supplement company founded by Benson Boreyko and his family in 1994. In 1999, New Vision International was ordered by the FTC to stop making claims that one of its products ("God's Recipe") was a cure or treatment for attention deficit hyperactivity disorder (ADD/ADHD).[31] New Vision was accused in the FTC complaint of "unfair or deceptive acts or practices, and the making of false advertisements" about the health benefits of some of their products. In the Decision & Order,[32] the FTC ordered New Vision to stop making various claims; specifically they were ordered (1) to stop saying that one of their product recipes was effective in treating ADD or ADHD, or useful as an alternative to Ritalin; (2) that they not indicate or imply that any testimonial or endorsement of any of their products is typical or ordinary; and (3), that they make no claims about safety or effectiveness in reducing the risk of developing any disease or disorder; and that they communicate all this to their team members in mailings.[33] According to the FTC, that was the first time they had investigated a case involving ADD/ADHD. New Vision settled with the FTC, but did not admit to any wrongdoing.[34]

Italian pyramid scheme accusations

In March 2014, the Italian consumer protection agency, Autorità Garante della Concorrenza e del Mercato (AGCM), fined Vemma Italia (Vemma's Italian branch) €100,000. The AGCM found that Vemma was acting as a pyramid scheme by encouraging recruitment as the primary means of profit, rather than product sales.[35] Vemma issued a statement that it does not believe it was in violation of the law, and that the company has made a number of changes in response to the government's concerns.[36] An analysis by Truth in Advertising determined that Vemma's new compensation plan is not significantly different from the one that the Italian regulators found to be a pyramid scheme.[37]

Investigations in Austria and Switzerland

In April 2015 Truth in Advertising announced that two countries were pursuing legal action against Vemma. The State Secretariat for Economic Affairs (SECO) of Switzerland's Federal Department of Economic Affairs reported Vemma to a prosecutor to pursue criminal charges for running a pyramid scheme. The charges were filed due to multiple complaints, the nature of which are not public until a judgement has been reached.[38][39]

In Austria, the Vorarlberg Chamber of Labor’s Consumer Protection Division said that it would pursue criminal proceedings against the company for being a pyramid scheme. In August 2014, the agency had issued a statement warning consumers against becoming involved with the company.[38][40]

Shutdown by FTC

On August 21, 2015, the U.S. Federal Trade Commission filed a lawsuit against Vemma, freezing the company's assets and seeking injunctive relief for consumer redress.[41] The FTC alleges that Vemma is a pyramid scheme; that Vemma has misrepresented participants' earning potential; and that the Boreyko family has inappropriately incorporated dozens of companies with the same staff, facilities, and commingled funding.[42][43] The restraining order was set to expire fourteen days later unless extended.[44] The company itself, CEO Benson Boreyko, and distributor Tom Alkazin were named as defendants.[45]

On September 18, 2015, U.S. District Court Judge John Tuchi barred Vemma from resuming normal operations and appointed a monitor to oversee its business practices, saying there was little doubt it was operating as a pyramid scheme. The ruling prohibited Vemma from paying commissions, recruiting new members, offering rewards for purchases and tying sales to multi-level marketing. In his ruling, Tuchi characterized Vemma's marketing material as deceptive and misleading, and noted that "some Vemma material also contains representations the Court would characterize as ridiculous—bordering on absurd—such that a listener could not reasonably be expected to believe them."[46]

Penalty

In a September 2016 judgement, Vemma reached a settlement agreement with the FTC, wherein Vemma Nutrition Company, Vemma's CEO Benson Boreyko, as well as Tom Alkazin and Alkazin's wife, Bethany, agreed to a permanent injunction and monetary penalties.[47]

Vemma Nutrition Company was ordered to pay a USD $238 million fine as a company, restructure its compensation plan, and forfeit certain company assets.[48][49] The Alkazins, on the other hand, were fined USD $6.7 million as individuals.

As part of the settlement the defendants were banned "from involvement in any pyramid, Ponzi, or chain marketing schemes."[50]

References

1. ^1 {{cite news|last1=Hannan|first1=Caleb|title=Selling the Bro Dream: Are Frat Boys Peddling Vemma Suckers?|url=https://www.rollingstone.com/culture/features/selling-the-bro-dream-vemma-20141030|accessdate=25 November 2014|work=Rolling Stone|date=30 October 2014}}
2. ^1 2 {{cite news|last=Celarier|first=Michelle|title=Verve energy drink turning college students into sales force|url=https://nypost.com/2013/09/29/energy-drinks-college-push-raising-pyramid-alarms/|accessdate=11 January 2014|newspaper=New York Post|date=29 September 2013}}
3. ^{{cite web|url=http://www.vemma.com/vemma/|title=Vemma, Building A Solid Nutritional Foundation IS Vital To Your Overall Health|publisher=Vemma|accessdate=2014-11-14}}
4. ^{{cite web|last=Babener|first=Jeffrey|title=New Vision USA, Inc.|url=http://www.mlmlegal.com/profiles/mlm-profiles-newvision.htm|work=MLM Legal|accessdate=2014-01-26}}
5. ^{{cite web|url=http://www.vemma.com/our-story/bk-boreyko.cfm|title=Executive Bios|date=May 2013|publisher=Vemma|accessdate=2013-08-01}}
6. ^{{cite news|last1=Rena Murray|first1=Laura|title=Behind Boreyko's Millions|url=http://projects.aljazeera.com/2014/multilevel-marketing/sidebar.html|accessdate=29 October 2014|work=al Jazeera|date=14 October 2014}}
7. ^{{cite web|title=Verve Energy Drink |url=http://verveenergydrink.org/|publisher=Verve|accessdate=24 March 2014}}
8. ^{{cite web|title=Vemma Compensation Plan|url=http://www.vemma.com/Backoffice/pdf/compensationPlan.pdf|work=Vemma|accessdate=18 January 2014}}
9. ^{{cite web|url=http://www.international.to/index.php?option=com_content&view=article&id=27338%3Avemma®-makes-the-move-to-affiliate-marketing&catid=309%3Apitchengine&Itemid=446|title=Vemma Makes the Move To Affiliate Marketing|agency=Pitch Engine (press release)|date=January 6, 2014|accessdate=2014-11-14|df=mdy-all}}{{dead link|date=July 2018|bot=medic}}{{cbignore|bot=medic}}
10. ^{{cite news|last=Nuyten|first=Ted|title=Vemma 2.0 Announced – Brand Partners Will Be Affiliates|url=http://www.businessforhome.org/2013/11/vemma-2-0-announced-brand-partners-will-be-affiliates/|accessdate=18 January 2014|newspaper=Business for Home.org|date=13 November 2013}}
11. ^{{cite web|title=Direct Selling Association - Vemma Nutrition Company|url=http://www.dsa.org/forms/CompanyFormPublicMembers/view?id=185800000094|publisher=dsa.org|accessdate=26 April 2014}}
12. ^{{cite news|last=Celarier|first=Michelle|title=Verve energy drink company tries to stay off regulators’ radar|url=https://nypost.com/2014/04/03/verve-energy-drink-company-tries-to-stay-off-regulators-radar/|accessdate=6 April 2014|newspaper=New York Post|date=3 April 2014}}
13. ^{{cite news|last=Celarier|first=Michelle|title=Verve ruling hits a nerve|url=https://nypost.com/2014/04/26/verve-ruling-hits-a-nerve/|accessdate=26 April 2014|newspaper=New York Post|date=26 April 2014}}
14. ^1 {{cite web|url=https://www.ftc.gov/system/files/documents/cases/150826vemmacmptf.pdf|title=Complaint for Permanent Injunction|work=Vemma|accessdate=22 September 2015}}
15. ^1 {{cite web|url=https://www.nytimes.com/2015/09/15/opinion/joe-nocera-the-pyramid-scheme-problem.html?_r=0|title=The Pyramid Scheme Problem|author=Nocera, Joe|date=15 September 2015|publisher=New York Times|accessdate=1 October 2015}}
16. ^{{cite web|url=https://www.ftc.gov/system/files/documents/cases/150826vemmaorder.pdf|title=Temporary Restraining Order|work=Vemma|accessdate=22 September 2015}}
17. ^{{cite web|url=https://www.truthinadvertising.org/vemma-pay-millions-settlement-ftc/|title=Vemma reaches $238 settlement with FTC|website=TruthInAdvertising.org|accessdate=22 December 2016}}
18. ^{{cite news|last1=Hunt|first1=Amber|title=True believers bank on Vemma's promises|url=http://www.cincinnati.com/story/news/your-watchdog/consumer/2014/07/13/true-believers-bank-vemmas-promises/12589615/|accessdate=20 July 2014|work=Cincinnati Enquirer|date=13 July 2014}}
19. ^{{cite web|last1=Havranek|first1=Andrew|title=Vemma Company Targeting College Students|url=http://www.wdtv.com/wdtv.cfm?func=view§ion=5-News&item=Vemma-Company-Targeting-College-Students-16982|website=WDTV.com|accessdate=20 July 2014|date=14 July 2014}}
20. ^1 2 {{cite web|title=Nine Things You Should Know About Vemma|url=https://www.truthinadvertising.org/eight-things-you-should-know-about-vemma/|work=Truth in Advertising.org|accessdate=11 January 2014|date=4 October 2013}}
21. ^{{cite news|last1=Loew|first1=Morgan|title=Parents complain: drink company turning their kids away from college|url=http://www.kpho.com/story/29118697/parents-complain-drink-company-turning-their-kids-away-from-college|accessdate=21 May 2015|work=KPHO|agency=CBS|date=20 May 2015|archiveurl=https://web.archive.org/web/20150521083932/http://www.kpho.com/story/29118697/parents-complain-drink-company-turning-their-kids-away-from-college|dead-url=no|archivedate=21 May 2015}}
22. ^1 2 3 4 {{cite news|last1=Rossen|first1=Jeff|last2=Billington|first2=Jovanna|title=Controversial energy drink company targets students as sellers|url=http://www.today.com/news/controversial-energy-drink-company-targets-students-sellers-1D79991141|accessdate=31 July 2014|work=Today News|agency=NBC News|date=31 July 2014}}
23. ^{{cite news|last1=Murray|first1=Laura Rena|last2=Abrahamian|first2=Atossa|title=Vemma's Army of Young Recruits|url=http://projects.aljazeera.com/2014/multilevel-marketing/|accessdate=29 October 2014|date=14 October 2014|work=al Jazeera}}
24. ^1 2 {{cite news|title=Pyramid Scheme Expert Issues Warning About Vemma|url=https://www.truthinadvertising.org/pyramid-scheme-expert-issues-warning-vemma/|accessdate=31 July 2014|work=Truth in Advertising (organization)|date=17 September 2013}}
25. ^{{cite news|title=Verbraucherschützer warnen vor Einstieg bei Vemma|url=http://www.stern.de/tv/sterntv/energydrink-verve-wie-vemma-mit-seinem-vertriebssystem-jugendliche-koedert-2190274.html|accessdate=1 May 2015|work=Stern TV|date=1 May 2015|language=German|archive-url=https://web.archive.org/web/20150501154114/http://www.stern.de/tv/sterntv/energydrink-verve-wie-vemma-mit-seinem-vertriebssystem-jugendliche-koedert-2190274.html|archive-date=1 May 2015|dead-url=yes|df=dmy-all}}
26. ^{{cite web|url=http://www.vemma.com/vemma/index.cfm|date=July 2013|title=Products|publisher=Vemma|accessdate=2013-08-01}}
27. ^{{cite web|url=http://drinkformoney.com/what-is-verve-energy-drink-vemma-energy-drink/|title=Verve Energy Drink|accessdate=2 August 2013|archive-url=https://web.archive.org/web/20130826030918/http://drinkformoney.com/what-is-verve-energy-drink-vemma-energy-drink/|archive-date=26 August 2013|dead-url=yes|df=dmy-all}}
28. ^{{cite web|title=Caffeine in Verve Energy Drink|url=http://www.caffeineinformer.com/caffeine-content/verve-energy-drink|work=Caffeine Informer|accessdate=20 January 2014}}
29. ^{{cite web|url=http://www.livestrong.com/article/454167-vemma-verve-nutritional-facts|title=Vemma Verve Nutritional Facts|date=May 25, 2011|publisher=Brian Willet|accessdate=2014-01-11}}
30. ^{{cite news|last=Lombardo|first=John|title=Phoenix Suns deal with Verve puts team in distributor role|url=http://www.bizjournals.com/phoenix/stories/2008/02/11/daily4.html?page=all|accessdate=18 January 2014|newspaper=Phoenix Business Journal|date=11 February 2008|agency=Street & Smith's SportsBusiness Journal}}
31. ^{{cite web|title=DOCKET NO. C-3856 DECISION AND ORDER|url=http://www.ftc.gov/sites/default/files/documents/cases/1999/03/9623270newvision.do_.htm|publisher=United States Federal Trade Commission|accessdate=27 April 2014}}
32. ^{{cite web|url=http://www.ftc.gov/os/1999/03/9623270newvision.do.htm|title=New Vision International Inc. - Decision and Order No. C-3856|author=United States of America, Federal Trade Commission, Robert Pitofsky, Chairman| date=March 1999|publisher=Ftc.gov|accessdate=2013-06-21}}
33. ^{{cite web|url=http://www.ftc.gov/os/1999/03/9623270newvisioncomplaint.htm|title=New Vision International Inc. - Complaint No. C-3856|author=US Federal Trade Commission, Donald S. Clark, Secretary| date=March 1999|publisher=Ftc.gov|accessdate=2013-06-21}}
34. ^{{cite book|last=Whitlock|first=Chuck|title=Mediscams|date=13 January 2003|publisher=St. Martin's Griffin|isbn=9780312306021|pages=146–147|url=https://books.google.com/books?id=gXKei9Ng5coC&pg=PA146&dq=%22new+vision%22}}
35. ^1 {{cite news|title=Vendite piramidali, Antitrust multa 3 società per 500mila euro|url=http://lastampa.it/2014/03/10/vendite-piramidali-antitrust-multa-societ-per-mila-euro-fe5RHpmDQo4vjJtBTApJxN/pagina.html|accessdate=13 April 2014|newspaper=La Stampa|date=10 March 2014|language= Italian}}
36. ^{{cite news|last=Nuytem|first=Ted|title=Vemma Responses To Italian Anti-Trust Ruling|url=http://www.businessforhome.org/2014/03/vemma-responses-to-italian-anti-trust-ruling/|accessdate=13 April 2014|newspaper=Business For Home|date=12 March 2014}}
37. ^1 2 {{cite web|url=https://www.truthinadvertising.org/vemma-deemed-pyramid-scheme-italy|title=Vemma Deemed Pyramid Scheme in Italy|author=truthinadvertising.org| date=24 April 2014}}
38. ^1 {{cite news|title=Vemma Facing Judicial Inquiries in Europe|url=https://www.truthinadvertising.org/vemma-facing-judicial-inquiries-in-europe/|accessdate=16 May 2015|work=Truth in Advertising (organization)|date=30 April 2015}}
39. ^{{cite news|author1=Madeleine Stäheli Toualbia|title=Strafanzeige gegen Energy-Drink Vertreiber Vemma|url=http://www.limmattalerzeitung.ch/limmattal/zuerich/strafanzeige-gegen-energy-drink-vertreiber-vemma-129437144|accessdate=16 August 2015|work=Limmattaler Zeitung|date=13 August 2015|language=German}}
40. ^{{cite web|title=Vorarlberg Chamber of Labor Warns Against the Sale and Distribution of "Vemma" Energy Drink|url=https://www.truthinadvertising.org/wp-content/uploads/2015/04/Vemma-Austrian-source-text-EN-with-watermark.pdf|publisher=Vorarlberg Chamber of Labor's Consumer Protection Division|accessdate=16 May 2015|language=English|date=20 August 2014}} Translated from German by Truth in Advertising
41. ^1 {{cite news|last1=Hunt|first1=Amber|title=FTC targets company after Enquirer investigation|url=http://www.cincinnati.com/story/news/2015/08/25/ftc-targets-company-enquirer-investigation/32348675/|accessdate=August 26, 2015|work=Cincinnati Enquirer|date=August 26, 2015}}
42. ^{{cite news|last1=Gara|first1=Antoine|title=Federal Trade Commission Calls Vemma A Pyramid Scheme That Preys On Young Adults|url=https://www.forbes.com/sites/antoinegara/2015/08/26/federal-trade-commission-calls-vemma-a-pyramid-scheme-that-preys-on-young-adults/|accessdate=27 August 2015|work=Forbes|date=26 August 2015}}
43. ^{{cite news|last1=Rena Murray|first1=Laura|title=Vemma Nutrition shut down for running pyramid scheme|url=http://america.aljazeera.com/articles/2015/8/26/vemma-shut-down-for-running-pyramid-scheme.html|accessdate=27 August 2015|work=al Jazeera|date=26 August 2015}}
44. ^{{cite news|last1=Addady|first1=Michal|title=This energy drink company was shut down for operating a pyramid scheme|url=http://fortune.com/2015/08/27/energy-drink-pyramid-scheme/|accessdate=30 August 2015|work=Fortune|date=27 August 2015}}
45. ^1 {{cite news|title=FTC: Vemma Temporarily Shut Down for Running Pyramid Scheme|url=http://abcnews.go.com/Business/wireStory/ftc-vemma-shut-running-pyramid-scheme-33333526|accessdate=26 August 2015|work=ABC News|agency=Associated Press|date=26 August 2015}}
46. ^{{cite news|last1=Anglen|first1=Robert|title=Judge forbids Vemma to resume normal operations; company to be supervised by federal monitor|url=http://www.azcentral.com/story/money/business/consumers/2015/09/18/vemma-pyramid-scheme-case-federal-judge-ruling/32571325/|accessdate=September 18, 2015|publisher=The Arizona Republic|date=September 18, 2015}}
47. ^{{cite web|title=VEMMA REACHES SETTLEMENT AGREEMENT IN FTC PYRAMID CASE|url=https://www.truthinadvertising.org/ftc-v-vemma-the-year-in-review/|website=TruthInAdvertising.org|accessdate=3 October 2016}}
48. ^{{cite web|last1=Maynard|first1=Christopher|title=FTC agreement puts a permanent stop to the Vemma pyramid scheme|url=https://www.consumeraffairs.com/news/ftc-agreement-puts-a-permanent-stop-to-the-vemma-pyramid-scheme-121616.html|website=Consumer Affairs|accessdate=21 December 2016}}
49. ^{{cite web|last1=Woods|first1=Alden|title=Tempe's Vemma settles with FTC; fined $238 million, admits no wrongdoing|url=http://www.azcentral.com/story/money/business/consumers/2016/12/20/vemma-tempe-based-energy-drink-company-settles-feds/95667174/|website=AZ Central|publisher=The Arizona Republic|accessdate=21 December 2016}}
50. ^1 {{cite web|title=Vemma Agrees to Ban on Pyramid Scheme Practices to Settle FTC Charges|url=https://www.ftc.gov/news-events/press-releases/2016/12/vemma-agrees-ban-pyramid-scheme-practices-settle-ftc-charges|website=FTC.gov|accessdate=21 December 2016}}

External links

  • {{Official website|http://www.vemma.com/}}

3 : Companies based in Scottsdale, Arizona|Companies established in 2004|Multi-level marketing companies
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