Here’s How the Vemma Case Ends

September 21st, 2015

It’s been a little over a month since the FTC filed its complaint against the Vemma defendants, and the outcome of the case is already a foregone conclusion – the case will settle. Vemma CEO Benson K. Boreyko will agree to a Stipulated Judgment on behalf of himself and the corporate defendants, and in all likelihood Vemma, an Arizona based dietary supplement company, will continue to limp along selling its products until Boreyko comes up with his next scheme (oops, I meant business plan). Below are five reasons settlement is likely.

1. The Odds

Out of the last 24 cases that the FTC has brought accusing an MLM of being a pyramid scheme, a favorable FTC settlement has been reached in 20 of those cases, with most settlements taking place within a year of the lawsuit being initiated. (And in those cases where defendants didn’t fold, the FTC still won.)

2. Precedent

Boreyko is no stranger to settling with the FTC. In 1999, Boreyko entered into an FTC Consent Order that binds him and Vemma and any other subsequent companies he’s involved with from making inappropriate health and treatment claims until March 3, 2019.

3. The Verdict

If Vemma and Boreyko take this case to trial, they will lose. This is so because the court has made it abundantly clear (once when granting the temporary restraining order – TRO – and again when entering the preliminary injunction) that all of the evidence it has reviewed points to the inevitable conclusion that the corporate defendants and Boreyko were operating a pyramid scheme.

4. Health Claims

Ah yes, those pesky health claims again. Vemma and Boreyko have violated the 1999 FTC Consent Order on dozens of occasions and the FTC is fully aware of this. So even if by some miracle (and yes it would take a miracle) Vemma and its CEO could evade the pyramid scheme allegations, they will still have to contend with having violated their previous FTC consent order.

5. The Economics

Litigating this case would be extremely expensive for Boreyko and Vemma – costing millions of dollars and taking multiple years. And all the while Vemma will be hobbling along with a strict preliminary injunction in place and a monitor keeping a vigilant eye on all aspects of the business. At 53 years old and with a $21,000 a month obligation to his kids and ex-wife, Boreyko doesn’t have the time or economic freedom to play hardball with the FTC.

Oh, and what about top ranking Vemma distributors Tom and Bethany Alkazin you ask? Yes they will settle too. The only question with regard to them is how much money they will end up forking over to the FTC.

Coming next: An analysis of what a Vemma settlement could look like.

Print Friendly

Multi-Level Marketing – a way of distributing products or services in which the distributors earn income from their own retail sales and from retail sales made by their direct and indirect recruits.

Tags: ,


About the Author

Bonnie Patten

Bonnie, executive director of TINA.org, is an attorney and mother of three. Her commitment to educating the public about deceptive marketing stems from her belief that education is the only viable way to effectively eradicate the market for false ads.



One Response to Here’s How the Vemma Case Ends

  1. Douglas M. says:

    Bonnie – I believe you are correct as to the eventual outcome of the Vemma case. In the meantime, as with Burnlounge, we will have the opportunity to observe a “natural experiment.” What happens to the demand for an MLM’s products once the MLM incentives are removed?

Leave a Reply

Back to Top ↑