Summary of Action

Vemma Nutrition Company, which was formed in 2004 by Benson K. Boreyko and his two sisters, was the subject of an on-going investigation by TINA.org after receiving complaints from college students and their parents about the business’s marketing practices.  During the course of its investigation, TINA.org found that the Arizona-based company was operating an illegal pyramid scheme that targeted high school and college students, and that it was making unsubstantiated health claims about the various liquid supplements, energy drinks, and weight management products that it sold, all of which violated a prior FTC consent order filed against Boreyko, the company’s CEO.

In March 2014, TINA.org learned that Italy’s Competition and Markets Authority (AGCM) declared that Vemma, which used a similar compensation plan in the U.S., operated an illegal pyramid scheme and had sanctioned the company €100,000 (roughly $140,000). Vemma. As a result, TINA.org sent a letter to the FTC in April 2014 alerting the agency of the AGCM’s decision.  TINA.org also notified the Advertising Standards Authority in the UK (who referred the matter to its counterparts in Ireland) and the Competition Bureau in Canada in August 2014 because Vemma conducts business in those countries as well.

In June 2014, TINA.org’s investigation demonstrated that numerous Vemma affiliates had been using unsubstantiated health and treatment claims about Vemma products to market the Vemma business and its product lines in violation of the prior FTC consent order and notified the agency.

In August 2015, the FTC filed a lawsuit against Vemma for, among other things, operating an illegal pyramid scheme.  One month later, in September 2015, the FTC obtained a preliminary injunction that severely limited Vemma business operations while the FTC’s lawsuit was pending.  Finally, in December 2016, the FTC and Vemma reached a $238 million settlement agreement that bans recruitment-focused business practices, as well as the use of any deceptive income claims and unsubstantiated health claims.  The agreement was approved and entered as a final order. On September 19, 2019, the FTC announced that it would be mailing 28,224 refund checks averaging $78.93 to Vemma victims.

Click here to see FTC v. Vemma Pyramid Lawsuit Documents

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