A court has temporarily pack up a mutli-level marketing company called Success By Health, which sells instant coffee that claims to supply health benefits from mushrooms.
The ruling in the week by a federal judge in Arizona also froze the assets of the company’s top executives, including its founder, James “Jay” Dwight Noland, Jr.
The decision came in response to a Federal Trade Commission complaint claiming that Nevada-based Success By Health may be a “pyramid scheme” designed to complement the company’s top executives by emphasizing member recruitment over the sale of its products.
The FTC complaint calls Noland a “serial scheme promoter” and says the company’s executives “bait entrepreneurial consumers into a financial abyss by telling them that they’re going to attain ‘financial freedom,’ and never need to work again, if they enroll as ‘Affiliates’ in Defendants’ Success By Health (‘SBH’) program and follow Noland’s instructions.”
David Eisenstein, an attorney for fulfillment By Health and its executives, said the FTC’s allegations are “baseless” and therefore the company plans to dispute them.”Success By Health was pack up and put out of business by the FTC without due process of law , due cause or any advance notice whatsoever,” Eisenstein said during a statement to Business Insider. “The company plans to vigorously contest the baseless allegations made during this case by the FTC and expects to resume its normal operations within the not too distant future. Success By Health will then resume its exceptional service to its Affiliates and customers by delivering the standard products and opportunities that it’s known.”Millionaire workshops and a ‘perpetual money and health machine’
The company’s 5,000 enrollees, called affiliates, buy Success By Health products at wholesale prices then rotate and sell them to consumers at a markup. Affiliates can earn commissions off the sales of their recruits and thru minimum monthly orders from Success By Health, consistent with the FTC complaint.
Success By Health’s products include coffees and teas called MycoCafe that contain ganoderma, a mushroom that the company’s website says is “the world’s favorite antioxidant herb.”
The company also offers trainings. Its website is currently advertising a two-day “Millionaire Workshop” led by Noland that costs about $1,000 to attend.In videos posted to Facebook, Noland has called the business a “perpetual money and health machine” and said his past trainees have bought “Lamborghinis; Rolls Royces; Bentleys; multimillion-dollar homes in single-, double-, and triple-gated communities; [and] Bahamas trips” by taking note of his advice, consistent with the FTC complaint.Success By Health affiliates had spent quite $5.7 million — or roughly $1,100 per person — on its products and training through June 2019, consistent with the FTC complaint. In return, affiliates earned about $1.03 million, or about $200 per person, the complaint says.
“After accounting for the prices of the program, products, and events, enrollees lost many dollars,” the FTC said during a statement. Meanwhile, Success by Health executives earned about $1.3 million, the complaint says.
The FTC complaint also says that Noland and his wife “fled their $1.2 million rented house for South America in October 2019” after learning that the FTC was investigating them.