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New Vision International

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Adapted from the English Wikipedia article New Vision International, available under CC BY-SA 4.0Updated 25 July 202514 sources
Vemma Nutrition Company
Company typePrivate
IndustryDietary supplements, Multi-level marketing
Founded2004; 22 years ago (2004)
FounderBenson K. Boreyko, Lauren Boreyko, Karen Boreyko
Defunct2015 (2015)
FateShut down by FTC due to deceptive business practices; succeeded by Bodē Pro
Headquarters
Tempe, Arizona
,
United States
Key people
Benson K. Boreyko (Founder and CEO), Karen Boreyko (Co-founder), Lauren Boreyko (Co-founder), Brad Wayment (COO), Yibing Wang (Chief Scientific Officer), Adrian Berry (Chief Medical Officer)
ProductsDietary supplements including Vemma, Verve, Bod·ē, NEXT

Vemma () was a privately owned multi-level marketing enterprise concentrating on dietary supplements.[1][2][3] Headquartered in Tempe, Arizona, the company was established in 2004 by Benson K., Lauren, and Karen Boreyko.[4][5] In 2013, Vemma declared revenues of US$221 million.[6] The organization mainly recruited young adults in their twenties as distributors and faced extensive allegations of functioning as a pyramid scheme, which led to penalties from Italian authorities and a 2015 shutdown mandated by the FTC due to deceptive business practices.[7][8][9]

After Vemma ceased operations, the Boreyko family introduced Bodē Pro in 2017,[10] merging Vemma’s product offerings into this new brand by 2018, thereby sustaining their involvement in the dietary supplement sector.[11][12]

Key leadership comprised founder and CEO Benson K. Boreyko, co-founders Karen and Lauren Boreyko, COO Brad Wayment, Chief Scientific Officer Yibing Wang, and Chief Medical Officer Adrian Berry. The firm’s business approach relied on multi-level marketing tactics to promote its global distribution of supplement lines including Vemma, Verve, Bod·ē, and NEXT.

History

Throughout the 1990s, the Boreyko family established multiple companies under their control, all sharing the same physical address. In 1994, they launched New Vision International, a business focused on nutritional supplements. Additionally, the family owns a limited liability company that purchases commercial real estate and leases it back to Boreyko-affiliated businesses. Founded in 2004, Vemma Nutrition Company absorbed New Vision fully by 2011.

Vemma marketed its products via online platforms and independent distributors (affiliates), who earned commissions based on their own sales and those generated by their recruited teams. In 2013, Vemma repositioned itself as an affiliate marketing company; however, founder Benson K. Boreyko asserted that the compensation structure remained intact. The company held membership in the U.S. Direct Selling Association.

In April 2014, Vemma revised its compensation system by eliminating sign-up fees and removing the $150 minimum monthly product purchase requirement for earning commissions. This adjustment aimed to circumvent regulatory challenges faced by competitors such as Herbalife. Nevertheless, watchdog organization Truth in Advertising criticized these changes as deceptive since sign-up fees had never been mandatory and minimum purchase requirements continued to apply.

In August 2015, the U.S. Federal Trade Commission (FTC) filed suit against Vemma alleging operation of an unlawful pyramid scheme. The court issued an injunction limiting specific marketing methods and compensation practices while appointing a compliance monitor. By December 2016, Vemma reached a $238 million settlement with the FTC; this agreement prohibited the company, its CEO, and leading distributors from engaging in recruitment-driven ventures, making misleading income statements, or promoting unverified health claims.

Business model

Vemma operated as a multi-level marketing (MLM) enterprise.[1][2][3]

Recruitment of college-aged promoters

The company placed significant emphasis on enlisting distributors primarily from college demographics,[13]Cite error: The opening <ref> tag is malformed or has a bad name which drew attention from consumer organizations,[2][3] as well as concerns voiced by parents.Cite error: The opening <ref> tag is malformed or has a bad name By mid-2014, the Federal Trade Commission (FTC) had documented 170 complaints, and several universities issued alerts to their students regarding Vemma.[6]

William Keep, the business dean at The College of New Jersey and an authority on pyramid schemes, identified characteristics suggesting Vemma functioned similarly to a pyramid scheme.[6][9] His suspicions arose after discovering a student hoarding unsold energy drinks in his dormitory.[14] Industry experts and former participants maintain that Vemma’s main income source was recruitment rather than direct product sales.[6][9]

In May 2015, Stern revealed that consumer protection agencies in Germany and Austria cautioned against Vemma, stating it exploited inexperienced consumers and unemployed young people with unrealistic earnings claims, resulting in monetary losses within its distributor network.Cite error: The opening <ref> tag is malformed or has a bad name

Products

Vemma’s product range featured four categories built around its foundational nutritional blend: Vemma, Verve, Bod-e, and Next. The term "Vemma" represents vitamins, essential minerals, mangosteen, and aloe. Internally, distributors referred to their activities as a "Very Exciting Money Making Activity." Several items, especially those in the Verve collection, contained caffeine levels on par with typical energy drinks. Notably, Verve was recognized as an official beverage partner of the Phoenix Suns, who also acted as a distributor.

New Vision International

Prior to Vemma’s establishment, New Vision International was a dietary supplement firm based in Tempe, Arizona, founded by Benson Boreyko and his family in 1994. In 1999, the FTC mandated New Vision to halt claims that its product "God's Recipe" could treat ADD/ADHD. The FTC accused the company of misleading advertising and false health assertions. The injunction required New Vision to cease promoting effectiveness against ADD/ADHD or positioning its products as alternatives to Ritalin, prohibited implying testimonials reflected typical results, and banned statements about disease risk reduction. New Vision agreed to the settlement without admitting fault.

Italian pyramid scheme allegations

In March 2014, Italy’s consumer protection authority, Autorità Garante della Concorrenza e del Mercato (AGCM), imposed a €100,000 fine on Vemma Italia for functioning as a pyramid scheme by emphasizing recruitment over product sales. Vemma denied any legal wrongdoing and introduced modifications in response to the concerns. Nevertheless, an evaluation by Truth in Advertising concluded that Vemma’s updated compensation structure remained largely consistent with the plan previously classified as a pyramid scheme by Italian regulators.

Inquiries in Austria and Switzerland

In April 2015, Truth in Advertising revealed that Switzerland’s State Secretariat for Economic Affairs (SECO) had forwarded Vemma to prosecutors for criminal investigation amid pyramid scheme accusations, prompted by numerous complaints. Likewise, Austria’s Vorarlberg Chamber of Labor initiated criminal proceedings against Vemma, issuing a consumer warning in August 2014 regarding the company’s business practices. These legal measures underscore the persistent examination of Vemma’s activities within European jurisdictions.

FTC Enforcement Action

On August 21, 2015, the U.S. Federal Trade Commission initiated legal action against Vemma, securing a freeze on its assets and pursuing restitution for affected consumers. The FTC accused Vemma of operating a pyramid scheme, providing false claims about potential earnings, and alleged that the Boreyko family improperly controlled several companies sharing personnel and financial resources. The imposed restraining order was initially scheduled to last fourteen days unless extended by the court. CEO Benson Boreyko, distributor Tom Alkazin, and the corporation were named as defendants.

On September 18, 2015, a federal judge determined that Vemma functioned as a pyramid scheme employing misleading marketing tactics. A court-appointed monitor was assigned to supervise the company’s operations, effectively halting its usual business activities.

Sanctions

By September 2016, Vemma reached an agreement with the FTC. The settlement involved Vemma Nutrition Company, CEO Benson Boreyko, and Tom and Bethany Alkazin consenting to a permanent injunction along with financial penalties. The company was mandated to pay $238 million in fines, overhaul its compensation structure, and surrender assets. Additionally, the Alkazins faced individual fines totaling $6.7 million.

The agreement prohibited all defendants from participating in pyramid schemes, Ponzi schemes, or chain marketing ventures in the future. The Boreykos’ successor enterprise, Bodē Pro, is required to ensure that the majority of its sales derive from external customers to adhere to legal requirements and prevent classification as a pyramid scheme.

External links

  1. ↑ 1.0 1.1 Cite error: Invalid <ref> tag; no text was provided for refs named rollingstone
  2. ↑ 2.0 2.1 2.2 Cite error: Invalid <ref> tag; no text was provided for refs named nypost
  3. ↑ 3.0 3.1 3.2 Cite error: Invalid <ref> tag; no text was provided for refs named truthinadvertising
  4. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named Babener
  5. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named VemmaBio
  6. ↑ 6.0 6.1 6.2 6.3 Cite error: Invalid <ref> tag; no text was provided for refs named today
  7. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named FTC1
  8. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named NYT091515
  9. ↑ 9.0 9.1 9.2 Cite error: Invalid <ref> tag; no text was provided for refs named pyramidexpert
  10. ↑ Business For Home
  11. ↑ Businessday NG
  12. ↑ behindmlm.com
  13. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named cincinnati
  14. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named alJazeera

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