Vemma

Vemma Nutrition Company

Company type	Private
Industry	Dietary supplements, Multi-level marketing
Founded	2004
Founder	Benson K. Boreyko, Lauren Boreyko, Karen Boreyko
Defunct	2015
Fate	Shut down by U.S. Federal Trade Commission due to pyramid scheme allegations
Headquarters	Tempe, Arizona , United States
Area served	International
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)
Products	Dietary supplements including Vemma, Verve, Bod-e, Next

Vemma () Nutrition Company was a privately owned multi-level marketing enterprise focused on dietary supplements. Headquartered in Tempe, Arizona, it was established in 2004 by Benson K., Lauren, and Karen Boreyko. The firm reported revenues of US$221 million in 2013, with its primary distributor demographic being individuals in their twenties.

The company encountered considerable criticism, as U.S. media outlets, industry analysts, and former distributors often accused it of functioning as a pyramid scheme. In 2015, the FTC ordered its closure due to deceptive business practices. Additionally, Vemma faced financial penalties imposed by Italian authorities.

After Vemma’s shutdown, the Boreyko family introduced Bodē Pro in 2017, integrating Vemma’s original product line into this new enterprise by 2018, where those products remain available. Key leadership figures included 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.

Prior to its termination, Vemma’s business model was based on multi-level marketing within the nutritional supplement sector, operating internationally.

History

From the 1990s onward, the Boreyko family established several companies sharing a common address. In 1994, they launched New Vision International, a company specializing in nutritional supplements. The family also controls a limited liability company that manages commercial real estate holdings, including properties leased to Boreyko-affiliated businesses. Vemma Nutrition Company was incorporated in 2004 and absorbed New Vision International by 2011.

Vemma distributed its products through an online platform and a network of independent affiliates who earned commissions based on their personal sales and those made by their recruited teams. In 2013, the company repositioned itself as an affiliate marketing business; however, its compensation structure remained largely unchanged. Vemma was a member of the U.S. Direct Selling Association.

In April 2014, Vemma adjusted its compensation plan by eliminating sign-up fees and removing the $150 minimum monthly purchase requirement needed to qualify for commissions. This change aimed to avoid regulatory challenges similar to those faced by other MLM companies such as Herbalife. Nonetheless, watchdog group Truth in Advertising pointed out that sign-up fees had never been mandatory and that minimum purchase thresholds still applied for full commission eligibility.

In August 2015, the U.S. Federal Trade Commission (FTC) initiated legal action against Vemma for running an unlawful pyramid scheme. The court issued an injunction limiting certain marketing tactics and compensation methods and appointed a monitor to oversee compliance. By December 2016, Vemma reached a $238 million settlement with the FTC; this agreement prohibited the company’s executives and leading distributors from engaging in recruitment-driven ventures, making deceptive earnings claims, or promoting unverified health benefits.

Business model

Vemma functioned as a multi-level marketing (MLM) organization.

Focus on college-aged distributors

The company deliberately targeted college-aged individuals as distributors, which drew concern from consumer advocacy groups and complaints from parents. By mid-2014, the Federal Trade Commission (FTC) had received approximately 170 grievances related to Vemma’s recruitment strategies, prompting several universities to issue alerts warning students about the company.

William Keep, business dean at The College of New Jersey and an authority on pyramid schemes, identified signs indicating that Vemma operated similarly to a pyramid scheme. He highlighted the company’s dependence on recruitment as its main income source and noted reports of unsold inventory accumulating among student distributors. Former participants and industry experts shared these concerns about the emphasis on recruiting over direct product sales.

In 2015, consumer protection agencies in Germany and Austria cautioned that Vemma targeted inexperienced consumers and unemployed young adults with exaggerated profit promises, resulting in many becoming involved in financially harmful distribution networks.

Products

Vemma's range included four distinct product lines centered around their foundational nutritional blend: Vemma, Verve, Bod-e, and Next. The term "Vemma" stands for vitamins, essential minerals, mangosteen, and aloe. Within the company, affiliates often referred to "VEMMA" as an abbreviation for "Very Exciting Money Making Activity." Several items, especially those in the Verve collection, contained caffeine amounts similar to popular energy beverages. Importantly, Verve served as an official beverage sponsor for the Phoenix Suns, who also acted as a distributor, thereby strengthening Vemma's exposure in the marketplace.

New Vision International

Prior to Vemma's establishment, New Vision International—a dietary supplement firm based in Tempe, Arizona and founded by Benson Boreyko and his family in 1994—was subject to Federal Trade Commission (FTC) action in 1999. The FTC required New Vision to halt claims that its product "God's Recipe" could treat or cure ADD/ADHD. The complaint addressed deceptive marketing practices and false health claims. As part of the settlement, New Vision was instructed to stop suggesting that testimonials reflected typical experiences, refrain from making unverified safety or disease-related assertions, and ensure these guidelines were communicated to all team members. The company resolved the matter without admitting any wrongdoing.

Italian pyramid scheme allegations

In March 2014, Italy’s consumer protection agency, Autorità Garante della Concorrenza e del Mercato (AGCM), imposed a €100,000 fine on Vemma Italia for allegedly running a pyramid scheme that emphasized recruitment over actual product sales. Vemma denied any legal breaches and made adjustments intended to address these issues. Nevertheless, an evaluation by Truth in Advertising indicated that Vemma’s updated compensation structure remained largely consistent with the plan Italian authorities had classified as a pyramid scheme.

Investigations in Austria and Switzerland

In April 2015, reports from Truth in Advertising revealed that Switzerland’s State Secretariat for Economic Affairs (SECO) had forwarded Vemma to prosecutors for criminal investigation concerning pyramid scheme accusations following numerous complaints. Likewise, Austria’s Vorarlberg Chamber of Labor Consumer Protection Division declared plans to initiate criminal proceedings against Vemma after issuing consumer alerts about the company’s business practices in August 2014.

Shutdown by FTC

On August 21, 2015, the U.S. Federal Trade Commission initiated legal action against Vemma by freezing its assets and seeking restitution for consumers. The FTC charged that Vemma operated as a pyramid scheme while exaggerating potential earnings and that the Boreyko family had improperly established multiple entities sharing personnel and financial resources. The court issued a temporary restraining order set to expire within fourteen days unless extended. Defendants included CEO Benson Boreyko, distributor Tom Alkazin, and the company itself.

On September 18, 2015, the court determined Vemma was functioning as a pyramid scheme employing deceptive marketing tactics. A monitor was appointed to supervise the company’s activities and normal operations were prohibited.

Penalty

In September 2016, Vemma reached a settlement agreement with the FTC. Vemma Nutrition Company along with CEO Benson Boreyko, Tom Alkazin, and Bethany Alkazin consented to a permanent injunction coupled with financial penalties.

The company was ordered to pay $238 million USD in fines, overhaul its compensation program, and relinquish specified assets. The Alkazins faced individual fines totaling $6.7 million USD. All defendants were barred from participating in any pyramid schemes, Ponzi schemes, or chain marketing ventures. The successor entity led by the Boreykos, Bodē Pro, requires that most sales be made directly to outside customers to prevent classification as a pyramid scheme.