Published on : Aug 27, 2015
Vemma Nutrition, which is a Tempe based energy drink company has been temporarily shut down on account of running a pyramid scheme. In accordance with the scheme, the company promised riches to college students to sell its nutritional drinks, but, most of the students ended up losing money.
As per the consumer protection agency of The Federal Trade Commission, Vemma convinced recruits to possibly make as much as US$50,000 every week if they sold its nutritional beverage Vemma, protein shake Bod-e, or energy drink Verge.
The recruits had to make initial investment of US$600 for business tools and products and every month had to buy Vemma products worth US$150 to receive bonuses. As per the Federal Trade Commission, Vemma provided meager help to recruits to sell its products and instead were rewarded for recruiting more people.
According to the Federal Trade Commission, Vemma earned US$ 200 million both in 2013 and 2014. However, Vemma representative did not immediately respond to this comment.
The company’s assets have been temporarily seized by the federal court in Arizona. Due to this, Vemma products are not available from the website at this time.
According to the complaint made by The Federal Trade Commission, Vemma employees made visits at college campuses to attract them to sell their beverages as an alternative to a regular job. The marketing material of the company highlights young people in luxury cars, yachts, and jets.
Two stars from the ‘Extreme Weight Loss’, an ABC reality show Chris and Heidi Powell appear in packaging and promotional videos of the Bod-e. However, representatives of ABC and the Powells did not immediately respond on a request for comment.
With the company, the CEO of Vemma Benson Boreyko, promoter Tom Alkazin and his spouse Bethany Alkazin have also been named as defendant in the complaint.