Wednesday, 29 June 2011

'XanGo' and 'Tahitian Noni Juice' are 'MLM business opportunity' rackets

One 'Amway' copy-cat 'MLM business opportunity' racket, 'Speakasiaonline', faces closure in India, but many more are queuing up to cheat ill-informed and vulnerable Indians
Since its initiation in post WWII America, the 'MLM' racket has come full-circle.
Around 60 years ago in California, the original 'MLM' racketeer, Carl F. Rehnborg (a former toothpaste salesman suffering from delusions of grandeur), hid a closed-market swindle behind what he called 'Nutrilite Double X Health Tonic.'  This classiceffectively-unsaleable 'MLM' wampum comprised inert, coloured pills packaged to resemble a banal proprietary medicine. Rehnborg, in fact, peddled his victims, whom he called 'distributors,' a placebo made largely from harmless vegetable extracts costing a few cents, for just under $20 (the equivalent of several hundreds dollars today) per pack. Although Rehnborg made no specific therapeutic claims on its packaging, his victims were bombarded with separate propaganda which told them that 'Nutrilite' was good value, because it could cure or prevent any known human illness. They were also told that they could achieve total financial freedom by handing over around $20 each month and by recruiting more 'distributors' who would then recruit more distributors, etc. ad infinitum. When, in the late 1950s, the 'Nutrilite' racket finally faced closure for breaking US federal laws concerning the misbranding of medicines, two young 'Nutrilite ' under-bosses, Richard DeVos and Jay Van Andel, created the 'Amway' racket in which they cleverly avoided regulation by the US Food and Drug Admistration by peddling banal, but grossly over-priced, household products to the victims of the identical, dissimulated closed-market swindle. What remained of the 'Nutrilite' racket was absorbed into the 'Amway' racket in the early 1970s.  
Today, various 'MLM business opportunity' racketeers are hiding closed-market swindles behind what they call 'anti-oxidant health drinks.' This classic, effectively-unsaleable 'MLM' wampum comprises common substances packaged to resemble banal alternative medicines. The racketeers peddle their victims, whom they call 'distributors,' a placebo made largely from cheaply-procured fruit juices, for around $40 per pack. Many of these crooks have made specific therapeutic claims on their packaging, and their victims are bombarded with additional propaganda which tells them that 'anti-oxidant health drinks' are good value, because they can cure or prevent any known human illness (particularly, arthritis and cancer). Victims are also told that they can achieve total financial freedom by handing over their cash each month and by recruiting more 'distributors' who will then recruit more distributors, etc. ad infinitum. Various 'MLM health drink' racketeers have already been pursued in the US courts for breaking federal and State legislation concerning the misbranding of medicines and foodstuffs, but mysteriously, they have never been charged with criminal fraud or racketeering.
Two of the largest, US-based, 'MLM health drink' rackets are: 'Tahitian Noni International' and 'XanGo LLC International' . Interestingly, the 'MLM business opportunity' racketeers Doug Wead and Jean Godzich, both of whom have previously been associated with the bosses of  the 'Amway' mob (particularly, Dexter Yager), are currently involved with the 'Xango' racket. . 
Meanwhile in the adult world of quantifiable reality: In  2006, the United States Food and Drug Administration issued a warning to 'XanGo LLC International' in response to the company's promotion of 'Xango Mangosteen juice' as an aid to treat, and/or cure, various diseases. The agency's letter warned that 'Xango juice' had not been properly tested for safety and efficacy, and as a proposed new drug it could not be legally sold in the US without prior approval of the FDA, and that the company could face enforcement action including seizure, and/or injunction, of products or suspension of business. Under FDA drug labeling rules, 'XanGo LLC,' as manufacturer, is responsible for satisfying scientific criteria to make health claims on its product labels and all marketing materials. As of September 2008, the case remains open. In 2005, the Mayo Clinic said that 'there are no published clinical trials showing evidence that either the fruit or its juice, marketed under the name 'XanGo' juice, is an effective treatment for arthritis, cancer or any other disorder in humans. In 2006, the U.C. Berkeley Wellness Newsletter, sponsored by the University of California at Berkeley, said that 'Mangosteen juice marketers make far-fetched and unsubstantiated claims for their products.' The newsletter observed that 'there are no clinical trials, and what happens in a test tube or animal may not occur in a human. Any reported benefits in humans have been anecdotal. No one even knows if the processed fruit juice and capsules retain the potentially beneficial compounds. What’s more, the juice is typically a mix of fruit juices with an undisclosed amount of mangosteen in it.' Dr. Ralph Moss, author of several books on cancer research, has said of mangosteen juice:
'In my opinion, what we have here is simply an overpriced fruit drink. Fruit drinks are often healthful beverages. But the only reason I can see that the promoters of mangosteen can get away with charging $37 for this product is that they are playing on patients' hopes and fears in a cynical way. Without the health claims, open or implied, the product could only be sold for at most $5 or $6 (which, for example, is the cost of antioxidant-rich pomegranate juice).'
Amazingly, essentially the same warnings were issued by the FDA in the early 1950s to the owner of 'Nutrilite,' and similar commentaries were made by independent, medically-qualified observers. Yet for more than half a century, countless, pernicious copy-cat 'MLM business opportunity' frauds have remained effectively-unregulated in the USA, whilst their bosses have been allowed expand their criminal activities around the globe and to acquire capital sums which place them alongside the most notorious racketeers in history.
David Brear (copyright 2011)


SPEEDMktg said...

Your venomous reaction detracts from the real issue. While the MLM industry has been fraught with snake-oil, the model itself is not the problem. It is unfair to throw out the baby with the bathwater. In the case of Xango, MonaVie, Noni and the other various me-too juice companies, the claims made by distributors are not based in science. Some of the evidence is anecdotal and some is simply gross distortion and blatant lies. I don't have a medical opinion about the products as I'm not a doctor. I'd also value my personal experience with a product with at least as much weight as scientific dispersion. I would advise a caveat emptor approach to any business and would avoid companies and products that did not reflect my values.

Shyam Sundar said...

It is sad that the rational reaction seemed venomous to you. Do you know how the MLM has been eating away the vitals of our society.
Have you any idea what is mathematical impossibility?
Have you ever noticed how many crores of people lost their hard-earned money to the MLM racketeers?
Wake up from slumber. MLM is the real plague to our society. It is high time it is removed at an early date.

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