Plaintiffs File First Amended Complaint Against Herbalife, Newest Way to Wealth
Plaintiffs in the lawsuit against Herbalife and its "lead generation system" (LGS), Newest Way to Wealth (NWTW) have filed a First Amended Complaint. This complaint sets forth more clearly the connection between Herbalife, Inc. and NWTW and its distributors.
According to the complaint, Herbalife encouraged the creations of the LGS as part of its marketing plan in the US. The company's numbers had been falling here.
The plaintiffs allege that Herbalife helped create the LGS, including NWTW, for three primary reasons:
"In fact, the use of Lead Generation Systems was consciously intended by Herbalife and its senior distributors (a) to permit senior distributors to use more aggressive promotional materials and methods than those previously utilized and approved by Herbalife; (b) to provide Herbalife with a plausible defense (i.e., the "over zealous distributor" defense) in the event of regulatory problems. . . and (c) to enable senior distributors to supplement their income through the sale of promotional materials to their downlines, and thereby provide an additional incentive for senior distributors to remain with Herbalife.
"In effect, Herbalife unleashed its senior distributors and expressly and tacitly directed and encouraged them to use deceptive and coercive techniques to recruit new distributors."
Herbalife participated in the LGS, according to the complaint, by consulting with NWTW's top distributors, and by giving prominent roles and publicity to those top distributors.
Plaintiffs accuse NWTW and Herbalife of
- wire and mail fraud
- racketeering
- fraud and deceipt
- operating an illegal pyramid scheme
- running an endless chain scheme under California law
- violation of California Seller-Assisted Marketing Scheme Law
- deceptive business practices
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