Former Participants File Class Action Lawsuit Against Herbalife and its "Newest Way To Wealth" Organization
February 26, 2002
A former Herbalife participant, who was part of the "Newest Way To Wealth" (NWTW) system, is leading a class action lawsuit against the company and a number of its kingpin leaders. The suit was filed on February 19, 2002. Defendants include:
- Herbalife International, Inc.
- Herbalife International of America, Inc.
- Dream Builders & Associates International, Inc.
- HB International Group, Inc.
- Anthony Powell
- Doran Andry
- Craig M. Tsutakawa
- Caroline Tsutakawa
- Tarun Juneja
- John Beall
- Brett Bartholomew
- Leah Graham
- Stephen Combs and
- Deborah Combs
- Herbalife International of America, Inc.
The suit claims that Herbalife had full knowledge of the plaintiffs' acitivities, but did nothing to curb the NWTW, and its associated illegalities. NWTW is described as
"an internet mail-order based system purportedly designed to have an Herbalife distributor instantly achieve "Supervisor" status under the Herbalife compensation structure and to achieve '$20,000 in business every single month. . . within 30 to 90 days.' "
The plaintiffs claim that the NWTW system turns Herbalife's network marketing program into an illegal pyramid scheme.
Defendants are charged with
- racketeering
- fraud
- wire and mail fraud
- operating an endless chain scheme
- violation of California's Seller Assisted Marketing Plans Law, and
- unlawful and deceptive business practices.
Herbalife is no stranger to distributor lawsuits. In 1997, Mary Fallow, her husband Dan, and stepson Clint won a significant settlement after they accused the company of breaching contracts and failing to follow its own rules.
Within the past two years, Herbalife has faced a number of difficulties. On May 24, 2000, charismatic company founder Mark Hughes died of a drug overdose. Last fall, stockholder dissatisfaction led to the possibility that the company might be sold. And on February 15, 2002, the state of Wisconsin announced that it is investigating Herbalife and NWTW as well.
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