The 'Herbalife' racket faces limited investigation in Canada.

The following article, by Michelle Celarier, was published in the New York Post, Jan 28th, 2014.

Canada’s top consumer regulator has launched a formal inquiry into pyramid scheme complaints made against Herbalife, The Post has learned.

The inquiry by the Canadian Competition Bureau is tied, in part, to consumer complaints it has received about the controversial Los Angeles-based diet shake seller, sources familiar with the inquiry said.

The Competition Bureau has also interviewed former Herbalife insiders and distributors who believe the company is a pyramid, sources said.

Once a formal inquiry has started, the CCB can apply for “information gathering orders,” one source said.

The Competition Bureau, which is similar in scope to the US Federal Trade Commission — except it can bring criminal charges – declined to comment.

Herbalife did not return emails seeking comment sent Monday afternoon. In the past, the company has said it operates legally.

In addition to complaining about Herbalife itself, an unknown number of Canadians have also contacted the regulator and lambasted several distributors for pyramid activities such as making false income claims, sources said.

Those who were the focus of the complaints include former top Herbalife distributor Shawn Dahl and Online Business Systems, an Internet recruiting system run by Dahl to bring people in as Herbalife distributors, these sources added.

It is not known if Dahl or other distributors are the focus of the inquiry as well, sources said. Dahl did not return a call for comment.

Online Business Systems, also run by Dahl’s wife, Nicole, has taken the place of Global Online Systems, which shut down 10 years ago as the company was criminally convicted in 2004 of breaching the Canadian Competition Act governing multi-level marketing plans and pyramid sales.

The company’s registered directors and Herbalife distributors, Nicole’s mother, Deborah Stoltz, and her aunt, Marilyn Thom, shut down that company, were ordered to pay a $150,000 fine and were prohibited from engaging in pyramid activities.

Stoltz continued to be a money-making Herbalife distributor, a member of the President’s Club, a title reserved for high-sellers, as recently as 2013, according to Herbalife documents.

Stoltz, just prior to the prohibition order, appears to have helped transition Global Online Systems to Online Business Systems, according to Internet screen shots from both companies’ web sites site at that time that show how the company helped clients move their account from one company to the other.

It is possible that the current inquiry is believed to be looking at the possible violation of the existing prohibition order, said a source familiar with the investigation, who added that the inquiry is also “much broader.”

Stoltz and Thom could not be reached.

Under the Dahls, Online Business Systems grew to be much bigger than its shuttered predecessor. It was approved by Herbalife as a so-called business methods company for its distributors, a company memo shows.

The Dahls became the poster couple for Herbalife. The attractive pair appeared on the cover of the company’s magazine, “Herbalife Today,” in 2009, when they reached the coveted Chairman’s Club, a ranking that only the top 50 out of 3.2 million distributors reach.

In videos extolling their upscale Herbalife lifestyle in a suburb of Vancouver, Canada, called White Rock — a picturesque bayside town surrounded by snow-capped mountains — Dahl talked about the inspirational role Nicole’s mother had played in his decision to join Herbalife.

Dahl said his mother-in-law was making $30,000 per month when he joined Herbalife — but he made no mention of her company’s criminal conviction years earlier.

Herbalife CEO Michael Johnson praised the Dahls’ work at Online Business Systems as recently as 2010. But Herbalife began to distance itself from Dahl and Online Business Systems soon after hedge fund activist Bill Ackman launched a $1 billion short against the company and claimed it is a pyramid scheme.

Herbalife has denied it is a pyramid scheme.

Ackman also shone a light on the so-called lead generation practices of companies like Online Business Systems. Among other practices, Online Business Systems sold to new Herbalife distributors for as much as $100 a pop the names of people who signed up for Herbalife’s business opportunity, sources said.

Most of the leads were worthless, distributors told The Post last year.

Under scrutiny, Herbalife finally severed its relationship with the Dahls and Online Business Systems. Shawn Dahl left Herbalife at the end of the June, as The Post exclusively reported at the time.

http://nypost.com/2014/01/28/canadian-regulator-probing-herbalife/

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When the wider picture is examined, we discover that, yet again, these events in Canada form part of an overall pattern of ongoing major racketeering activity, stretching back decades. 

Once you know how blame-the-victim 'MLM income opportunity' rackets function, as a series of interrelated frauds operated behind apparently independent corporate structures, it becomes possible to predict (with almost total accuracy), what the response of their bosses will be, to any isolated investigation. 

In fact, in the case of 'Herbalife,' this is exactly what I did, last year.

In the past, when faced with persistent accusations of fraud, and/or cultism, and the possibility of criminal investigation, the bosses of  various 'MLM income opportunity' rackets have publicly fingered, and then excommunicated, their own junior partners in crime, whilst steadfastly pretending that they were not only completely innocent of any wrongdoing themselves, but also completely unaware that any unlawful activities had been occurring within the ranks of their organizations.

David Brear (copyright 2013)

As long ago as the 1980s, the bosses of the 'Amway' mob successfully dodged criminal investigation in France, when 'admired and respected Diamond Distributor,' Jean Godzich, was air-brushed out of the fairy story for 'breaking Amway's Code of Ethics.' This was after widespread French media accusations that 'Amway' had been hiding both a pyramid fraud and a form of cult. For years prior to these dramatic events, Godzich had, in fact, been allowed to peddle many millions of dollars of effectively-valueless publications, recordings, tickets to meetings, etc. on the fraudulent pretext that these 'optional training materials' contained secrets vital to achieving success in 'Amway' and 'Total Financial Freedom.' After this public excommunication, the 'Amway' racket virtually vanished in France, enabling Godzich to use his former 'Amway Network' as the launching pad for a copy-cat 'MLM income opportunity' racket, operated behind a new (apparently independent) corporate labyrinth known as 'le Groupement (GEPM).' It took a further 10 years, and at least 300 000 more French 'MLM' victims, before Godzich (who was facing a new criminal investigation) finally ran away to the USA taking several $ millions (stolen from his, now bankrupt, 'GEPM' front company) with him. 

An international arrest warrant (issued in 2010) is still apparently outstanding for Jean Godzich who, during his 'Amway' and 'Groupement' years, was closely linked to 'Amway's top earning Distributor',Dexter Yager (pictured above) via Doug Wead.

As recently as 2007, the bosses of the 'Amway' mob again successfully dodged criminal investigation, this time in the UK, when various 'admired and respected Diamond Distributors', including Jerry and Mandy Scriven (pictured above), were air brushed out of the fairy story for again peddling hundreds of millions of dollars of what 'Amway UK's' corporate officers now described as unapproved 'training materials' or 'tools.' Since the 1980s, the Scrivens had also been closely-linked to Dexter Yager and his labyrinth of front companies known as, 'International Business Systems.' Subsequently, a corporate officer of 'Amway UK Ltd.,' committed perjury when she submitted a false deposition to the UK High Court in which she steadfastly pretended that the company had been completely unaware of the deceptive practises used by the company's top UK distributors.

http://www.jerryandmandy.co.uk/

After excommunication, the Scrivens created a website on which they openly stated that, at all times, they had acted with the full-knowledge, approval and even enthusiastic participation of the corporate officers of 'Amway' UK Ltd.' Amazingly, the Scrivens were neither charged with fraud themselves, nor called as prosecution witnesses, when the UK government tried, but failed, to bankrupt, and close,'Amway UK Ltd. in 2008. 

'Herbalife' boss, and world-class liar,  Michael Johnson.

Thus, Shawn Dahl's 'Online Business Systems (OBS)' was a typical corporate front, or 'Network,' used not only to recruit 'MLM Income Opportunity' victims, but also to prevent, and/or divert investigation, and isolate the bosses of the 'Herbalife' racket from liability. Indeed, for years, the criminal activities of the ostensible bosses of 'OBS,' brought in fortunes for the the bosses of 'Herbalife.' Obviously, at all times, the corporate officers of 'OBS' acted with the full-knowledge, approval and even enthusiastic participation of the corporate officers of 'Herbalife'

'OBS' had previously been known as 'Global Online Systems (GOS)' - a company judged to be a criminal 'scheme of pyramid selling' by a Canadian federal court in 2004. However, both these (apparently independent) corporate structures have in fact, merely been constituent parts of an overall pattern of ongoing major racketeering activity. This classic Mafia-style system has been used to perpetrate various advance fee frauds linked to the closed-market swindle operated behind the fake 'direct selling' company known as 'Herbalife.'

'GOS' appeared to be independently operated by Deborah Stoltz and her sister Marilyn Thom. Yet, the 2004 Canadian judgement required these corporate officers to reform their previously unlawful 'business practices,' and to make full disclosures about how much money the company had been taking from Canadian 'Herbalife' adherents by peddling them publications, recordings, tickets to meeting, 'leads' (i.e. the  names of alleged potential recruits), etc.

Shawn Dahl, Deborah Stolz (left)

In 2004, the corporate officers of 'GOS' were also required to notify all their 'customer's' of the company's criminal conviction. However, before the ruling was announced,  the activities of 'GOS,' were transferred to a copy-cat corporate structure, 'OBS,' ostensibly run by Nicole Dahl (the daughter of Ms. Stoltz) and her husband, Shawn Dahl.

Propaganda websites previously operated by the bosses of 'GOS,' were simply re-labelled 'OBS.' One website persuaded 'GOS' adherents to register with 'OBS' and openly admitted that they would remain in the same 'network:' 

'Your Herbalife lineage remains the same regardless of the changes to your new marketing system.'

The previous members of 'GOS network' became part of the Dahl’s own 'Herbalife network', immediately promoting the couple in the elite group of 50 exemplary shills in the so-called 'Chairman’s Club.' However, Ms. Stoltz and Ms. Thom also continued to be shills.

At the time, the 'Herbalife' Ministry of Truth described these events as: 

'the company's 350-strong global distributor business practices and compliance team taking pro-active and responsive measures to identify, research, and address each and every infraction of Herbalife’s distributor rules and applicable regulation and law.'

In reality, faced with possible criminal investigation, the bosses of the 'Herbalife' racket were merely distancing themselves from the criminal activities lurking behind 'GOS' and 'OBS.'

This prompted Mr. Dahl to abandon 'Herbalife'  for another 'MLM Income Opportunity' racket where he could continue the profitable activity of peddling so-called 'leads.'

'Herbalife' subsequently, announced that it had 'banned the sale of leads to or by distributors entirely.' 

Then, it was suddenly announced by 'Herbalife' boss, Michael Johnson, that his 'direct selling' company's top-earning 'salesman', John Peterson, had died in a tragic 'accident,' 

At this point, I was immediately asked if I thought he could have been murdered? The same enquirer also asked me (in all seriousness) how many more people do I think will have to die, before the FBI investigates 'Herbalife?'

Expendable 'Herbalife' under-boss, John Peterson.

http://www.nypost.com/p/news/business/death_of_dream_HjMELCEfcyEJiGXxP9PN4N

For those readers who don't yet know, last year, John Peterson's corpse was found slumped in a Ford pickup truck at his trophy-home in the upscale ski resort of Steamboat Springs, Colorado.

Although the 'Herbalife' Ministry of Truth initially said that Peterson's death was an accident,  soon afterwards, the Steamboat Springs Sheriff's office informed the press that 'Herbalife's' top salesman appeared to have committed suicide via a single gun shot to the head. However, this explanation is by no means definitive, whilst 'Herbalife' now says it can't comment .

Thirteen years ago, the original author of the 'Herbalife' fairy story, Mark Reynolds Hughes, was also found dead in his trophy-home, in very mysterious circumstances. The background to Hughes sudden death (http://articles.latimes.com/2000/may/22/local/me-32795), should have placed the dark scenario that he was the target of a Mafia-style hit (made to look like a suicide or tragic accident), very high on the list of possible explanations, but this doesn't seem to have been fully-investigated  

 

Behind the 'Herbalife' fairy story, and all his impressive-sounding (made-up) 'Herbalife' ranks and titles, John Peterson (1955-2013) was only one of the organization's expendable under-bosses. For years, he was constantly presented in the reality-inverting 'Herbalife' propaganda as an exemplary role-model of limitless 'MLM' prosperity, happiness and freedom - earning $millions annually from commissions on the sales of products by 200 thousands 'Distributors' automatically-multiplying beneath him in the organization. 

In the adult world of quantifiable reality, Peterson was a typically-excited, and avuncular, motor-mouthed shill dressed up as a businessman. It almost goes without saying that he was yet another (otherwise-mediocre) little, grinning charlatan play-acting the unoriginal comic-book role of ordinary poor working man: turned multi-millionaire 'MLM' superman (admired by men and desired by women) who was prepared to share his miraculous secret knowledge with anyone (for a price).

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http://scams.wikispaces.com/Three+Card+Monte

N.B.   'Shill' or 'Schill' (a.k.a. 'Outside Man'), is American slang for one of a crew of charlatans who is used to lure victims into frauds, particular rigged gambling games, by appearing to be an ordinary everyday guy in the crowd who keeps winning. In the classic sleight-of-hand scam known as, the 'Shell Game', (a.k.a. 'Three Card Monte', 'Three Card Trick', 'Three Card Molly', 'Chase The Lady', 'Chase The Ace', etc.), victims are deceived into believing that the game is genuine and anyone can win, by the use of innocent-looking shills, often with highly-distracting females on their arms. In the end, no victim can win, because they are up against a team of experienced criminals who all act-out a carefully-scripted, reality-inverting scenario. If a losing victim begins to challenge the honesty of the front man 'Handler' (a.k.a. 'Tosser'), other muscle-bound criminals, also pretending to be ordinary members of the crowd,will falsely-accuse the victim of cheating, kick over the table, start a fight or an argument, etc., all these are distractions created just to enable the 'Tosser' to run away with the money. Complaining-victims can also be silenced by telling them that they cannot go to the police, because they were breaking the law by gambling in the street.

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So, to get back to the question of whether I think Peterson was murdered?

At this point, I don't actually know, but I have to say that (in my not so humble opinion) the background to Peterson's sudden death, places the dark scenario that he was the target of a Mafia-style hit (made to look like a suicide or accident), very high on the list of possible explanations.  

• Despite thoughtless media reports, currently, no solid evidence has been produced proving that Peterson, or indeed any other Shill, had/has made one cent of overall net-profit out of his so-called 'Herbalife Direct Sales Business.'
• Similarly, despite thoughtless media reports, no solid evidence has been produced to prove that Peterson, or indeed any other shill, had/has ever sold anything directly to the general public other than the profitable lie that anyone can become financially-free by duplicating a proven business building plan to buy a fixed quota of 'Herbalife' products each month,  whilst recruiting other persons to duplicate the same plan of recruitment and self-consumption, etc., ad infinitum.
• Due to the fact that they have to keep acquiring, and flaunting, the kitsch trappings of wealth(trophy: cars,  helicopters, planes, yachts, houses, wives, etc.), 'MLM' shills like Peterson invariably turn out to be living the lie that they are financially free, when they are actually up to their eyeballs in a sea of mounting debts.
• The 'Herbalife' front-company is currently the subject of a monumental short-selling battle on Wall St. between Bill Ackman and Carl Icahn (who reportedly made half a billion dollars by supporting Michael Johnson's 'Herbalife' fairy story, thus, temporarily re-inflating the front company's previously-deflating share value).
• 'Herbalife' is the effectively-valueless corporate-front for an ongoing major organized crime group hiding a blame-the-victim closed-market swindle (dressed up as a 'lawful income opportunity') and related advance fee frauds (dressed up as 'optional training and motivation programs').
• Since the 1980s, Peterson had been one of the criminals operating the related advance fee frauds lurking behind 'Herbalife.'
• Peterson expanded the 'Herbalife' racket in Mexico.
• Due to mounting concerns about 'Herbalife' deliberately targeting members of America's Hispanic community (including illegal immigrants), the front company has recently drawn the attention of Hispanic members of the US Congress

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http://www.shortzilla.com/herbalife-and-the-deceptive-business-practices-of-its-distributors/

N.B. In recent years, the thought-stopping term 'selling leads,' has been widely-used by 'MLM income opportunity' racketeers to hide a related-fraud in which shills have been used to steal countless millions of dollars by steadfastly pretending that one of the secrets of their own success, is they have access to 'computer software' which can 'generate endless lists of interested-prospects' who are all willing to sign up,and that they are willing to share this miraculous, perpetual, money-making technology with anyone (for a price).

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http://shawndahlexposed.com/

• For many years, Peterson, and various criminal associates (including excommunicated'Herbalife' schill, Shawn Dahl), had been peddling so-called 'leads.'
• In 2013, the 'Herbalife' bosses suddenly announced that they had banned the sale of 'blind leads' in their organization (because of a string of complaints to the US Federal Trade Commission http://www.ftc.gov/foia/frequentrequests/1301herbalifecmpts.pdf ), effectively cutting Peterson off from one of his main sources of income.
• The 'Herbalife' bosses have steadfastly pretended to have been previously unaware of the deceptive practise of 'selling leads.'
• Had Peterson been persuaded to tell the truth to law enforcement agents and prosecutors (i.e. that he had at all times been acting with the full knowledge, approval and enthusiastic participation of the corporate officers of 'Herbalife'), he could have brought about the collapse of not only the 'Herbalife' racket, but also the entire phenomenon of  'MLM Income Opportunity' racketeering.

David Brear (copyright 2014)