Alert #207: 6/10/2012

Inside Network Marketing Podcast is Back!
Fake MLM Gurus, Shorting Public MLM Companies, and Industry Trends Update

Inside Network Marketing Podcast
Yes, it’s been a while since my last podcast. Almost a year, actually. Unfortunately, being an industry advocate, watchdog, guru, or what ever you want to call it, doesn’t pay well. Actually, it doesn’t pay at all, so I’ve been focusing on keeping the lights on, gas in my Jag, and a supply of Marie Calendars frozen dinners in the fridge. But there’s just too much I want to say that just isn’t getting said, so I’m back to whacking hornet’s nests again. Or, in the case of this latest episode, sacred cow tipping.
It’s funny, sort of, that a few weeks back I was the victim of a home invasion. A guy actually kicked through my very large, thick front door. It took him about 8 or 9 attempts, and I remember the first thing I thought as the battering ramming began was, okay, who did I piss off now? As it turns out, he was just a low life looking to steal my stuff. Because I ignored his incessant doorbell and knocking concerto (he didn’t know the secret doorbell code that only my friends and family know) I suspect he didn’t even know I was home. When he made it through, all I had to do was make him aware of my Glock to turn him into a Roadrunner exit (big cloud with the word “Poof” in the middle of it). Since I was already on the line with 911 (a recording of which I’m getting a copy of), he didn’t make it far before the good guys got him. It was like watching an episode of C.O.P.S. in hi-def 3D.  
Anyway, maybe it’s because I’m now over half-a-century old, but I just don’t seem to care as much about how many people like me, or how much. I’ve been involved with this business, full time, for over 21 years now, and I’m just… so… tired… of the BS. Not just of the BS that’s slung at us from ignorant outsiders, which no one seems to want to do anything about, but more so of the BS that keeps bubbling up from within this business. Don’t get me wrong, I love network marketing. I love it like I loved Tribble, my champion purebred Persian, inbred, likely brain damaged cat that never used the litter box even once in her 13 years of life. There are some people and companies in this industry that really need a metaphorical whack with a rolled up newspaper. I’d love to do this in a gentle, tactful way, but I just can’t seem to figure out how to do that, and I don’t believe reading How to Win Friends and Influence People a fourth time is going to help.
In this latest edition of Inside Network Marketing (#18) I’ll be discussing David Einhorn, Barry Minkow, and the practice of shorting public MLM companies, like Herbalife and USANA. Then the fun really begins with a relatively restrained rant regarding fake M.L.M. gurus and how we all should be vetting our industry leaders – which we don’t seem to be doing at all.
So here you go. Let the flaming begin.
Industry Trends Update

At the beginning of every month the Industry Trends page at is updated HERE. Here’s some key results from this latest update:
1. Although the ratio of pro-MLM commentary to con rose slightly, from 1.93 to 1.96, the overall online chatter about M.L.M. dropped 5%.
2. Although M.L.M. stocks have outperformed the overall market over the past 12 months (10.59% to 2.66%), May broke a four month M.L.M. winning streak vs. the S&P 500, which dropped 8.6% from April. The M.L.M. Index dropped 19.2%.
3. The number of visitors to the Wikipedia entry for “Multilevel Marketing” and “MLM” in May was 62,644, the fourth largest on record. The highest was 66,656 in January of 2011. This is not necessarily a good thing considering a small but diligent contingent of anti-MLM Wiki editors now control this listing, thus it is no longer a fair and neutral representation of our profession.
Thanks for listening.
Len Clements 
Founder & CEO 
MarketWave, Inc.

Alert #198: 10/10/2011

FDA Draft Guidance for Supplement Industry
The MLM Sky is Still Not Falling!

Us Baby Boomers, and what ever they call those that came the generation before us (Gen W?) will surely remember the story of Chicken Little (a.k.a Henny Penny; Chicken Licken), who tried desperately to inform all who would listen that the world was ending. His hysterical exclamation “The sky is falling!” has become, as defined by the character’s Wiki page, a “common idiom indicating a hysterical or mistaken belief that disaster is imminent.”

There seems to be a lot of Chicken Littles within our industry, and the dietary supplement industry as well. About once a year now, on average, we’re told the falling of the sky is imminent, and either the dietary supplement segment, or the MLM industry as a whole, is doomed. Unless, of course, we all rally behind those heroes attempting to save our profession. In some cases we’ve even been asked to send them our cash so they can afford to better fight those deep pocketed bureaucrat devils.

And then, time and time again, the sky stays right where it is.

The biggest peeve I have with these Chicken Littles who keep crying wolf is that it tends to make so many of us lame ducks. Why would anyone want to join, or encourage others to join, a profession that supposedly is about to be “devastated”? How can any distributor get excited, and committed, to an industry that, allegedly, keeps coming under attack by “jack booted government thugs” who are going to “beat down your door”? These are actual quotes from well respected industry leaders. Shouldn’t they be trying toincrease recruiting and decrease attrition?

I would understand if these warnings had any merit, but… well, it would take about seven pages to make my case why they don’t. So rather than give all your spam filters seven more pages of excuses to flag this Alert, I’ve attached it as a PDF here:

I’ll also be discussing this topic live on a future ANMP training call as well as’s inaugural “OnAir with Keeper” internet broadcast on Monday, November 1st, at 4:00 pm PST (7:00 EST).

Thanks for listening.

Len Clements
Founder & CEO
MarketWave, Inc.

P.S. If you have had any experience with any of the speakers, trainers or consultants listing at can you please log in and post a rating? Testimonials are optional but encouraged. I’m about to begin a major media blitz directed towards and would greatly appreciate your help in filling out the content. Thanks.

Alert #193: 9/7/2011

Industry Trends a Mixed Bag

Some suggest our industry is a mixed bag in itself that’s full of beans, nuts, corn and cheese, all with a sugar coating. They’re a small minority, but they are prolific – and five of they’re websites still appear in the top 15 Google search results for the term “MLM”. Of course, their sites are a bag of nothing but sour grapes, picked cherries, and bovine guano, puffed out with hot air to make it appear fuller. But the good news is, that’s fewer than there were last month. Over all there were 80 pro M.L.M. sites in the top 100 search results the first day of August, and there were 86 on September 1st, with anti-MLM sites in the top 100 down from 11 to 9  (the rest were neutral or irrelevant).

You can view the “Industry Trends” page here:  
The overall amount of online chatter related to MLM (pro and con) continued to rise another 7.7%, as it has in 10 of the last 12 months. The ratio of pro to con references rose 4.8% to 1.971. Although this ratio has risen slightly in three of the last five months, it’s still well below the record of 2.395 set exactly one year ago.
The total number of search results for the term MLM+(scam or pyramid) is trending down overall, with a slight uptick this month. This search resulted in 18.21 million hits on June 3rd, and 13.94 million on September 1st. However, this could be the result of the waning popularity (finally!) in the bait-and-switch tactic of using “Scam” in the title of pro-MLM prospecting sites.
On a negative note, the Wiki entry for “Multi-level Marketing”, which perpetually holds the #2 spot on Google searches for the same term as well as the acronym “MLM”, is still controlled by anti-MLM factions. Any attempt to make the listing neutral, or just balanced by adding references or rebuttal points to counter those added by, or linking to, well known MLM critics, is immediately deleted. Almost as if someone has been tasked with full time monitoring duties.
It’s upsetting that there are well over 10 million of us, and literally a dozen of these aggressive, some would argue obsessive, anti-MLM critics, yet their online commentary makes up a fourth, to sometimes as much as half, of the top 20 search results for “MLM”, and their editing of the Wiki entry so strongly influences its content.
But here’s the good news: Wall Street isn’t paying any attention to them. My “MLM Index” made up of the 12 largest MLM companies by market capitalization has outperformed the overall market for a fifth straight month with a 4.79% decline compared to an 8.38% decline of the S&P 500 Index (based on the index’s total share price compared to the price 90 days earlier). When the index price on the first of each month is compared to that same date one year earlier the “MLM Index” has outperformed the overall market for a 29th consecutive month by 14.04% to 11.49%. The average monthly gain over that stretch is 31.56% for the “MLM Index” – 144.9% higher than the overall market!
So sure, I’m biased. My trend data might be influenced, perhaps even subconsciously, by the fact I make my living from this business. But, apparently there are a few thousand other “trend analysts” out there that also seem to be pretty optimistic about the future of this industry.
Len Clements
Founder & CEO
MarketWave, Inc.

P.S. Keep a lookout over the next 24 hours for an Alert regarding the Breakthrough Telesummit, which I will be participating in as a contributor. It starts next weekend. Check it out HERE.

Alert #191: 8/30/2011

Amega WorldWide to Close in United States
Greatest Scientific Breakthrough in Human History
Not Enough to Keep Company Solvent

Although no public announcement has yet been made, Amega Worldwide has notified a select group of distributors by conference call that the United States division of Amega Global, LLC will be closing its operation as of August 31st, 2011. The reason given was that the parent company, based in Singapore, ordered the closure due to “insolvency”. Such a term is usually applied to a company that can no longer meet its financial obligations to its vendors and creditors.

I contacted Amega Worldwide President Marvin Higbee who confirmed all of the above. No further comment was provided as to what will become of the Amega distributor base and products in the United States.

Sam Adams, Amega’s Worldwide’s master distributor, and high profile distributor Jason Boreyko both resigned from Amega about six weeks ago.

Amega Worldwide will have existed exactly 19 months. Mr. Higbee was hired as President less than three months ago. Their CEO is Arun Kemer from Amega’s Singapore office.


To their credit Amega Worldwide (the U.S. operation which I will refer to as simply Amega from this point forward) did try some aggressive promotional tactics while under the leadership of Mr. Higbee, including an $8 enrollment special and significant product price reductions. But it appears to be too little too late.

Here’s what I don’t understand…

The parent company Amega Global has not only made no announcement of Amega’s pending closure, they still list an active U.S. entity and within the “News” section of their website the latest entry is the announcement of Marvin Higbee’s installment as the new Preisdent of Amega Worldwide. The U.S. website also makes no mention of a pending closure, and their calendar still lists ongoing events throughout the country. However, prospects have not been able to enroll online for the past several days ostensibly “Due to the transition to our new platform”. When I called Amega’s customer service line I listened to announcements about how to enroll while I was on hold – for 30 minutes before giving up.

This is only my theory, but I suspect Amega is holding back any public announcement until they can include who will be absorbing the U.S. distributor base. If they tip their hand too soon the Amega distributor base will quickly look like a Roadrunner exit – a big cloud with the word “Poof!” in the middle. Maakoa is the rumored suitor.
Here’s what I really don’t understand…

The AMWand is a stem of metal that closely resembles an expensive pen. It originally sold for $299.00, then was discounted to $273.60. Recently Amega added a “30% more powerful” version of the wand called “Black Tipped”, which did not have a black tip (the clip on the side was black). The distributor price was $313.20. These wands had BV-to-Wholesale ratios of 70% to as low as 56% (the percentage of the price that was actually commissionable). Amega also sells a variety of other pseudoscience based products, including a $363.00 pendant and a $119.00 “bio-energy” bracelet.

Within the wand are, allegedly, various minerals and crystals that have been altered in some mysterious, unidentified way by applying “AMized Fusion” technology. The result is the production of “zero point energy” (ZPE) that is emitted by a narrow beam that extends up to 30 meters (a few feet farther than the distance between home plate and first base on a standard baseball diamond). By subjecting cells to this ZPE it “reminds” them to “return to source”. That is, their original, pristine state. Therefore, according to Amega and it’s disciples, if you direct this beam of ZPE into someone’s head who has a headache, or into any point on their body where pain is occurring, the cells will be reminded to return to their undamaged state and the pain will go away. ZPE will also give you greater strength if you drink wanded water (or just point the wand at the right “chakra” or “meridian point” on the body), and will make plants grow larger and faster. According to some Amega reps, if you wand your gas tank you’re car will get better mileage. It will also make food taste a lot better. If you wave the wand around a lemon wedge, for example, it will taste sweet, not tart or sour. YouTube is loaded with videos of people, including Sam Adams, wanding a lemon wedge then having a subject take a bite out of it. Delicious, 100% of the time. The second unwanded wedge always results in a facial expression as bitter as we are to assume the lemon tasted.

By the way, the wand works best if you wave it in concentric circles, clockwise, for precisely 3-and-a-half rotations. Not four, not three. Three-and-a-half.

Although ZPE is technically theoretical, it is generally accepted even among legitimate quantum physicists to exist. ZPE is what everything is made up of when you can’t break it down to it’s component parts any further. That is, people are made up of cells, cells are made up of molecules, molecules are made up of atoms, which are made up of electrons, protons and neutrons, which are made up of quarks, which are made up of, finally, zero point energy. So in other words, every bit of matter in the universe is made up entirely of zero point energy.

So, wouldn’t zapping someone’s body with a beam of ZPE be kind of like shooting a squirt gun into the Pacific Ocean? You’re body is already completely made up of exactly the same thing the wand is supposedly introducing into it.

I have more questions besides this one.

Amega-folk love(ed) to cite testimonials from doctors and scientists that supported the wand (almost all of which were not medical doctors or quantum physicists). For example, Dr. David Pascal specifically declared that he knows “beyond doubt” that the wand is “contributing to cellular repair”. So this begs the question, why does it only contribute to repairing cells we can’t see? Why doesn’t zero point energy repair skin cells of burn victims or those with eczema, psoriasis or acne? Why doesn’t it reverse cataracts, or return the scalp cells of balding men back to “source”? In fact, the only demonstrations we are ever presented are subjective, where the subject rates their pain from 1 to 10, and the injury is internal where we must only assume “cellular repair” actually took place. This is somewhat similar to charlatans like Peter Popoff and Benny Hinn who routinely heal trick hips and bad backs, but who can never seem to find any clinically blind, quadriplegic or stage-4 cancer patients in their audience, in spite of the hundreds that attended.

It’s also interesting that virtually all of the doctors who endorsed the wand were chiropractors who, if the wand actually worked as they claimed, would be put out of business by it. But then, there was Dr. Robert DeMartino who assured his fellow chiropractors that the wand would not take business away from them. Why? Well, because even if a patient is getting adjustments to resolve pain issues, and the wand resolves their pain, they should tell their patients to keep coming in for adjustments anyway. Why would they want to do that if the wand, which allegedly has an unlimited shelf life, has resolved the problem?

If it is known that the beam of zero-point energy is laser thin and extends 30 meters (98.4 feet), there must be a way to measure it. According to a professor at the UNLV physics department, no such device exists that can even detect thepresence of zero-point energy emissions, let alone the strength, width and length of the beam. According to other online investigators, some of which have recorded their testing on YouTube, there is essentially nothing being emitted from the wand. No magnetism, no radiation, no ions, nothing.

Since Amega only wanted to demonstrate the wand’s efficacy with simple party tricks, rather than well constructed tests (let alone double-blinded clinical trials), I decided to perform them myself. Using an AMWand I acquired strictly for this purpose, I first performed the “Lemon Test” 18 times. But I did it a little differently. I thoroughly wanded one lemon wedge out of view of the subject, then brought in a plate with two lemon wedges on it. The subject was free to select which ever wedge they wanted for the first bite. The results were exactly as expected. Ten out of 18 (just one more than by random chance) picked the wanded lemon wedge by taste. However, the wanded wedge was the first one they tasted 9 of 18 times, and all 9 times they said that was the better tasting wedge. When they selected the unwanded wedge first it was the better tasting 8 out of 9 times. So what this test actually revealed is that the first wedge chosen was the better tasting one 17 of 18 times, regardless of wanding. This explains why Amega reps always wanded the first wedge that they handed to the subject. All the other tricks commonly used (pushing someone over, pushing their extended arm down, lifting someone with two fingers, etc.) are already well exposed online.

I tried the plant test. The wanded plant grew just as large, just as fast, as the non-wanded plant. I really wanted to conduct a number of pain reduction tests, with half using a placebo wand, but after much effort I could not find a single Amega distributor, nor anyone at Amega corporate, that was willing to allow me into an Amega demonstration meeting, no matter how favorable I made the conditions for them.

I also tested the wand on myself and several family members. While working in my yard I sucked in some debris which caused a very painful sinus infection. While still skeptical, I desperately wanted the wand to work! After wanding my nose for several minutes I went from a pain of about 8 to, about 8. Same with my mildly arthritic knees (don’t jog on hard surfaces, kids). No other family member experienced any benefit as well.

Of course, this all begs the ultimate question, if this were all true, why doesn’t Amega conduct their own well controlled clinical trials? Not only would this scientifically (rather than anecdotally) prove the wand really worked, it would surely elicit overwhelming media attention, and customer orders. Yet, even when facing “insolvency” Amega chose not to even try to provide such evidence, which could have been accomplished very quickly and inexpensively (I was willing to construct and perform the tests for free!). What’s more, Australian Skeptics, Inc. would have paid them $100,000 for such proof, and the James Randi Educational Foundation (JREF) would have awarded them $1 million! Yet, they never even applied (I confirmed with JREF that Amega’s claims “certainly fit the bill” as to what would qualify for their award).

Amega reps (although, to my knowledge, never corporate) often claimed the wand healed cancer and paralysis. For example, Brian Tracy’s throat cancer was resolved due, at least in part, to his use of the wand. When Tracy offers a numbered list all of the factors contributing to his complete recovery (prayer, “healing hands”, a tree bark tea, optimism, a proper diet, and the wand) he failed to include three other forms of treatment he received that might have contributed: Surgery, chemotherapy, and radiation! Brian Tracy, who I’m otherwise a big fan of, states he is often pitched to endorse or sell “unproven” products, and rejects them. No explanation is given as to why he made an exception here. Tracy claimed, in December of 2010, that Amega had exceeded “$100 million in 2010” and was growing “at 20 to 30 percent, per month”. I can only assume he was citing Amega’s worldwide sales, not Amega Worldwide’s sales.

Mark Victor Hansen, author of “Chicken Soup For The Soul”, was also an active proponent of the AMWand, as were the afore mentioned Sam Adams (co-founder of Matol) and Jason Boreyko (co-founder of New Vision). I know several others who are intelligent, rational people who had a lot of credibility at stake by endorsing Amega and its products and who seemed to, in most cases, genuinely believe in it. I was able to speak to some, including Mr. Adams, who were utterly incapable of addressing, or unwilling to address, any of my concerns or questions. In response to my request for testing assistance, Adams responded by voice message, “We don’t need any proof the wand works”, as if he thought I was performing the tests for the benefit of only Amega distributors. When I sent a list of questions to Amega corporate I received no response at all.

One of the saddest, if not disturbing, exhibitions of Amega wand power are the numerous online videos of people “healing” their sick or aging pets. In one video a man waves the wand over his old, disease riddled family dog and eventually he gets up and slowly walks around for a few seconds. In another vid a dog that appears to be simply sleeping, or lazy, gets a full body wand for over seven minutes, then gets up and walks away. A fish that looks sick is wanded for “several hours” each day for three days, then later appears healthy (and three times its original size). A horse with an injured left hoof is shown slightly limping around his pen. After being wanded he is shown – slightly limping around his pen. All videographers declared their animals healed by the wand. Amegites proclaimed this evidence that was not subject to the placebo effect. Although animals may not be prone to the placebo effect, their human observersabsolutely are. They make no room for simple concepts like, animals get sick and get well, just like humans do, or if you really, really, want to see your beloved animal not limping any more, that’s what you’ll see. Also, we have no idea how many wand enthusiasts wanded animals that did not improve, which would likely not be something they’d post on YouTube. That is, if 100 people wanded their sick dog and 5 of them got up and walked around a little (most likely because someone was waving a metal stick at them), those five videos are going online. The other 95 will hit the proverbial cutting room floor, giving theillusion to online viewers that the wand is effective 100% of the time. This is a similar tactic used by Uri Geller (a magician who claims he’s really doing magic) when, on a nationally televised show, he asked viewers to find a watch or clock that is not working, hold it tightly and rhythmically shake it slightly as you forcefully say “Work!” over and over. Out of likely a million or more viewers who participated, maybe a dozen will see the second hand now moving on their clock (a clock that has simply ran down will usually run for a few seconds if you shake it a little). These successes are asked to call the live show, and all the audience hears are one astonished clock owner after another praising the amazing powers of Uri Geller. The 999,988 who tossed their clocks back in the Yard Sale pile in their garage, and now feeling kind of dumb for even participating, never make the call – or get past the call screener.

Instead of demonstrating the miraculous powers of the wand on citrus fruits, old dogs or people with a headache, why didn’t Amega send free wands to stage four cancer sufferers who are under hospice care and have ceased all anti-cancer treatment? That way there would be no doubt what caused their cancer to go into remission, they could save thousands of lives and end tremendous suffering, and Amega would heroically be front page news all over the world. And there would be a multi-billion dollar bidding war among pharmaceutical companies for the rights to “AMized Fusion” technology, and hundreds of new jobs created to dig the ten mile deep hole for them to bury it in.

If Amega has discovered nothing more than a way to detect and measure zero point energy, it would be a Nobel Prize worthy accomplishment. The ability toharness and control zero point energy, let alone all the profound benefits attributed to it, would be tantamount to harnessing and controlling gravity. It would be the single greatest scientific breakthrough in human history. And there would be at least one double-blinded, clinical study to validate it.

And the company that was selling it would be able to pay their bills.

Len Clements
Founder & CEO
MarketWave, Inc.

Alert #188: 8/11/2011

Barry Minkow Hit with $584 Million Judgment
Five Year Prison Sentence  
Anti-MLM Critics Complicit in Fraudulent Scheme

Barry Minkow – Beneath the Iceberg

For those of you who are new to the profession of network marketing, or are experienced veterans who’ve been stranded on a deserted island the last four years, Barry Minkow started a fraudulent carpet cleaning and restoration company back in the 1980s called ZZZZ Best (pronounced Zee Best), went to prison for over seven years, found God, emerged from the Englewood Federal Correctional Institution corrected, and then turned from being a perpetrator of fraud to an investigator and exposer of it. Then, in 2006, another supposed ex-stock-fraud-felon-turned-good by the name of Sam Antar (his fraudulent company was called Crazy Eddie) paid Minkow $250,000 – $150,000 to attack Usana Health Sciences, and another $100,000 allegedly because Sam just admired Barry and wanted to give him a gift. Usana is publicly traded so, of course, both Sam and Barry bought put options on Usana right before Minkow published his 86 page Usana smear report so they could profit from the resulting drop in Usana’s share price – which plummeted 15% the day Minkow’s report went public. After banking $61,000 on his Usana puts, and watching how the media indubitably promoted his attack, and seeing how vulnerable a public M.L.M. company, or at least their stock value, was to bad publicity, he decided to try the same bash-n-cash scheme on Herbalife, PrePaid Legal, and Medifast. Each time Minkow would hire M.L.M. critics Robert FitzPatrick, who claims to be an “expert” on pyramid schemes, and Tracy Coenen, who claims to be a “forensic” CPA and “certified fraud examiner”, to assist him in the production of his stock price pounding propaganda.

Then he tried the same scheme on Lennar.

Lennar is the second largest home builder in the United States, with $3.1 billion in revenue last year. Lennar is also not an M.L.M. company, thus not nearly as vulnerable to prolonged attacks on their credibility. So, Lennar sued Minkow and his “Fraud Discovery Institute” accusing him of libel and stock fraud, and theydid not settle. And they won, thus the $584 million judgment. Along the way Minkow was also prosecuted on criminal charges that included insider trading and extortion. He lost, thus the five year prison sentence.

At one time, while Minkow was still actively bashing-and-cashing, I began the development of a website designed to expose Minkow as not having been reformed, and as still being guilty of fraudulent activity as far back as March of 2007. To that end I registered the domain name, playing off one of Barry’s favorate catch phrases, “You have to look below the iceberg”. Had anyone paid attention they would have clearly saw that what Minkow did to Lennar he had been doing to several other companies (including other non-M.L.M. companies, such as InterOil). Since Minkow’s sentencing a local news station in San Diego has uncovered other fraudulent schemes involving the church where he was the pastor and several of its parishioners (one claiming to have lost over $300,000 she lent to Minkow). All of this harm to so many of his victims, not to mention the almost $2.9 billion in losses suffered by innocent shareholder of those companies Minkow attacked, might have been avoided had fraud investigators, or at least commentators, turned their magnifying glasses around on Minkow himself rather than Minkow’s victims. Tracy Coenen, Robert FitzPatrick, Jon Taylor, Sam Antar, Gary Weiss, Michael Webster, Wesley Serra, Steve Rotolante, and so many others gratuitously and unconditionally supported and promoted Minkow’s activities every step of the way. Major news media, with far greater investigative resources that I have, incontrovertibly reported Minkow’s accusations to the public, often times interviewing Minkow personally and imparting greater credibility to him as a “reformed fraud buster”., Hugh Hewitt’s radio show, Neil Cavuto’s television show, Bloomberg, Reuters, CNN, CBS News, Fox news, and The Wall Street Journal, among others, all portrayed Minkow as a redeemed and trusted authority on recognizing and exposing fraud, which added substantially more weight to Minkow’s stock pounding hammer. Again, these are investigators who are CPAs, have post-graduate law and financial degrees, or who are trained and certified “fraud examiners”, and who, like Coenen and FitzPatrick, workeddirectly with Minkow. And all that I uncovered, with nothing more than my Associates Degree, my telephone, and Google, was always available and easily discoverable the entire time – years before it was recently uncovered in a Florida courtroom.

So that’s why I went ahead and completed, even though the heat on Minkow has pretty much melted his. It’s now more a testament to the selfish ignorance and/or gross incompetence of those who assisted Minkow and supported his agenda.

For the record, there were two groups of people who did know all along what Minkow was really up to. One are those who read, Judd Bagley’s investigative blog. The others are called MarketWave Alert subscribers!

Len Clements
Founder & CEO
MarketWave, Inc.

P.S. Please don’t forget, my (completely free) training series begins this Thursday, August 11th, at 5:30 pm PST (8:30 pm EST). Call 712-432-1000, 569-864-201#.


Alert #186: 8/10/2011

Len Clements to Conduct
Seven Part Training Series

In Conjunction With Free ANMP Training Calls

MLM 101: Basic Training From A to Z

I’ve listened to a lot of people attempt to train others on how to be successful at network marketing, for free. I mean a lot. Like, probably around 200 or so over the past 21 years. About two-thirds of them simply repackaged what the other third had already taught me. You know the old saying: Steal material from one person and it’s called plagiarism – Steal it from several people and it’s calledresearch. A lot of MLM trainers apparently love to do research. Roughly half spent way too much time pitching their training that wasn’t free, and about half of them spent most of the time doing that. You know that other old saying: You get what you pay for. Then there’s the small, but not-small-enough, minority that used their free training as bait, then switched to an opportunity pitch (i.e. you can’t get their extra powerful “inside secrets” unless you were part of their organization). Maybe a couple dozen of them actually taught me something unique and practical, that I could actually start using to build my business right now, never even indirectly alluded to their own opportunity, and spent no more than 5 minutes pitching their wares. Tom “Big Al” Schreiter, Richard Brooke, John Milton Fogg, Michael Clouse, Daren Falter, Margie Aliprandi, Hilton Johnson, Kim Klaver, Brian Klemmer, Nicki Keohohou, Ruth Van Buren, and another dozen I can’t recall, just off the top of my head. Out of over 200. And, yeah, I suppose I have researched them all, a little.

Although I’ve had great success within the profession of network marketing (I was the #1 earner in 7 of the 9 years I was with one company, and I’ve been among the top five earners in two of the other three opportunities where I was a full time distributor), and I certainly performed a lot of training to my own downline, my success within the network marketing industry (when my MarketWave hat is on) has come primarily from consulting, expert witness services, and training people what not to do. I’ve never really been known as an “MLM trainer”. But I also know a lot of things that you absolutely should do, and I’m amazed at how few trainers are including this vital information. So I think I’ll definitely accomplish the uniqueness goal. I’ll probably spend no more than two minutes out of the hour talking about my book and CDs and, most importantly, I know you’ll get practical strategies and techniques that you can implement immediately. In fact, that’s my biggest peeve about a lot of training I see today. It’s so much more motivational or educational rather than operational. For example, I recently participated in a webinar conducted by a leads generation guru who spent the entire hour telling us the importance of lead generation, the right attitude to have about acquiring leads, how lead generation companiescategorize and price their leads, how the internet has “revolutionized” the lead generation business, and about every other thing I would ever want to know about leads – except how to get one! Even during the Q&A, when I specifically asked for some specific lead generation tactics, all I got was “you have to talk to people”. Getting even a single, specific, lead generation method from this guy was like pulling teeth from a blue whale (which don’t have teeth – that’s how hard it was).

This Thursday, I’m going to tell you how to generate a lead. That’ll be the first segment of the series. It’s also probably the driest, most boring segment, but it’s one of the most important. Leads are the fuel that run your entire organization creating machine. You could master everything else there is to know about network marketing and have the world’s greatest products and pay plan, but without someone to tell about it you’re all dressed up with no place to go.

Here are the segment topics…

Aug. 11th: Lead Generation
Aug. 18th: Qualifying Your Prospect
Aug. 25th: The Follow Up
Sep. 1st: Overcoming Objections & Competitor Hype
Sep. 8th: Motivation & Goal Setting
Sep. 15th: Reducing Attrition
Sep. 22nd: Legal Issues/Live Q&A

The series begins this Thursday, August 11th, at 5:30 pm PST (8:30 pm EST), in conjunction with the regular weekly training calls offered by the Association of Network Marketing Professionals (ANMP).
Call 712-432-1000, 569-864-201#

A few years from now, when you look back on all those trainers you listened to and render them down to the few who didn’t bait-and-switch you, didn’t spend an unreasonable amount of time pitching their other stuff, and did impart original, immediately usable techniques and strategies to help you succeed, I’m confident I’ll make your list.

Thanks for your trust, and support.

Len Clements
Founder & CEO
MarketWave, Inc.

Alert #184: 7/31/2011

MLM Products
The Good, the Bad, and the Goofy

This Thursday evening, July 28th, I’ll be conducting a training call on behalf of the Association of Network Marketing Professionals which will address one of my favorite topics: The fascinating, often funny, and sometimes frustrating world of MLM products. I know some of you old-timey subscribers have played this game before, but here’s a little quiz that really sets the tone of this call.

Below is a short description of several MLM products. All but one is a real product, that was, or is, actually sold by an MLM company. You must choose which is the fake product. After reading the list the common reaction is that I mistakenly reversed my description of the list, and I must have meant that all but one are fake and you must select the one real product. Nope. As hard as it will be to believe, only one is fake.

#1 – Sound Wave Gel.
A topical gel that interacts with your body’s “energy field” to assist the body in healing itself. Works by infusing the body with high energy sound waves. This inaudible tone helps the trillions of cells in the body come into harmony. It miraculously organizes and harmonizes all human, plant and animal DNA.

#2 – Oxygen Supplement.
Many illnesses are caused by oxygen deprivation and our air “contains 50% less oxygen than 20 years ago.” This 2 ounce tincture supplements the oxygen supply in the blood. It consists of “stabilized oxygenated water and sodium” which is administered orally where the oxygen is absorbed via the digestive system.

#3 – Electrical Matrix Aligner.
Molecules and atoms are made up of electronic charges. Therefore, we should not focus so much on the chemical nature, but the electrical nature of our bodies. These nutritional products “align your body’s electrical matrix.” These are products with their “life energy” still intact.

#4 – Luminescent Blood.
Research in Japan has shown that the growth of harmful bacteria and viruses are inhibited by certain spectrums of light. Also, these light spectrums accelerate the production of antibodies. A line of products have been developed that can introduce harmless, luminescent phosphates into the blood stream, thus causing “the bad bugs” to go dormant.

#5 – Antibody Trainer.
Bacteria and viruses are becoming more resistant to antibiotics. This product “trains” chicken antibodies to recognize and destroy over 250,000 forms of viruses within the human blood stream. Can “stop sickness and disease forever!”

#6 – Shoe Insoles.
Acupressure therapy has shown that when certain sections of the bottom of the feet are massaged, there is a positive effect on various body organs. There are a variety of shoe insoles each with a different pattern of strategically placed bumps and ridges that are therapeutic in the treatment of various bodily ailments.

#7 – Amazing Crystals.
These microscopic crystals can cause water to freeze at room temperature, will increase the power and mileage in your car engine, will clean laundry for up to seven years without detergent, and causes skin care products to work 85% better.

#8 – Death Bonus.
Distributors purchase several life insurance policies and make the company the primary beneficiary on all but one. Bonuses of over $100,000 are distributed upline from the proceeds of the policies after a distributor dies. On average, one out of every 110 downline members will die each year.

#9 – Age Reversing Capsules.
The human body naturally sends “longevity signals” to the brain which tell your brain that your body is growing younger. This product increases and amplifies those signals. The result is that a 50 year old can achieve a “biological” age of 34 within six months (which can be verified by a “highly sophisticated” at home urine test sold by the company).

#10 – Sour Milk Perfume.
Distributors buy a package of milk culture which they grow in their refrigerator. The resulting culture is used as an ingredient in the reproduction of the actual perfume once used by Cleopatra. The company will repurchase the culture for more than the price paid for it, plus upline commissions are paid on the original culture purchase.

#11 – God’s Soap.
Cleansing products that, when used during bathing, will prevent or even cure various diseases. According to the company founder, he awoke in the middle of the night to find that God had written the formulas for these soap products in light on his bedroom wall.

#12 – Dilution Solution.
Prevents or cures toxin related diseases by adding the actual toxic substance to water, pouring half of the solution into an equal amount of water, pouring half of that resulting solution into an equal amount of water, and then repeating this process thousands of times until the solution is so diluted that not a single molecule of the original toxin remains. This final solution will still possess the “resonant energy” of this toxin and when consumed will protect the body from that toxin.

#13 – Asteroid Juice.
A large asteroid exploded over Siberia in 1908 leveling hundreds of square miles of trees and killing all life, even microbial, within the blast zone. But soon after various exotic forms of plant life began to grow within the area, including a fruit never before found on Earth. This fruit possesses amazing health and curative qualities.

#14 – Magic Wand.
This $400 metallic wand shoots a narrow beam of “zero point energy” up to 30 meters. When directed at an object or person and waved clockwise three-and-a-half rotations it can make food taste better, plants grow faster, increase strength, and treat or cure various diseases by causing the cells to “return to source”.

If you haven’t played the game before (or you did but don’t remember the correct answer), please email back which one you think is the product I just made up. I’ll reveal the answer during Thursday’s ANMP training call.

I’ll also be poking fun at, and holes in, some other goofy product claims and “technologies”. Although I want to keep this light, and have some fun with it, there is quite a bit of non-sense out there and it’s time to start calling out all this “junk MLM” that’s pervading this industry.

Please join us Thursday, August 4th, at 5:30 pm PST (8:30 EST)
Call 712-432-1000, pin 569-864-201#

Also, the following Thursday, August 11th, I’ll begin a seven part weekly training series that will take you through the entire income producing process, from generating your first lead all they way to keeping a large organization together once you’ve developed it. I’ll be sending out more details in the next few days, but in the mean time, please try to keep the next several Thursday evenings open for these calls. They’ll be free to those who listen in live, but you’ll have to either purchase the series – or be an ANMP member – to access them once each call has concluded.

Remember, email me your answer to the product quiz ASAP. I hope to hear you on tomorrow’s call (tonight’s, if you’re reading this on Thursday), and let’s have some fun!

Len Clements
Founder & CEO
MarketWave, Inc.

Alert #180: 6/15/2011

College to Offer Course in MLM
Accredited Marketing Degree to Emphasize Network Marketing

Bethany College was founded in 1881 and is located in Lindsborg, Kansas, right in the center of the state about 65 miles north of Wichita. It’s a 4-year, fully accredited undergraduate college with a 53-acre campus. It’s a real college offering realdegrees, and starting this Fall they will be offering a degree in marketing with an emphasis on network marketing. They are also developing an online certificate course which will focus on network marketing that will also award college credits.

You can read their press release here:

I wrote an article 13 years ago about why mainstream academia will never offer courses in network marketing. This was a response to the urban legend, then popular and still believed by many, that either Harvard or Yale had actually taught network marketing as part of their curriculum. My case was based on the simple thesis that no college or university would ever want to expose their student body to a career option that didn’t require a college degree. I suggested back then that the only way a college might prove me wrong is if they could find a way to make the inclusion of M.L.M. into their curriculum profitable, such as having the institution itself participate within an M.L.M. opportunity. While it is yet to be seen if Bethany intends to do this, and if so how, they do intend to offer a very extensive online program emphasizing network marketing which will involve 6 class hours, and will probably cost somewhat less than their normal $400 per credit hour (costs have yet to be determined).

Why Go to College when MLM Education is Abundant and Free?

This is one of several questions that have arisen since word first got out about Bethany’s ambitious endeavor. They’re all covered in the most recent edition of my “Inside Network Marketing” show where I interviewed David Frost, the Assistant Professor of Bethany’s Business & Economics Department, and who is spearheading their network marketing projects. You can listen to the 49 minute interview here:

The monofilament among all the questions that have been raised so far (that means, “common thread” — I paid $200 for these Verbal Advantage CDs and I’m damn well going to use these words for something) seems to surround the long held position within our profession that network marketing may not be easy, but it is simple. It’s a form of entrepreneurship that “anyone can do”, that “levels the playing field”, and that “doesn’t require any special education or skills”. So, why pay 100K in tuition fees and spend four years in a classroom? Well, let’s first, and finally, acknowledge that this long held position is complete and utter BS, and I don’t mean Bachelor of Science. If this business is so simple, and so easy, and practically everyone already possesses the knowledge and skills to execute it correctly and effectively —then why do over 95% of them fail at it? I’m not suggesting network marketing is not relatively simpler, easier, and less financially risky than most conventional businesses, and it does offer myriad other benefits and advantages, as described in my Case Closed! CD. But the simple fact is, the vast majority of MLMers fail to even earn a profit because the vast majority simply don’t do what they are suppose to do, well enough, long enough.

Especially long enough. Several major M.L.M. companies today provide an annual commission breakdown which includes the average earnings at each rank in their plan and the average number of months it takes for reps to reach those ranks. The rank where a significant net profit can be virtually assured is achieved, on average, in 6-12 months, and a minimal living income of at least $2,500 per month takes, again on average, 18 to 24 months. What most would identify as “wealth” takes 3-5 years. Yet, the large majority of distributors quit, usually to start over with another opportunity, within their first 6 months, and most of those drop out within their first 6 weeksOf course the huge majority of M.L.M. distributors don’t make any money at this business — because the huge majority quit too soon.

The primary reason for this is that there is little invested, thus little at stake if they fail. One age-old M.L.M. tenet that is quite true is, “Easy in, easy out”. Those who invest $1.5 million into a Taco Bell franchise (in fact, that is the going rate) usually don’t quit after a few weeks because it was harder than they thought it would be. Most franchise owners spend considerable time investigating what’s involved with running a business of their chosen type, and apply the level of commitment and tenacity that a $1.5 million potential loss affords them. Most network marketers are more than willing to eat the cost of their $25 distributor kit, and literally eat their initial inventory, after the first couple of nos. However, I’d bet that someone who devotes four years of their life and a $100,000 student loan to their business might not give up on it so easily. They’d also be acutely aware of what they are getting themselves into and what is necessary to achieve success. Bethany potentially offers a solution to the single greatest cause for failure in this profession — lack of commitment. They’d also be much better equipped to evaluate and select the opportunities they wish to pursue, thus offering a solution to arguably the second greatest cause for failure — lack of loyalty. Also, considering this is a marketing degree with an emphasis on network marketing graduates would still be eligible for conventional marketing positions, and would be prime candidates for M.L.M. corporate positions.

Also, consider the credibility boost to the industry if Bethany College should succeed with this program and any of the other 2,350 private colleges and universities in the U.S. (4-year and 2-year) should decide to duplicate it.

A Myth That Became a Fact

Until now no U.S. college or university has ever included M.L.M. as part of their accredited curriculum. No, not Harvard or Yale, and no, not even University of Illinois at Chicago. The latter offered, years ago, a for-profit weekend “certification” course (meaning someone had access to a laser printer) as part of their Continuing Education program. That’s where campuses have empty classrooms on nights and weekends and rent them out to anyone who wants to teach something. I once taught a class in network marketing for four consecutive Tuesday nights at UNLV. The catalogue that listed my class also listed classes in UFOlogy and Tarot Card reading. That doesn’t mean UNLV offers these classes. And no, not Utah Valley State College, although they did once offer courses tailored more to those seeking employmentwith an M.L.M. company. UTEP appeared to be close back around the turn of the century, but nothing came of it. To my knowledge, Bethany College will be the very first institution to finally make the “M.L.M. is taught in college” myth no longer a myth.

And they’ll prove me wrong.

Len Clements
Founder & CEO
MarketWave, Inc.

Alert #179: 6/8/2011

The Anti-Ambit Gambit 
Also, Industry Trends and How Not to Track Them

Ambit Energy Hit with Billion Dollar Lawsuit

Ambit Energy has been sued by two distributors for breach of contract, misrepresentation, fraud, deceptive trade practices, defamation, libel, harassment, and discrimination. Basically, the suit alleges Ambit “failed to accurately pay monthly customer residual income and weekly leadership bonuses to the Plaintiffs”, and is seeking redress of $50 million (that must have been one helluva miscalculation). The plaintiffs are seeking $1.16 billion in total compensatory and punitive damaged, including $13 million to cover “attorney’s fees” (they must have one helluva legal team).

The complaint can be found here:

I’m holding off on making any substantative commentary regarding the merits of the case because Ambit’s response has not yet been made public. I’ve found that no matter how solid the plaintiff’s story seems to be, the picture always changes when I’ve heard from the defense. Ambit’s attorney has asked the court for a conference before submitting a motion to dismiss, claiming the plaintiff’s complaint “fails to put forth even the most basic allegations necessary to maintain a federal suit…”, “fails to satisfy even the most liberal application of the pleading requirements…”, “fail to offer anything more than conclusory statements…”, and the allegations are “so vague” that they are asking the judge to compel the plaintiffs to submit a clearer, more substantive complaint so they know what to respond to. Ironically, the judge has responded that the pre-motion letter itself was too vague and “does not adequately set forth the factual and legal bases of defendants’ anticipated motion”. The defendants have until Monday to make a clearer case as to why the judge should make the plaintiffs present a clearer case.

But here’s the “gambit” the plaintiff’s are using, which is a tactic I’ve seen employed in many legal actions by distributors against network marketing companies, that always makes me shake my head.

Within their complaint they accuse Ambit Energy of violating Section 5(a) of the Federal Trade Commission Act by deceptively operating a “pyramid scheme”. This begs the question, what if the plaintiffs succeed on this charge? How will they convince a jury to award them unpaid bonuses and commissions from what they’ve just convinced them was ll-begotten gains from illegal activity? In this case the plaintiffs want another $100 million for being deceived by this “pyramid scheme”, so I suppose they can forgo the $50 million for the miscalculated checks. But I’ve seen this “illegal pyramid scheme” count in a number of wrongful termination cases where the distributor is only seeking back pay, and sometimes even reinstatement!

This strategy is usually designed to leverage the company into a settlement. No network marketing company wants to defend the pyramid scheme allegation before a jury, regardless of its merits. If the general public can be so easily mislead into believing legitimate network marketing programs are illegal pyramids by a few internet bloggers and their brother-in-law who was in Amway back in 1989, imagine what a good trial lawyer can do. But then, what if the company calls their bluff and doesn’t settle? Now the plaintiff must either file an amended complaint that drops the pyramid scheme charge, or leave it in and try to convince the jury to award them the unpaid income from, and perhaps to even reinstate them in, an illegal pyramid scheme!

This gambit can be an even more dangerous gamble when the plaintiff is a top leader who’s been with the company for a number of years. I recently worked on a case where, had it gone to trail (it didn’t) the distributor would have had to explain to a jury how she was completely oblivious to the illegal nature of her opportunity for eleven years, and only discovered it right after she was terminated.

Industry Trends, and How Not to Track Them

The Industry Trends page at has been updated. We’re still seeing a substantial rise in online chatter regarding the network marketing industry, both pro and con. We benefited from a 23.1% spike in pro-MLM references since last month, but also suffered a 26.6% increase in negative references. Of the top 100 Google search results for the term “MLM” 86 are now supportive, up from 82 last month.

I’ve always believed in the “Wisdom of Crowds”, and that the best “trend analysts” are the thousands of investors that make up what we call “Wall Street”. These purchasers of shares of a company’s stock are, for the most part, looking for those that they believe will increase in value. That is, get bigger, better, and more profitable. These trend analysts are much more pragmatic and much less prone to personal bias than those within the network marketing industry. Like me, for example. I have a personal, professional, and financial interest in finding evidence that supports my pro-MLM agenda. I honestly don’t believe I’m deliberately rigging the data, but I certainly am no less susceptible to “unconscious researcher’s bias” than any other analyst. So, fine. Don’t take my word for it. Let’s see what those thousands of other analysts down on “the Street” think about this industry’s prospects for future growth and prosperity.

In the last three months the overall stock market (based on the S&P 500 index) has risen 0.34%. The “MLM Index”, made up of the 12 largest publicly traded network marketing companies, has risen 10.97%. Over the past year these same dozen companies have beaten the overall market 27.63% to 19.53%. Apparently we “MLMers” aren’t the only ones who are optimistic about the future growth of the network marketing industry.

What’s one of the worst ways to track growth trends? Web traffic!

A company’s Alexa rankings seem to be the fashionable stat of choice now days when gauging who’s hot and who’s not within the network marketing industry. The assumption is, I assume, that an increase in unique visitors to a company’s corporate website, or in its monthly “reach” (percentage of all internet users who visited the site), means the company is growing, or at least that interest in the company is. Conversely, if their Alexa graphs trend downward the company must be shrinking, or interest in the company is waning. That’s certainly one possibility, but one of many.

Usana Health Sciences saw a spike in web traffic back in May of 2007, not because of any sudden interest in Usana by prospects or customers but rather all the adverse, high profile publicity caused by Barry Minkow (a short seller who profited by causing Usana’s stock price to drop, and who has just been convicted of fraud for the second time).

Over the second half of 2010 Yoli saw traffic to their corporate site trend downward after a significant run up the previous six months, which some competitors were quick to exploit as a sign of their pending failure. However, the reason was more to do with Yoli’s introduction of personalized marketing sites based on an entirely separate platform — traffic to which strongly trended upward during the same period. The lesson here is that a company can change the manner in which they use their online assets resulting in swings in web traffic that has little to do with the company’s popularity.

Another hypothetical example would be a hot new company that has its reps access their back office via the corporate site who then introduces a new training or marketing site that includes the back office log in. Reps no longer visit the corporate site to access their back office and its Alexa rankings drop, even though the company remains popular.

In March of 2010 Amway saw their web traffic almost double, an increase that was maintained until January of this year when another sustained run up of website visitors began. Is Amway suddenly getting hot again? Not really. Amway closed their online subsidiary Quixtar in March of 2010 which drove all their traffic back to Amway’s home site, and early this year Amway opened several new foreign markets and settled a $150 million civil lawsuit accusing them of being a pyramid scheme (which I believe is a record settlement for such a case) just before the new year began.

Foreign expansion can be a huge contributor to Alexa traffic rankings since, for example, the traffic to (Russia), (Brazil), (Japan), etc. are all combined. Another example is Longevity Network (which will be relaunching soon, BTW) which was foundering in the United States back in 1999 before launching South Korea, their only foreign market. They grew to over 100,000 distributors in S. Korea by 2001. Little changed in the US while their Alexa rankings skyrocketed.

Due to the algorythms used by Alexa to determine their rankings the margin for error increases significantly the less trafficked the site. Alexa openly declares, “Generally, traffic rankings of 100,000 and above should be regarded as not reliable.” If you’re thinking this would only apply to small, irrelevant companies, consider this applicable list: AmeriPlan (100,340), Trump Network (109,377), Watkins (114,022), Evolv Health (117,289), LifeVantage (117,563), Stream Energy (122,066), Neways (138,146), Reliv (156,817), Youngevity (157,904), Life Plus (253,601), Life Force (255,389), Max GXL (259,543), Zrii (283,201), Mandura (379,960), Oxyfresh (418,451), Zija (464,251), Jafra Cosmetics (599,225), Qivana (627,579), Princess House (769,257), and Rain Nutrition (784,741).

This is not to say that Alexa is useless in trend analysis. Not at all. I’m just saying their are myriad other factors you’d have to consider to know if the graphs related to web traffic are indicative of growth and popularity trends, and if so to what degree. One great stat that Alexa provides that is indicative of a company’s popularity, at least from the standpoint of prospect and customer interest, is the percentage of visitors to the company’s website that got there by the visitor specifically searching for it. Another is the amount of time the average user spends on the site. Just for kicks, I’ve taken the percentage of site visitors who arrived via a search engine and multiplied this by the number of minutes each visitor spends on the site (both are averages over the past 30 days). Here’s the results related to a sampling of some of the most prominent companies:

Avon              0.879
Qivana           0.875
Ambit Energy  0.805
Evolv              0.762
Nu Skin           0.757
Nikken            0.757
Max GXL         0.727
Melaleuca        0.712
Neways            0.712
Send Out Cards 0.683
ForeverGreen    0.660
Xyngular          0.607
Rain                0.606
4Life               0.605
Youngevity       0.546
Mannatech       0.527
Reliv                0.506
Trump Network 0.502
Amazon Herb    0.496
Yoli                  0.496
Oxyfresh          0.495
Vemma            0.486
Usana              0.469
Shaklee           0.447
ViSalus            0.442
ACN                0.442
Mary Kay         0.431
Amway            0.417
XanGo             0.403
Herbalife          0.399
PrePaid Legal   0.370
Mandura          0.350
Agel                0.324
MonaVie          0.315
Zrii                 0.305
JuicePlus         0.296
Essante           0.278
Isagenix          0.268
Numis             0.242
Life Force        0.189
Vitamark         0.189
AmeriPlan        0.177
Amega             0.177
Freelife            0.173
Market America 0.154
Tahitian Noni    0.137
Monitium          0.092
Sisel                0.050
MPB Today       0.045

Another good way to track growth and popularity trends is to record the number of new references to the company’s main home page that have been added to the internet over the previous 30 days, then compare it to the same data 30 days from now, and each month going forward. Google provides such search capabilities and I’ve logged the numbers for all the companies listed above. I’ll let you know the results in 30 days.

Len Clements
Founder & CEO
MarketWave, Inc.

Alert #173: 3/25/2011

Barry Minkow Charged With Securities Fraud

Ex-Con to Plead Guilty to Charges Alert Subscribers Knew About Four Years Ago

Anti-MLM critic and so called “fraud buster” Barry Minkow, who was convicted of securities fraud in connection to his ZZZZ Best carpet cleaning business in the 1980s and served over seven years in prison, was accused today of conspiring to commit securities fraud on (non-MLM) homebuilder Lennar Corporation. This follows an earlier charge of insider trading.

Federal prosecutors are accusing Minkow of spreading false information about Lennar using online press releases, emails to the media, online videos, and his own “Fraud Discovery Institute” website between January of 2009 and April of 2010. Prosecutors believe Minkow was trying to decrease Lennar’s stock price for his own personal gain, and to compel Lennar to pay a coconspirator which had previously lost a lawsuit against Lennar. The conspirator, believed to be real estate developer Nicolas Marsch, hired Minkow to beat up on Lennar allegedly to extort a cash payment from them.

According to court documents, Minkow’s statements “alleged widespread improprieties in Lennar’s financial reporting and business structure, and attacked the personal character of Lennar’s management,” with “reckless regard for their truth.”

Lennar’s stock dropped 19.9% percent after Minkow’s first Lennar report, which was followed by 12 more public hits on Lennar, either by way of a press release, new investigative reports, or online videos. Lennar’s stock dropped after 10 of the 13 total attacks possibly costing innocent Lennar shareholders over $861 million[1].

In an earlier and separate civil action Minkow was sued by Lennar for libel and extortion and was ordered by a Florida State Court judge to pay sanctions that could amount to “hundreds of millions of dollars” for a variety of acts designed to fool or mislead the court. You can read more about this action here:

The actual order can be viewed here:

This new federal charge is a criminal action that could send Minkow back to prison for up to five years. You can read a recent news report about this action here:


Bloomberg (video):

Minkow has recently resigned as lead pastor for the San Diego based Community Bible Church. The church’s website states Minkow “has informed the church that he will plead guilty to one criminal count related to a lawsuit with which he was associated”.


Barry Minkow and his “Fraud Discovery Institute” began attacking M.L.M. companies in March of 2007. You can read the whole story in the comments section of Alert #165. Basically Minkow would hire uber-anti-MLM critics Robert FitzPatrick and Tracy Coenen to help him create smear campaigns against public M.L.M. companies which he would take short positions in (he purchased put options which allowed him to profit by the company’s stock going down). His tactic would be to do exactly what federal prosecutors are now accusing him of doing with Lennar. That is, use his media bestowed credibility to trash publicly traded companies so he could make money when their stock would go down. He’d accomplish this by making false statements about the company’s legality, ethics and financial viability. In some cases, such as his attack on Usana Health Sciences, Minkow was also paid by other short sellers so they could profit from the stock drop, too. In Usana’s case Minkow was paid $200,000[2] by fellow stock-fraud felon Sam Antar and another $50,000 by two hedge fund managers.

Of course, MarketWave Alert subscribers knew of Minkow’s bash-n-cash scheme four years ago. You can read my various rebuttals to Minkow’s M.L.M. company attacks HERE (see the documents listed in red).

What’s most sad about this is that the over $2.8 billion in total losses Minkow may have caused the innocent shareholders of his victims[3] might have been avoided had the mainstream media taken these rebuttals seriously rather than ignoring them. Instead, they kept on promoting Minkow as a credible, reformed scam buster. In fact, the Wall Street Journal would routinely report on Minkow’s attacks, giving them that much more credibility. After Minkow first turned his crosshairs on public M.L.M. companies with his Usana hit piece I contacted the WSJ reporter who was, at least inadvertently, supporting Minkow’s attacks. I made him aware of all the evidence I had that Minkow and his cohorts, FitzPatrick and Coenen, were unjustly attacking this and other companies based on bogus information. It was not until about a year later, after a Minkow induced SEC investigation of Usana and three separate class action lawsuits (one shareholder, one derivative, and one distributor) were all dropped with no finding of wrongdoing on Usana’s part[4], that this writer confided in me that he had only just then went back to read my rebuttals and “really wished I had read them back when you first sent them”. His supportive Minkow article he claimed he was working on never appeared in The Wall Street Journal, and he never wrote about any of Minkow’s attacks again.

Even more evidence that Minkow is still not telling the truth occurred during an interview with a local ABC news affiliate in San Diego last February. According to the article, Minkow claimed “We had 24 cases, 23 led to convictions” and that the Lennar case was “number 24”. I guess Barry’s now infamous selective memory must have been engaged during this interview, and he just forgot about Usana. Or Herbalife. Or Prepaid Legal. Or Medifast. Or, for that matter, the non-MLM company InterOil (IOC) that he shorted and trashed. Not only did none of these cases involve any “convictions”, Minkow failed to get any legal authority to take any action against any of these companies of any kind! He just shorted them, bashed them, then cashed out.

It’s also interesting to note how Tracy Coenen unconditionally and obligatorily repeated, supported and defended each and every one of Minkow’s accusations against Lennar (as she did with Usana, Herbalife, Medifast, and others), going so far as to declare that their CEO “blatantly lied”, Lennar exhibited a “pattern of fraud and deception”, and Lennar was perpetrating a “giant Ponzi scheme”. She even titled one of her blog entries “Being right feels so good” when she thought her and Barry had proven one of their many accusations. Tracy is usually quite the chatterbox when it comes to defending her position and credibility, yet she doesn’t seem to have anything to say about Lennar right now (she’s removed all of her many blog posts about them, but I have copies). She also doesn’t seem too keen on defending Barry anymore. She hasn’t offered a word of support (and yes, Tracy, being right does feel good 🙂 

It’s also odd that Minkow has left his website online in spite of the fact he hasn’t updated it since June 4th, 2010, and it still defiantly showcases both his Lennar and Medifast smear campaigns, including his supposedly upcoming Lennar documentary called “Two Big To Go To Jail: The Lennar Story“, and his own autobiographical movie. Yes, there is a movie about Minkow’s life, titled simply “Minkow” (which was originally to be called “Redemption”), staring Minkow playing himself along with a great cast, including James Caan, Mark Hamill, Ving Rhames, Talia Shire, and Justin Baldoni (as a young Minkow). It was due to be released sometime this Spring, but due to recent events the director has suggested the ending may need to be revised.

I hope they allow cameras in prison.

Len Clements
Founder & CEO
MarketWave, Inc.

[1] Based on an analysis of change in Lennar’s closing share price the day previous to the Minkow attack and the day of the attack, and factoring out the change in the overall market (based on S&P 500 index) during that same period.

[2] Minkow claims Antar only paid him $100,000 for his Usana report, and the other $100,000 Antar paid him, right about the time Minkow first began his Usana investigation, was simply a gift due to Antar’s “admiration” for Barry.

[3] Based on the analysis described in footnote #1.

[4] The SEC “informal inquiry” was dropped with no action taken, two lawsuits were dropped by the plaintiff, and another was dismissed on summary with the judge declaring that the claims made against Usana, most taken directly from Minkow’s material, were not even “plausible”.