Vemma Reaches Settlement Agreement in FTC Pyramid Case

Federal Trade Commission VS Vemma
Vemma, its CEO Benson K. Boreyko and top distributors have reached a settlement with the FTC in the pyramid scheme case the agency filed more than a year ago pending approval from the agency commissioners. While details of the settlement have not yet been disclosed, court documents state that the company, Boreyko and top distributor Tom Alkazin and his wife Bethany Alkazin have agreed to a permanent injunction and monetary judgement.
In August 2015, the FTC swooped into Vemma offices with a court order that effectively shut down the Arizona-based nutritional supplement MLM, which was at the center of a investigation and complaint to the agency. The agency filed suit under seal alleging that Vemma, Boreyko, and Tom Alkazin were operating a pyramid scheme and that in order to protect consumers it needed to take immediate action to halt the deceptive business practices and prevent the defendants from dissipating assets and destroying records.
That summer day was just the start of the FTC’s legal battle with the company and Boreyko over Vemma’s recruitment-focused business structure. The agency alleged that the company ensnarled students across the country with deceptive promises of riches in what Vemma deemed a so-called “Young People Revolution” (YPR) that was in fact a money-losing venture.
The company had to then operate under the supervision of a court-appointed monitor and a new business structure that only compensates distributors who focus on retail sales instead of recruitment. But since being forced to operate as a legitimate MLM, Vemma has reported heavy losses, canceled product lines, shuttered operations overseas, terminated its lease on its Tempe headquarters and is selling off its furniture, fixtures and equipment. Many top distributors have left for other ventures.
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