Tired of your dead-end job? Why not become a convicted fraud felon and sell your secrets to the FBI!
Seriously. Meet Barry Minkow at his FDI site. (Yes, FDI, not FBI.)
Here’s a guy who once went to prison for schlepping hundreds of millions of dollars from consumers in the 1980s. He even once bunked with a convicted murderer, and his biography claims that he spent seven years in prison among many of the “nation’s leading white-collar criminals.”
Apparently, they taught him how to play the PR game to the hilt. It seems these days that most people convicted of some sort of crime tend to find God or some religion when all else fails. Folgers Coffee drinkers – take heed – you’ve got competition with Insta-Religion and Insta-Credibility poured in for good measure.
As always, to best perpetuate fraud, it requires that you establish some form of credibility with your victim. I don’t know Minkow, but his FDI website looks conspicuously like the FBI in terms of acronyms. It does sound a bit misleading. I imagine the fun I’d have if I worked at the FDI:
“FREEZE!! YOU’RE UNDER INVESTIGATION BY THE FDI!!”
“Wha- the… ?”
“Nah, man! Just joking with you! I said FDI! Not FBI! Didn’t you catch that?”
“Uhh-”
“You ok? Buddy, you ain’t looking too good. You need a what? A heart – oh, a heart attack? You’re having a heart attack? What’s the name of your church? I’ll investigate them! Don’t worry, if you die, I’ll be sure to investigate the hell outta them! Here’s my card. Praise Jesus.”
I read a bit more into the FDI website and found that Minkow thrives on killing Christian churches, even though he leads his own church. Wow! Talk about eliminating competition! Minkow has got it down pat! Jailhouse rules seem to apply to Minkow: to survive, one must eliminate the competition. Included is a "frauds gone wild" video segment on the FDI website. Imagine half-naked, barely legal girls dancing and frolicking for accountants during tax season.
The Wall Street Journal recently reported his latest target is a vitamin supplement distributor, Usana Health Sciences. Reading his responses to Usana’s defamation lawsuit had me wondering what Minkow does for a hobby. The whole website, as I mentioned previously, is one giant Minkow self-promotional blog – even if it’s hidden under the pretenses of being some institute of fraud – and I find the whole Usana vs. Minkow to be less about consumers and more about Minkow.
Article comments
— go to most recent comments1 - JustOneMan
So Paoti...how long have you been working for Usana Health Sciences? Not sure what point your making? Guy served time now he's using some great PR techniques to promote his book and vanity site...stope being so jealous!
JOM
2 - Michael Webster
You should take the time to read the entire 500 page report.
It addresses important legal issues regarding the regulation of the entire mlm industry.
3 - Steve Logan
Michael (above) is right. You should take the time to read the entire report and address the Message instead of attacking the messenger.I am not defending Minkow's criminal past, but just because someone did wrong in the past does not make them incapable of doing right in the future. In fact, to the Liberal way of thinking, isn't that the whole basis for "rehabilitation" instead of "punishment" in our prison system. (by the way, I don't buy into this whole "rehab" thinking, but the liberal media seems to embrace it wholeheartedly). Also, you mention the "Frauds Gone Wild" video series that Minkow produced and now sales, and in doing so you inferred that "half-naked, barely legal girls dancing and frolicking..." were involved and shown in the videos, proves that your research of Minkow is as fraudulent as you claim him to be. These videos are to help people from being duped and there is no mention or visual of any loose women or risque behavior. I think that JustOneMan may be onto something when he asked "how long have you worked for Usana?"
4 - Justin Tyme
Mr. Minkow says that he found Christ in prison. Which version of "Christ" did he find? Even putting that aside, he states that his life is about finding "redemption". Well, to me, he's going about it entirely wrong and doing untold and ever expanding harm in the process. To me, redemption would be about helping something perform or function better! For example, in the case of USANA, it would have been far better and appropriate to have offered suggestions on how to have USANA be an even better company. Instead, he chose to do the same old thing he's always done which is to try to be the "King" and control (i.e., manipulate and exploit) others, stock, etc only this time he's doing it cloaked in the "self-righteous" clothes of "religion", "God", the "FBI", so-called "good guy" finding the "bad guys", etc ad nausem. He hasn't changed! He's still being dominated by an inferior "super-ego" and out to draw attention to himself so he can make all kinds of money "legally", which is fine, but he's doing it "unethically" in my book.
5 - Justin Tyme
An additional comment! Mr. Minkow says that "in the spirit of full disclosure" he states he's been paid to do the investigation. That is obviously and blatantly NOT full disclosure.
Full disclosure would be to state in clear and complete detail everything about "who" paid him, why, how much, for how long, what the money will be used for, and so on leaving out absolutely nothing. Did he do this? Absolutely not! Smells funny to me!
6 - Jose_Noway
I've read the whole 500 page report, and its half truths and opinion. The funny thing is that the guy obviously knows nothing about MLM companies or USANA, evident by when he's not talking off a script. Instead he goes and gets the most anti-MLM people out there and has them feed him his lines.
I don't do MLMs, I just found this one funny because its in my new hometown of SLC, and I studied Minkow in school (I'm a CPA). He's obviously just, as one author put it about Minkow, "the most convincing criminal I've ever met". Every argument he's made, save the one about Waitley (reknowned speaker that USANA didn't make, but used and had on their board), has holes in them that he's intentionally leaving out. He's just a fraud of man.
7 - Justin Tyme
Has anyone watched the video clips of Mr. Minkow? Reminds me of the stereotypical "used car salesman" completely with dodgy eyes, exaggerated body movements, hyperactivity, unsettledness, hype, etc. I just don't get that he is an honest well-meaning man. In fact, just the opposite.
Also, it seems fishy to me that someone born into a Jewish family engrained in the Jewish religion would "go bad" then find "Christ" in jail, then become a "minister", the start a church, and then set out to "redeem" himself by trying to find organizations, companies, individuals, etc who look like they are doing the same thing he did for which he spent several years in jail for and was ordered to pay multiple millions in restitution fees. Me thinks that his "spots" have not changed. In fact, he's doing the very same think only trying to cloack/hide it under the umbrella of becoming a "bad good turned good" as a result of "finding Christ". And what an effective way this formula has been to get back into the graces of fellow Christian religionists who tend to overlook and not recognize a wolf in sheeps clothing!
8 - TC
To read the 500 page report on Usana and not comprehend it's implications, speaks to the cult-like dynamic of it's members, that takes place in MLM, the denial of the scam and ignorance on securities laws. Other than comparing the wrong kind of vitamins, chemical vitamins to the whole food vitamins, the report has merit, otherwise the SEC would not have opened an investigation. I know I have been regulated by the SEC for 18 years. The price is still high compared to other whole food organic vitiamins. This company has crossed the line. When the SEC charges them with securities fraud the top will crumble and the stock will fall. And Dr. Myron will be out of the country on a pile of cash. Attack and defend the message not the messanger. Who better than a former bad guy turned good cop to expose the truth. Just like Frank Abagnale Jr and the FBI. The reason Usana is attacking the messanger is they cannot defend against the truth.
9 - Lisa
Minkow is deceptive. The statistics that he points out are taken out of context.
He claims only 14% of sales are to customers. Not true. Minkow was only looking at customers that are on a monthly autoship program, called "preferred customers". He does not count any single product orders. Very deceptive.
Also, many "would be" preferred customers sign up as associates instead ($20 one time fee), so they can earn a commission check here and there for referring a few people. My dad, sister, and mother in law are examples. This artificailly inflates the stated number of associates. This helps explain why only 37% of "associates" earned commissions in 2005.
USANA actually did a survery 2 years ago of 43,000 associates and asked why they joined the business. 75.69% said it was primarily to improve their health. Only 24.31% said it was primarily to improve their financial future. Of those 24% some said they wanted to make a couple hundred a month extra and some said they wanted to replace their income.
This is not to say that everyone who wants to make money does. Some people do not do the work that it takes to be successful. Others aren't trained adequately. But the situation is not as dire as the statistics make it seem when they are taken out of context.
Lisa
10 - diizy
hey guys, if anyone knows Usana, then everyone knows Sterling. Biggest associate there is, he's told me about Minkow's ways, and hes still a fraud.
He's taking Usana's stock and making millions of it dropping. (It's gone down I think $40 in the last 90 days). This guy has to be stopped, once a scam ALWAYS A SCAM.
Don't ask me to recite my sources because I wont give you them, I know Sterling Ottesen and he's getting screwed over by this guy. The whole company is... this is uncalled for and unecessary. Why not go after Ameriplan or 4life or some crappy MLM. I'll try my best to expose this guy.
Ps. I'm not a Usana associate either.
11 - Juntin Tyme
Mr. Barry Minkow's newest D-Grade, self-made, video is simply mind-boggling and absolutley riddled with inaccuracies, leading questions, guided response, etc. To someone with even the slightest bit of experiential knowledge of network marketing would be able to instantly spot his shyster tactics. His few cherry-picking questions asked to evoke certain pre-calculated responses ought to be illegal enough to put him back behind bars. Any intelligent responsible human being could ask the couple he interviewed a few direct and simple questions that would expose quickly how they didn't take responsibility for educating themselves about the business; they apparently didn't closely read the "Policies & Procedures" and other material that they should have read since it was "their" business; that they quit early which is why they didn't make any money; they "blame" others and the company and everything and everyone else for their "failure"; they didn't take advantage of the legal tax deductions and write-offs which would have saved them thousands of dollars; plus much much more! It was obviously an extremely prejudicial shoddy video aimed painting a negative picture of USANA when all it really does if you watch it closely is reveal the dark side of Mr. Minkow and the lack of self-responsibility on the part of those being interviewed. And why would anyone spend $6,000 on their business? That's so stupid! What were they thinking? I think they made up that figure to appear "victimized" so those watching the video would feel sorry for them rather than see how stupidly they went about building and taking responsibility for having their business be successful.
And to think that Mr. Minkow "represents" Jesus Christ and the Christian Religion. Well, as the old saying goes, "Even the Devil can quote scripture!" and "Beware of wolves in sheep's clothing. This is the way they'll enter the Church!" "They come to destroy, not to reveal and honor the truth!"
12 - Steve
I feel sorry for the couple in Minkow's video who failed at their Usana business. I also feel sorry for my neighbor who failed as a salesperson at a local Lexus dealership in my area. The stars of the Minkow video didn't have a clue about how to succeed in Usana just as my neighbor didn't have a clue about how to sell a Lexus to upscale customers. But one of the crucial questions to ask in the Minkow-Usana matter is: who's paying Minkow to carry this ball and how much is he being paid. Secondly, why did he short sell Usana stock and then come out with his report. Minkow is what he is...a convicted stock fraud felon, a make believe preacher an a self serving, self promoting guy who's in debt for what's been reported to be about 19 million dollars.
13 - Al
What about all the share holders Mr.Minkow hurt with his lies about Usana. What about the profits he made by making those remarks and causing the stock to drop for his own personal gain. He is only looking out for himself. But one day he will have to answer to the almighty. Mr. Minkow is just a wolf in sheeps clothing
14 - Justin Tyme
Below is a copy of an article written by an acquaintance of mine who is NOT affiliated with USANA. I believe it is well worth reading very closely!
Justin
"Minkow's USANA Attack: Why The Industry Should Take Note!
Because of my intimate knowledge of USANA, I have had several phone calls about the company and several asking for my opinion on the current dispute between USANA and Mr. Barry Minkow from the Fraud Discovery Institute.
In response to the inquires, I'll take the next few posts to outline my opinions and to invite others to provide me with their insight and perspective.
WHY DIRECT SELLERS FROM ALL COMPANIES SHOULD BE CONCERNED!
During a recent call with a Wall Street Analyst, I was asked, "Why do you think Minkow is doing this? How is he profiting if he has shorted only a few hundred USANA shares?"
My answer is "I have no idea," but if I were investigating this I would see how many other direct selling companies Minkow has shorted. In other words, if I am Minkow, I know that everyone will ask "how many USANA shares are you shorting?" BUT, would they ask me, "How many Mannatech shares, NuSkin Enterprises shares, Reliv shares or shares of Nature's Sunshine are you shorting?" -- probably not.
You see, investors who are putting money in this industry are often watching the reports and activities of the whole industry to get clues as to the direction their investment might be heading. Reports of delays in China from one company, usually causes analysts following that company's competitors to reassess their projections based on the likelihood that their company may also experience the same delays.
USANA is one of a handful of the publicly-traded network marking companies with significant good will among institutional investors on Wall Street. (If you don't believe me look how many of the analysts have stuck with the company through these charges).
In fact, I have personally spoken with analysts about the company and know first hand how they view USANA. Therefore, an attack on USANA is likely to impact all of the network marketing public stocks.
Indeed, Minkow's attack on USANA should be a concern to all network marketing companies (public or private) for the following reasons:
1) If Minkow convinces the FTC to take a closer look at network marketing practices, the industry could lose significant ground gained from years of good behavior and consistent education led by the Direct Selling Association (www.dsa.org). No matter the industry, significant changes in government rules and regulations have an negative impact -- that impact is magnified in this industry with so many independent agents who lack the comfort of a corporate legal team.
2) USANA has one of the industry's best reputations for ethics and truthfulness -- if Minkow convinces Wall Street that USANA has systematically withheld the truth, I believe that Wall Street is likely to lose confidence in the broader industry which could lead to the loss of billions of dollars of institutional capital currently invested in network marketing companies. This capital has also been available to private companies and has funded the acquisitions of several companies (Herbalife, Body Wise, Arbonne International,etc.).
3) There is no reason to believe Minkow will stop at USANA -- it seems apparent that he has partnered with individuals who have an issue with the whole industry. Any network marketing company could be the next to receive virtually the same set of complaints and attacks as Minkow has leveled against USANA.
4) FDI's claims create uncertainty for potential distributors. While some will interpret this as a USANA specific issues, others will view the claims as an indictment on the whole industry and all direct sellers will be forced to begin anew to recreate the credibility earned over more than 10 years of notable ethics improvements.
WHAT SHOULD YOU DO IF YOU ARE A DIRECT SELLER?
Direct Selling is characterized by companies and individuals who have always been willing to share information, but have rarely actively defended a company called into question. While USANA must stand alone in answering questions about the company's representations -- all of us can actively engage in educating our distributors, regulators, and the general public about the misrepresentations Minkow is using to describe the network marketing distribution channel.
AND we can all do our part to continue to improve. We know there are misrepresentations (often innocently made under the stress of being in front of a public crowd) and we need to continue to make sure we insist on complete honesty.
We need to continue to push for more retail sales, and greater number of consumer sales. Our products should deliver true value to the end consumer and we should have customers in our portfolio who purchase the products because they want them -- not because they want to earn a commission. All of us should be actively engaged in monitoring the market, and in making sure our products are priced according to competitive benchmarks.
I will take time over the next few days to do my part to bring some clarity to the issues highlighted in this dispute and I invite you to give me your comments as well." (End of article!)
To repeat what I mentioned in a previous post of mine, Mr. Minkow is NOT "redeeming" himself in my view. How could he (or anyone) call it redemption to try to destroy an extraordinary opportunity to live life more fully in health and financial freedom for hundreds of thousands, if not multiple millions of people worldwide? That is NOT redemption. That is criminal and it sure isn't what Jesus Christ was all about. He said that He came to give "Abundant Life", which is precisely what USANA is about.
Mr. Minkow and his minions, in my view, are doing the exact opposite. And to make matters supremely worse, they are doing it in the "name" of God, but not the "Spirit". Again, even the Devil can quote scripture!
Justin
15 - Justin Tyme
Here's a copy of another blog article!
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USANA POWERED BY NATURAL 'MOMENTUM'
In an industry that talks a lot about momentum, USANA has found a way to capitalize on the natural momentum of the jet stream.
Congratulations to Dr. Wentz, David Wentz and the USANA management team for taking action to do their part to reduce dependency on fossil fuels.
According to an article in the Salt Lake Tribune,
USANA Health Sciences Inc., a West Valley City manufacturer and direct seller of nutritional supplement and personal-care products, has made a large renewable energy purchase from Rocky Mountain Power.
The company is buying 75,000 kilowatt-hours of Blue Sky wind energy per month, which is enough to offset 900 tons of carbon dioxide emissions each year.
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16 - Justin Tyme
Here's a copy of an article from another blog!
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Does USANA have products with consumer value?
If an alien visited Mill Creek Junior High to watch its (the alien's) first and only basketball game, the alien might conclude "ALL BASKETBALL PLAYERS ON EARTH ARE SHORT AND WHITE." That headline would get a chuckle out of those of us on earth who have experienced March Madness.
Well, Mr. Minkow (who is somewhat of an alien to direct selling) visited USANA and somehow got fixated on one or two products and has conveniently forgotten the dozens of other products in USANA's line. His headlines reflect the small sample size of his study, and his conclusions have left those of us on earth chuckling a bit. Fortunately, I actually spent a year of my life studying this is exact issue and here are the facts:
1) The USANA HealthPak 100 -- delivers convenience -- not necessarily the lowest price. Believe it or not, it is expensive to package the vitamins in daily dosages and USANA charges a premium for the convenience of the pack. USANA's HealthPak 100 was never designed to be a retail product (in other words it was not designed to be resold), but rather to be purchased direct from the company. Fortunately, USANA has a Preferred Customer program which allows those who would otherwise be 'retail' customers to place their order from the company, be serviced by the company, and still allow their friend or family member to earn commissions on their purchases. Welcome to network marketing in the 21st Century.
2) USANA actually spent tens of thousands of dollars to conduct a pricing study. They acted on the information they collected (from current, previous and non-customers) and dropped their prices considerably in the spring of 2000. It was called the "Price Value Initiative" and it was a painful era for the company (by the way -- it was a calculated pain pill the company took and I believe it has paid off in the long run). For those who want to build a retail business and mark up the products, you would choose to use one of a dozen products packaged in bottles and made available at much lower prices than the HealthPak 100 and with plenty of room for a retail mark-up.
3) Pricing is a positioning tool, not just a measure of value. The world is full of brands for which consumers are willing to pay a premium. USANA has made an effort to get out of the commodity pricing of nutritional supplements by increasing quality and packaging services around the supplements. So even if its costs were lower than its competitors, it would use its price to establish in the minds of consumers the quality of its brand (and the brand includes the bundle of services that accompany what some might call the commodity in the package -- this bundle includes educated sales associates, personal selling, 800 call center, customer service and support, conferences and workshops, quality control, etc., etc...). USANA is not looking for the customer who wants to buy their vitamins at Wal-Mart for the best possible price -- they appeal to the discriminating consumer who is willing to pay for panache -- and there are hundreds of successful, profitable, companies who have built a business in other channels, with different commodities.
The GOOD NEWS: USANA has tons of research and significant consumer feedback to prove to any analyst, any judge, any regulator, or any customer that they care about delivering value and made difficult business decisions to respond to customer pricing concerns.
The BAD NEWS: I know of many direct selling companies who have not been so sensitive. This is an opportunity for improvement for the industry, and I invite all companies to engage in a rigorous analysis of their pricing to make sure that there is a legitimate consumer value proposition.
Direct sellers must constantly balance the value they are able to deliver to the end consumer with the business costs entrepreneurs must incur each month to qualify as a legitimate 'distributor' of the company's products.
[End of article!]
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17 - Justin Tyme
USANA CELEBRATES ANOTHER RECORD YEAR
*Unparalleled financial results
*Paid out more than $800 million in commissions to-date
*Increased Million Dollar Club to 73 Associates
*Surpassed $374 million in sales
*Achieved record-setting growth for the 18th consecutive quarter (4 1/2 years)
Recognition from respected national experts
*Ranked #12 on Forbes' "200 Best Small Companies" list, and the only direct sales company to make the top 20 for the last three years in a row (Nov. 1, 2006)
*Voted "People's Choice" for nine years running by NetWork Marketing Today & The MLM Insider Magazine
*President Dave Wentz named Chairman of Direct Selling Education Foundation & Vice Chairman of Direct Selling Association
*Listed in The Wall Street Journal's "Smart Money Stock Screen/Efficiency Experts" (April 20, 2006)
*Named one of Utah's "Best Companies to Work For" by Utah Business magazine (Nov. 2006)
Products unequalled in quality
*USANA Essentials™ received highest ranking for a nutritional supplement in North America by Comparative Guide to Nutritional Supplements
*Awarded Utah's Best of State 2006 medal for dietary supplements for a record third year
*Received NSF International certification for successfully meeting all listing criteria for Dietary Supplement Standards
*Manufacturing facility received dietary supplement Good Manufacturing Practices registration by NSF International
*Selected as official nutritional supplement supplier for Sony Ericsson WTA Tour (Women's Professional Tennis)
Making a difference worldwide
*Donated more than $3 million to Children's Hunger Fund since 2001
*Treated more than 7,000 people at Dr. Myron Wentz' privately funded medical center in Uganda and broke ground on second facility in Cambodia
*Established an environmental policy to help USANA conserve energy, reduce waste, and lessen impact on the environment
*Received the Environmental Protection Agency's Green Power Partnership Certificate
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Imagine how better our world would be if Governments and other businesses and corporations worked this well and ethically! And the above is just a partial listing of USANA's accomplishments and recognition. Shame of Mr. Minkow and his minions for wanting to destroy USANA.
18 - Christopher Rose
Justin Tyme: This is a comments space. Either make your own remarks or provide a link to those of other people but STOP pasting in this "borrowed" content. Any more will be deleted.
Thank you.
Christopher Rose
Blogcritics Comments Editor
19 - TC
What is this a commercial for USANA. Doesn't anybody know how to think for themselves.
20 - Steve
Regarding The Above Post. No, these comments aren't commercials for USANA. They're thought out statements backed by fact and third party verification. Could it be that USANA is a company manufacturing and distributing top quality nutritionals while providing a world-wide distributor team with a real chance at creating financial success? Think about it. (Sorry for the commercial)
21 - Justim Tyme
Hi TC,
What was posted by me was NOT a "commercial" for USANA, as Steve so accurately stated. They were "completely and easily verifiable facts" and presented exactly that way so they would NOT be construed to be "mere opinion" and "made up stuff".
As for "thinking for oneself", personally speaking, that is what all of my posts have been. I think for myself and part of that is to pass on or share "facts as opposed to merely serving up opinions based on "knee jerk" reactive, emotionally laden, prejudicial, biased, vested interest kinds of thinking that plague most lists and blogs, indeed even so-called reporting in magazines, journals, newspapers, on TV, etc.
Oh, by the way, I am NOT a Usana Distributor. Nor do I own any Usana stock. I simply recognize a "wrong" posting as doing something "right" in the "name of the most holy" disguised in the "pretend cloak of redemption" and have chosen to toss in my 99 cents worth! (Obviously this is my *opinion*.)
Justin
22 - Justin Tyme
Here's a rather lengthy fascinating, enlightening, revealing article well-worth reading for those you want to seriously understand and gain insight into what's happening!
Justin
[Justin, please don't post raw urls and it's not necessary to post them twice. Thank you. Comments Editor]
23 - Justin Tyme
Hi,
To all of you who have open listening ears and hearts, click on and closely read the document the above URL points to.
Cheers!
Justin
24 - Steve
Len Clements of Marketwave.com has written a 28 page rebuttal to Barry Minkow's Usana attack report. Minkow's response to it is nothing short of pathetic. Mr. Clements is not only a court certified expert witness concerning MLM cases, but is also an MLM industry advocate who has himself gone after MLM companies who acted in less than honorable fashion. The man is objective to say the least. For some nice insights, read Mr. Clement's report and then pick up Minkow's response to it on his FDI sight. Pathetic. Isn't it strange that the blogs are not picking up on the Clement's rebuttal or updating their coverage of the Usana situation as more and more supporting evidence of Usana's legitimacy is being published. I invite the owner of this site to review the Clement's report, and if he deems it an authentic piece of objective analysis them PUBLISH IT!
25 - steve
CORRECTION: Len Clements' rebuttals are at marketwaveinc.com I mistakenly listed it as marketwave which is an unrelated site. Go to marketwaveinc.com for honesty and clarity regarding Mr. Minkows misguided accusations against Usana
My apology for the typo