FTC vs. Vemma | Initial Filing

JONATHAN E. NUECHTERLEIN
General Counsel
ANGELEQUE P. LINVILLE, Tex. Bar No. 24058793
JASON C. MOON, Tex. Bar No. 24001188
ANNE D. LEJEUNE, Tex. Bar No. 24054286
EMILY B. ROBINSON, Tex. Bar No. 24046737
Federal Trade Commission
1999 Bryan Street, Suite 2150
Dallas, Texas 75201
(214) 979-9378;jmoon@ftc.gov (Moon)
(214) 979-9381 ; alinville@ftc.gov (Linville)
(214) 979-9371 ; alejeune@ftc.gov (LeJeune)
(214) 979-9386; erobinson@ftc.gov (Robinson)
(214) 953-3079 (Fax)
Attorneys for Plaintiff
FEDERAL TRADE COMMISSION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Federal Trade Commission;
Plaintiff,
v.
Vemma Nutrition Company, a corporation;
Vemma International Holdings, Inc., a
corporation;
Benson K. Boreyko a/k/a B.K. Boreyko,
individually and as an officer of Vemma
Nutrition Company and Vemma International
Holdings, Inc.; and
Tom Alkazin, an individual;
Defendants, and
Bethany Alkazin, an individual;
Relief Defendant.
No. ----------------
APPENDIX- VOLUME IV
App. 1459-1789
MEMORANDUM OF POINTS
AND AUTHORITIES IN
SUPPORT OF PLAINTIFF'S EX
PARTE APPLICATION FOR
TEMPORARY RESTRAINING
ORDER WITH ASSET FREEZE,
APPOINTMENT OF A
RECEIVER, AND OTHER
EQUITABLE RELIEF, AND AN
ORDER TO SHOW CAUSE WHY
A PRELIMINARY INJUNCTION
SHOULD NOT ISSUE
UNDER SEAL
Case 2:15-cv-01578-JJT Document 13 Filed 08/17/15 Page 1 of 140

TABLE OF CONTENTS
Title App.#
VOLUME I
Declaration of Federal Trade Investigator Matthew Thacker 1
• Arizona Corporation Commission Records 31
• Arizona Dept. ofEconomic Security Records 119
• Wells Fargo Bank Business Records (intentionally omitted,
available upon request)
128
• American Express Business Records 440
• Undercover purchase documents 525
0 "This is Vemma" Success Magazine 554
0 YPR Magazine 614
VOLUME II
• Undercover purchase documents - continued 698
0 Vemma FlipBook 698
0 Vemma Affiliate Action Plan 720
0 Vemma Scientific Resource Guide 764
• www.vemma.com web capture 781
0 Vemma Compensation Plan 822
0 Vemma Affiliate Agreement Terms and Conditions 840
• achieve.vemma.com 850
• myroadma,gtosuccess.com 855
• The Vemma Training Bible 879
• www.businessforhome.org 913
• Screenshots from captured videos 918
• Vemma Back Office, www.vemma.com/backoffice 927
• www.vemmanews.com 936
0 New Two & Go Training Video with Tom Alkazin
936(pdf)
2

0 New Vemma Flipbook 970
• Transcripts of video and audio recordings 997
0 Welcome to Vemma With BK Boreyko 997
0 "Your First 7 Days" - 04 Mindset Number One 1104
0 "Your First 7 Days" - 05 Stepping Around Mindset
1011
Number One
0 Undercover Telephone Contact Between Matthew
1019
Thacker and David Treat
0 Vemma Event - Pleasanton California 1030
VOLUME III
0 "Opportunity and Fast Start" Vemma Training Event,
1047
Dallas, Texas
0 Tom Alkazin-24 Hour Overview Call 1092
0 BK: Our Plan to Exceed Your Expectations 1105
0 Vemma - New Customer 1120
0 Vemma Affiliate Marketing Text Invite - Vemma
1127
App
0 Welcome to Vemma! Your Journey to Success
1133
Begins Here!
0 3 Step Plan - How 8 People Can Change Your Life 1140
0 Darik Alexander 1146
0 Verve Text Invite- Vemma App 1155
0 YPR Radio - Luke Hessler 1160
0 Jed Buenaluz on Leading by Example from Verve
1170
Leadership Academy - Vemma
0 Message ofthe Month - Blake Stauffer 1181
0 NickPtak 1194
0 YPR Radio - Brad Alkazin Full Length 1204
0 Verve Mobile Text Invitation to Learn How Young
1216
People Are Having Fun and Making Extra Cash
0 Zero to Sixty: a Start-up Business Action Plan for
1222
Young People Self-employment, with Alex Morton
0 How Vemma Pays You 1231
0 Step 1- "Dream Big Dreams" 1238
3

0 Step 4 - "How to Lead with Vemma, Verve, and Bod-
1253
e"
0 Step 5 - "Leading with Vemma Business" 1266
0 Step 6 - "Goal Setting - Your First Objectives" 1276
0 Step 8 - "Time for Action: Home Events & Your
1289
Checklist"
0 TK Kubvoruno on YPR Radio Season 2 with Eric
Thomas - Learn How TK's Why Drove Him to 1296
Success
0 New Two & Go Training Video with Tom Alkazin 1315
0 BK's Blog Why Now is the Time to Build 1336
0 First Vemma Live Call of2015 video 1343
0 May 2015 Vemma Live Call video 1354
0 New Affiliate Marketing Business Model with
1382
Customer Perks Added
0 BKs Blog CEO ofVemma Nutritional Company
1389
Speaks on Why to Join Vemma
0 February 2015 Vemma Live Call Video 1396
0 Vemma Success Alex Morton 1407
0 Vemma Business Vemma Presentation with Top 1420
Leader Tom Alkazin
0 BKs Blog Interview with Bryce Madjick and Luke
1432
Kish
0 Vemma Nutrition Company Marketing and Sales
1445
Business Plan for Premium Supplement Products
0 BK Boreyko Talks to Parents 1452
VOLUME IV
0 BKs 2014 Halftime Report 1459
0 Why a Game Plan with Ruth Elliott 1483
0 Matt Morrow - Verve in Simple Terms 1490
0 Star Pinnacle Tom and Bethany Alkazin Vemma All
1496
In 2014
0 Darik Alexander - Ambassador Michelle Barnes 1502
Expert Declaration of Stacie A. Bosley, Ph.D. 1522
4

Declaration of Bonnie Patten 1566
• Roadmap to Success 1568
• Italian Decision from the Italian Competition and Markets
1612
Authority (intentionally omitted, available upon request)
• Translation ofthe Italian Decision 1611
Declaration ofAdam Fracassi 1629
• "Everybody Deserves Great Health" Booklet 1631
• Audio Recording ofthe Michigan Event (intentionally
1651
omitted, available upon request)
• Michigan Event Transcript 1652
• Corrected Michigan Event Transcript 1690
In reNew Vision International, Inc. 1781
"How to Get Paid with Vemma - Vemma Home Event Video Show
1789
This Last" landing page, www.vemma.com
VOLUMEV
• Video and Audio Recordings
0 Welcome to Velllina with BK Boreyko 1790
0 "Your First 7 Days" - 04 Mindset Number One 1791
0 "Your First 7 Days"- 05 Stepping around Mindset
1792
Number One
0 This is Vemma 1793
0 Removal of Auto-Delivery 1794
0 Undercover Telephone Contact Between Matthew
1795
Thacker and David Treat
0 Undercover Telephone Contact with Vemma
1796
Customer Service
0 Vemma Event - Pleasanton California 1797
0 "Opportunity and Fast Start" Vemma Training Event,
1798
Dallas, Texas
0 How to Get Paid with Vemma - Vemma Home Event
1799
Video Show This Last
0 Tom Alkazin-24 Hour Overview Call 1800
0 BK: Our Plan to Exceed Your Expectations 1801
0 Vemma - New Customer 1802
5

0 Vemma Affiliate Marketing Text Invite- Vemma
1803
App
0 Welcome to Vemma! Your Journey to Success Begins
1804
Here!
0 3 Step Plan - How 8 People Can Change Your Life 1805
0 Darik Alexander 1806
0 Verve Text Invite- Vemma App 1807
0 YPR Radio - Luke Hessler 1808
0 Jed Buenaluz on Leading by Example from Verve
1809
Leadership Academy- Vemma
0 Message of the Month - Blake Stauffer 1810
0 Nick Ptak 1811
0 YPR Radio- Brad Alkazin Full Length 1812
0 Verve Mobile Text Invitation to Learn How Young
1813
People Are Having Fun and Making Extra Cash
0 Zero to Sixty: a Start-up Business Action Plan for
1814
Young People Self-employment, with Alex Morton
0 Step 1 - "Dream Big Dreams" 1816
0 Step 4 - "How to Lead with Vemma Verve and Bod-
1817
e"
0 Step 5 - "Leading with the Vemma Business
1818
Opportunity"
0 Step 6- "Goal Setting- Your First Objectives" 1819
0 Step 8 - "Time for Action: Home Events & Your
1820
Checklist"
0 TK Kubvoruno on YBR Radio Season 2 with Eric
Thomas - Learn How TK's Why Drove Him to 1821
Success
0 New Two & Go Training Video with Tom Alkazin 1822
0 BKs Blog Why Now is the Time to Build 1823
0 First Vemma Live Call of2015 video 1824
0 May 2015 Vemma Live Call video 1825
0 Living the Vemma Lifestyle 1827
6

0 New Affiliate Marketing Business Model with
1828
Customer Perks Added
0 BKs B1og CEO of Vemma Nutritional Company
1829
Speaks on Why to Join Vemma
0 February 2015 Vemma Live Call 1830
0 Vemma Success Alex Morton 1831
0 Vemma Business Vemma Presentation with Top
1832
Leader Tom Alkazin
0 BKs Blog Interview with Bryce Madjick and Luke
1833
Kish
0 Vemma Nutrition Company Marketing and Sales
1834
Business Plan for Premium Supplement Products
0 BK Boreyko Talks to Parents 1835
0 BKs 2014 Halftime Report 1836
0 Why A Game Plan with Ruth Elliott 1837
0 Matt Morrow - Verve in Simple Terms 1838
0 Star Pinnacle Tom and Bethany Alkazin Vemma All
1839
in 2014
0 Darik Alexander- Ambassador Michelle Barnes 1840
7

Dated: August 17, 2015
Respectfully submitted,
JONATHAN E. NUECHTERLEIN
General Counsel
ANGELEQUE P. LINVILLE, Tex. Bar No. 24058793
JASON C. MOON, Tex. BarNo. 24001188
ANNE D. LEJEUNE, Tex. Bar No. 24054286
EMILY B. ROBINSON, Tex. Bar No. 24046737
Federal Trade Commission
1999 Bryan Street, Suite 2150
Dallas, Texas 75201
(214) 979-9378;jmoon@ftc.gov (Moon)
(214) 979-9381; alinville@ftc.gov (Linville)
(214) 979-9371; alejeune@ftc.gov (LeJeune)
(214) 979-9386; erobinson@ftc.gov (Robinson)
(214) 953-3079 (Fax)
Attorneys for Plaintiff
FEDERAL TRADE COMMISSION
8

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MATTER NO. 14232308
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TITLE VEMMA11
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DATE RECORDED: DATE UNKNOWN14
TRANSCRIBED: FEBRUARY 28, 201515
REVISED: AUGUST 3, 201516
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In the Matter of: )3
Vemma ) Matter No. 14232304
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Date Unknown7
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The following transcript was produced from a11
digital file provided to For The Record, Inc. on February12
23, 2015.13
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App. 1461

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P R O C E E D I N G S1
- - - - -2
BK’S 2014 HALFTIME REPORT3
(Music playing.)4
MR. BOREYKO: (Inaudible).5
(Applause.)6
MR. BOREYKO: Hey, Team. What a -- hey, you’re7
cutting into my time. What a great day so far. It’s8
only going to get better. Darren Hardy, is that guy not9
amazing?10
(Cheers and applause.)11
MR. BOREYKO: How many of you guys like Rex12
Crain?13
MR. BOREYKO: I’m telling you, I never have15
booked a speaker before by just meeting with him, and it16
was like I met with him on Monday or something, and I’m17
like, damn, you are good; get up in front of those18
people. But he -- he is -- he is talented.19
But, hey, guys, I am here. It is June 2014,20
and as your head coach, it’s halftime, you know, and21
great coaches, they -- they praise and they point out22
what you guys have been doing great and -- and, more23
importantly sometimes, they also show, hey, we need to do24
this better. We can improve here; we can get to the25
App. 1462

6
MR. BOREYKO: You know, I want to -- I want to1
just take you back six months and -- and talk a little2
bit about what we have accomplished in the last six3
months and then what we’re going to accomplish in the4
next six months. And you know what, we successfully --5
we made the decision in the end of 2013, we began the6
transition to affiliate marketing in 2014; we7
successfully transitioned 48 countries around the world8
to our affiliate marketing business model. And -- and9
how many people believe that’s a good thing?10
MR. BOREYKO: Just a couple, six, seven weeks12
ago, 10,000 affiliates in one place celebrating our13
convention in Las Vegas, and it was -- it was the biggest14
and best event in my career, in my life, that I have ever15
been a part of. And I just want to thank you guys for16
being there and thank you guys for showing up --17
MR. BOREYKO: -- because it was -- how many19
people were there?20
(Cheers.)21
MR. BOREYKO: It was -- it was something. It22
was something. I can’t even -- you know, you experience23
that and then you think to yourself, what is 16,000 going24
to be like? You know, because this is sort of25
App. 1463

7
exponential growth; it’s not linear growth. And -- and,1
so, you put another 6,000 people, you’re going to have2
like ten times the excitement level, especially when3
they’re all in -- in one room.4
But, you know, some of the things that we5
accomplished so far this year is we, at that event, had6
our most successful product launch. You heard Mark7
talking about it, ReMIX, half a million cans in, what,8
six weeks, it’s been? Just crazy.9
(Applause.)10
MR. BOREYKO: Half a million cans in six weeks.11
MR. BOREYKO: You know, this is -- this is live13
on uStream. This can’t be edited, you guys. So, you got14
to -- when you feel it, when you feel it, mean it, you15
know? Don’t just (demonstrating). This is not a golf16
match, okay? This is your life we’re talking about here.17
This is your business.18
MR. BOREYKO: All right. Hey, sometimes --20
sometimes great coaches have to yell a little bit. All21
right. Don’t make me Popovich you.22
(Laughter.)23
MR. BOREYKO: I’ll come out there. Anyways,24
and if -- and if you think back before that, we -- we25
App. 1464

8
launched Renew in January, and then what a phenomenal,1
phenomenal product. The reason I love that Renew is in2
the variety pack is it’s got like a non-caffeinated3
version. You got Par-tea, which is a half-caff; and then4
you got the regular Verve, and then you got the Bold.5
And -- and when the Mojo comes out in the6
eight-ounce can, we will add it to that. We’ll take7
something out and we’ll put something in. So, the only8
reason it’s not in there is because the can’s like this9
big (demonstrating). You know, but here’s my problem, is10
I suck that thing down like it’s an eight-ounce, like11
it’s a Verve shot, I suck it down so fast. It’s one of12
my favorite products. Well, actually, they’re all my13
favorite products.14
But, anyways, so we launched Mojo; we launched15
this variety pack. I think that’s going to be absolutely16
huge. And -- and, you know, you heard Mark talk about17
the auto-delivery, I’ll talk about that a little bit18
later because it’s -- it just is like the perfect product19
for that because, I mean, who doesn’t like options in20
life? And -- and -- and this is -- you know, you guys21
invested a weekend of your life to come to Miami. Those22
of you that are watching on uStream, I -- I want you to23
walk away from this event with the best chance at success24
possible.25
App. 1465

9
And -- and this is what -- you know, I always1
think -- you know, I was -- since I was seven years old2
and my parents got involved in Amway, I mean, I have been3
conditioned, I have been brainwashed to think like you4
think. I have been -- it’s just something that is in my5
DNA to think like you think. And, so, when I’m looking6
at this business from a business model, and I’m saying,7
what would I do to get great at this business, what would8
I do to give myself the best chance at success?9
This is -- this is what I do. Obviously, you10
know what, you don’t have to buy an affiliate pack, but11
you have to buy an affiliate pack. I mean, people,12
listen to me, if you -- if you just want to be casual, if13
you don’t want to get serious about this, it’s cool, just14
go and do your thing, but if you want significant change15
in your life financially, you need to have some product.16
Get the affiliate pack.17
When you’re starting this business out, when18
you’re talking to people, you’re -- you are crafting,19
when that -- you get that brand new affiliate started,20
guess what, it’s like there’s a clock ticking, and guess21
what that clock is doing, that clock is their story and22
how fast they build, how much success that you can bring23
to them.24
And, so, it’s like a gun goes off and let’s go.25
App. 1466

10
And, so, the way that you want people to get started is1
with the best chance of success, buy an affiliate pack,2
whatever one you want to buy, buy an affiliate pack.3
And, you know, you heard Mark talk about Subway4
sandwiches. If you opened up a Subway and you didn’t5
have the meat and you didn’t have the buns, they’d call6
you crazy. And people get into this business and they7
don’t have any product. And they’re like, I don’t know8
why I’m not more successful. The whole foundation of9
this company is based upon product. We’re a product-10
driven opportunity.11
Here’s the great thing. People love our12
product. Here’s the better thing, if you don’t love it,13
I’ll give you your money back. This is like just get set14
up, because one of the things that my dad taught me years15
ago in this business is you got to work with the people16
that deserve it, not that need it.17
And that sounds a little mean, because18
everybody needs it, everybody says they -- they want it,19
but -- but you’re looking for -- remember what I said20
last night, you get paid on results; you don’t get paid21
on effort? And for those people that raised their hand,22
say, hey, hey, I’m stepping up, I’m going to get myself23
an affiliate pack. That is like -- as a leader, that’s24
like, hey, they just shot a flare gun off and that’s25
App. 1467

11
where you need to put your time. Now, if they say, hey,1
I want to start with this little variety pack and I’m2
going to be good, you know what, look for the flares in3
your business, all right?4
Now, after you’ve done your affiliate pack, you5
need to get on an auto-delivery order. Do the two --6
what I would do is I would get four of those variety7
packs, two cases, 120 points. That is like your trump8
card. That makes sure that you’re qualified. And here’s9
the thing, yes, you can qualify with customers, but you10
know what, sometimes customers don’t order and they don’t11
tell you they don’t order, and all of a sudden you’re12
like, hey, I didn’t get -- I wasn’t qualified. And all13
of a sudden you take a positive into a negative, but this14
is why -- besides that, this is why you need to have that15
-- those four variety packs coming to you every day16
because you are in business and you need to have a17
constant influx of product.18
And the great thing about that variety pack is19
when you get a brand new person started, typically when20
somebody buys something, when do they like to receive it21
approximately? What kind of time frame? Now? Hey, just22
say, here, this is -- here’s an affiliate -- here’s a --23
here’s a variety pack, here’s, you know, a sampling of24
our six, two of our six top products. That gets them25
App. 1468

12
started.1
They go home with that from your home event.2
You have it; you can get it replaced. Or you could sell3
it to them for $35. Hey, for thirty -- and -- and4
especially, you know, with this business is all about5
sorting. You know, you just -- you’re just having6
conversations and sorting. And -- and, you know, how did7
you guys like the dittoTalk, talking about having8
conversations?9
MR. BOREYKO: Well, what Mike didn’t tell you11
is that I made a six-figure investment into your business12
to buy the exclusive rights for the energy drink and the13
weight-loss categories so that you guys will be the only14
--15
MR. BOREYKO: -- that’s (inaudible).17
MR. BOREYKO: But besides -- you know what,19
besides all that, besides all that, you know, this --20
this -- the first -- the first half of 2014, we actually21
moved into a brand new home office, and that was a --22
that was a big job. We did it over a weekend. We didn’t23
have any interruption in service. We opened Saturdays.24
You know, now we have Saturday customer service. And --25
App. 1469

13
and anybody that has been through home office, it just1
has that wow factor.2
And -- and, you know what, a lot of companies3
say they’re going to be here the long term, but, you4
know, my -- my dad used to tell me, what you do speaks so5
loudly, I can’t hear what you’re saying. And -- and6
when you look at our investment into our infrastructure7
with -- with manufacturing, and I’ll talk about that in8
just a minute here in our home office and in our9
computers, I mean this is -- and our mobile devices. You10
know, I’ve spent almost a million dollars on mobile11
platforms and I give it away to you for free. And, so,12
that is -- that’s investing in your --13
MR. BOREYKO: -- in your -- but when you guys15
think about it, in the first half of 2014, as your coach,16
you fricking rocked. You did an amazing job. You17
deserve to be applauded, but here is what I’m here to18
tell you today is you can do better. How many people19
believe they can do better?20
MR. BOREYKO: Because here is -- here’s what --22
here’s what Popovich, when he’s -- when he’s talking to23
the Spurs and they’re up by whatever number they’re up24
by, guess what his -- I know, I know, I know, but here,25
App. 1470

14
this is the analogy, okay? I wish I could use a Heat1
analogy, but you lost three games by 55 points.2
But here, this is what -- hey, you want to3
learn the secret? You want to learn the secret? This is4
what Popovich tells his players: play like you’re5
behind. I don’t care what you’ve done in the first two6
quarters. Your attitude should be play like you’re7
behind. And that is -- that is what’s so -- that is8
what’s so important, because, you know, you know, Darren9
Hardy, I was listening to his VIP training yesterday,10
absolutely phenomenal, and when I listened to him, I hear11
the words from my dad when my dad used to say, Son, the12
problem with this business is it’s too cheap to get in.13
It’s too cheap.14
Darren laid out all of the different options15
that an entrepreneur has. Now, if you’re an employee,16
that’s a whole other story, but if you’re an17
entrepreneur, here are some of the options. You could18
buy a franchise; you could spend $100,000 after tax; you19
could spend a couple hundred, $250, $300, $1 million20
after tax to buy a franchise.21
Now, let me ask you this question, if I changed22
the deal and I said the affiliate packs are now 100 grand23
to get them, how -- how -- how different would your24
attitude be towards how you approach this business? And25
App. 1471

15
that’s all I’m talking about is the attitude. I know 5001
bucks to a lot of you, that’s a lot of money, but -- but2
what I’m after is I’m after $100,000 attitude. I’m not3
after a $500 attitude.4
And -- and that is the attitude that we need to5
approach third and fourth quarters with. You know,6
here’s what we’re up to. Here’s what we’re up to at home7
office. You heard -- you heard Mark talk about our8
investment into our infrastructure, manufacturing plant,9
adding a second canning line, the second -- you know, the10
first canning line is -- is Italian; the second canning11
line is German. The second canning line will be up to12
speed next month and running, 23 cans of Verve a second.13
MR. BOREYKO: Almost -- this thing can kick out15
almost a case a second. How am I thinking about what16
your business is going to be like a couple of years from17
now?18
MR. BOREYKO: You know, this dittoTalk, this20
dittoTalk, Mike was right, it has exploded the -- the21
whole Bode line. We are putting in -- it will be up next22
month -- our own shake, powder-fill line. When you guys23
come for the go -- go to -- Go for Gold, you’ll be able24
to tour through the manufacturing, and you’ll be able to25
App. 1472

16
see this kind of investment into your business because we1
are partners.2
And -- and you know what, you heard Rex talk3
about partners. You want -- you know, you want parasites4
or you want partners? All you want is -- all you want is5
partners in this business. And you need to count on me6
to be making the right decisions for the right reasons,7
and I need to count on you. I need to count on you to go8
at this business like you’re going to work so you could9
set yourself up for the rest of your life. Work hard,10
two years, three years, four years. It might take you11
five years.12
You know, I was -- I was -- you know, people13
that are in school, they -- they commit four years to14
an education, and they’re not making any -- they’re15
paying money; they’re not making money but they’re paying16
money. And I’m all about staying in school, okay? I17
don’t want to tell anybody don’t stay in. School is18
awesome. It’s all about networking; it’s all about19
taking classes for -- you know, for -- that’ll help you20
in business.21
But the analogy I want to give you is the fact22
that they commit to four years to school; they pay, what23
do they come out, $25-, $50,000 in debt? Class of 2014,24
17 percent of them have jobs lined up, 17 -- 83 percent25
App. 1473

17
are like, hello, world.1
On-screen:2
Source: http://nypost.com/2014/05/11/fewer-3
college-grads-will-have-jobs-lined-up-this-year/4
MR. BOREYKO: And -- and -- and what we want to5
do with Verve is we just want to give them a Plan B. You6
know, we just want to say, hey, do this part-time, do7
this on the side. It could turn into a full-time career8
income for you. It could turn into an opportunity that9
pays you more than you’ve ever dreamt or more than that10
job that you were getting trained for in school would11
ever pay you. It could.12
But if it doesn’t, you know what, what you’re13
going to be able to do is you’re going to be able to do14
is you’re going to be able to have a nice secondary15
income coming in and -- and help ease that -- paying off16
the student loan. We have a bonus that pays off student17
loans. I mean, that is our message to people that are in18
school. But when you take a look at what this business -19
- how this business can -- can change your life20
financially, relationship-wise, physically, what we’re21
doing here, it’s a big deal. It’s a real big deal.22
MR. BOREYKO: All right. So, here I am,24
continuing to invest in your business. You heard Mark25
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five bucks a month for Tax Bot.1
MR. BOREYKO: And -- and -- and September, you3
guys have heard me talk about the surprise announcement4
in September. You guys will be proud. It’s going to be5
big, the biggest thing. My -- my goal is to make Vemma a6
household brand name. This is a huge step towards that,7
and -- and -- and here’s what I need you to do. We’re8
doing all of this, but here’s what I need you to do,9
team, is I need you to get great at -- at this business.10
You know, I talked about this last night.11
The best product, the most amazing worldwide12
biggest market ever product that we have is a product13
called hope. And -- and that’s what I need you guys to14
get great on. It’s something that is -- is extremely15
important to what we do, and when you -- when you think16
about tapping into that biggest market ever, you think17
about the fact that there’s people out there struggling,18
and -- and I know what you guys are about. If you see19
somebody drowning in financial debt and you’ve got a life20
preserver, you got to throw it to them. They may not21
grab it, but that’s not your job.22
What’s our job? We got to -- we got to give23
them a chance. We got to give them a shot. And, yes,24
you know, we’re all about making people healthy with25
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these amazing, innovative products that you can’t find1
anywhere else, but a big part of the core of this2
business is that we teach people how to earn part-time3
and full-time income. How to own their own business4
without the hassles and pressures of conventional5
business ownership.6
And -- and you can run this whole business from7
your mobile devices. It’s -- it’s an amazing opportunity8
that we offer people, and, you know, I talked about this9
earlier, when you -- when you’re talking to people, this10
business is about conversations, it’s a sorting process.11
You’re just sorting through people, and you’re12
discovering that people fall into three groups. There’s13
people that are into health, and they’d be great14
customers. And I know with this move to -- to affiliate15
marketing and a lot of people have been talking about,16
hey, customers, that’s great.17
I mean, but we’re mining for gold, and we’re18
looking for those -- those entrepreneurs. But when you19
find a silver nugget, you don’t throw it away. You say,20
hey, that’s great, that’s a byproduct of our business.21
And -- and, so, those customers are like silvers --22
silver, but the -- but the affiliates, man, they are like23
gold and you got to treat them like gold.24
And, so, you’re going to find people that are25
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into health make great customers. You’re going to find1
these nuggets of gold, these people that are2
entrepreneurial, they’re people that have this desire to3
-- to get out of their job, pay off their debt, have --4
have leverage in their life, time freedom, money freedom.5
And -- and that is the people that we’re looking for.6
And then you’re going to find the third group.7
So, the first group is customers; second group are these8
entrepreneurs; the third group are these people that9
think their idea of health is like lite beer and Sweet’N10
Low. And I can’t really help them, you know? They just11
think we’re crazy, and they’re just -- that is just what12
it is. But -- but don’t be surprised when people fall13
into these three different categories, you know? Because14
-- because that’s what we’re doing, we’re sorting through15
people here.16
So, you know, the biggest thing that we need to17
work on is the attitude. And I talked to you about the18
fact that you got to approach this like you’ve invested19
$100,000 into it. And -- and if you -- if you think like20
that you’re going to act different.21
So, let me coach you on -- I’ll put my22
affiliate hat on, and I want to coach you the best way23
for you to become successful in Vemma. And -- and with24
this -- you know, this transition to affiliate marketing,25
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there was some questions that came up and there was a1
little bit of confusion, and they’re like what do I need2
to do. And here’s our simple plan. And it’s buy an3
affiliate pack; get your two case auto-delivery order,4
because that’s your trump card, that makes sure you’re5
qualified for everything.6
And -- and here’s the -- here’s the amazing7
thing, is when your order comes in, it drives activity.8
All of a sudden, when you have product, guess what you9
think about. You think about product. You know, and you10
saw my blog last -- last week with Jerry Dowd. And Jerry11
Dowd I got to give it up, I don’t know if he’s still12
here, he might be taking Rex to the airport. He’s the13
one that brought Rex into my office and said, hey, you14
got to meet with this guy -- Rex Crain.15
And -- and he had that little sampling system.16
It was so -- it was so easy. And here’s the great thing17
about when you give somebody a can of Verve, pretty --18
pretty much they love it. You know, pretty much, they go19
this is -- this is great, and this is good for me. And,20
so, your auto-delivery drives your activity, and, yes,21
you know, customers can take care of that for you, but22
don’t miss this point, and the point is, you’re in23
business.24
You are the CEO of your own business, and if I25
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ran this business without product in my warehouse, you1
guys would think I was crazy. And yet we come to a home2
event and guess what, nobody’s got any product. We ran3
out of product. We had product backstage. I’m coming,4
can I have a can of Verve, and they’re like we have one5
left. And I go, you have one left, are you crazy? We6
need more product. That’s how I want you guys thinking7
here.8
But -- and like I said, I would do -- my two-9
case auto-delivery would be that four variety packs. I10
just think those are the coolest thing ever. You never11
get burned out on the product. You know, maybe -- you12
know, I was talking to Josh Noble. He goes, I’m going to13
do two variety packs and a case of Bold because I love14
Bold. And I said that’s cool, you can do that, do15
whatever -- just buy.16
So, here’s our -- here’s our simple -- you17
know, and -- and -- and here is the great thing about it18
is when you have a variety pack you can sell it, you can19
use it, and you can share it, and you can sample, you can20
do all these kinds of things. But here’s our simple21
plan. Number one, buy an affiliate pack. Number two,22
find three people that see what you see in this business23
in your first week. Remember, you got that 24-second24
shot clock in a basketball game. That’s what brings25
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excitement. We got this thing called a frenzy bonus and1
a double frenzy bonus, that all that does is bring2
excitement to your business here.3
So, find three people that see what you see in4
this business. You might find three or four or five5
customers, but find three affiliates and get them to buy6
an affiliate pack. And guess what, you’re going to make7
approximately 700 bucks. Wow, you got your money back8
for your -- your -- your business, you’re fired up, and9
you got three great people that have raised their hands10
saying I want significant change financially in my life.11
MR. BOREYKO: Third thing, third thing: Get13
car qualified. If I’m going to give you 400 bucks a14
month to go get yourself a car so you can feel good, and15
here’s what’s great about the car is it actually helps16
your business because people look at you and they go,17
you’re driving that? What, maybe I should sit down with18
you. You know, nothing feels better when you go by your19
friend’s house that laughed at you and honk, at like 2:0020
in the morning.21
No, don’t do that. Don’t do that. Don’t send22
me letters.23
And then here’s the thing. So, you get24
yourself in a car and then you help five people get in a25
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car, you’re making $50,000 approximately in residual1
income. And that is our plan. That’s it.2
MR. BOREYKO: And the more you do it, the more4
you get. But here’s the -- here’s the -- here’s the --5
here’s the trick. The more you don’t do it, the less you6
get. It’s easy to do, but it’s also easy not to do.7
It’s a simple plan. It does take work. But you know8
what, when you love what you do, you never have to work9
another day in your life. And I love what I do. I love10
you guys. And we got to make this thing.11
MR. BOREYKO: Third -- third and fourth13
quarters, let’s win this game, guys. Thank you very14
much.15
(Music playing.)17
(The video concluded.)18
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C E R T I F I C A T I O N O F T Y P I S T1
2
MATTER NUMBER: 14232303
CASE TITLE: VEMMA4
TAPING DATE: DATE UNKNOWN5
TRANSCRIPTION DATE: FEBRUARY 28, 20156
REVISION DATE: AUGUST 3, 20157
8
I HEREBY CERTIFY that the transcript contained9
herein is a full and accurate transcript of the tapes10
transcribed by me on the above cause before the FEDERAL11
TRADE COMMISSION to the best of my knowledge and belief.12
13
DATED: FEBRUARY 28, 201514
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SARA J. VANCE17
C E R T I F I C A T I O N O F P R O O F R E A D E R18
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I HEREBY CERTIFY that I proofread the transcript for20
accuracy in spelling, hyphenation, punctuation and21
format.22
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ELIZABETH M. FARRELL25
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WHY A GAME PLAN WITH RUTH ELLIOTT ON VIMEO24
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Date Unknown7
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WHY A GAME PLAN WITH RUTH ELLIOTT ON VIMEO3
RUTH ELLIOTT: Are you ready for the business4
of the 21st Century? Can you see the benefits of5
creating and controlling your own economy? If so, let’s6
get started.7
Hi, my name is Ruth Elliott. And several years8
ago when I was new to this networking industry, I found9
myself confused by bonus plans. I loved the concept of10
creating a second income without having to take on a11
second job, but I got lost in the details. You see, most12
people ask the question, how does the compensation play?13
I asked, what do I need to do to earn it and can I do the14
first step?15
Simple concepts and following a suggested game16
plan were the keys to my early success. And I’m here to17
share what made my success possible with you.18
With Vemma, building two teams of people begins19
by finding two people. You’re not limited to two, but if20
you could only choose two, who would they be? You will21
probably find their names in your cell phone. There will22
be a sense of urgency and excitement you feel when23
looking for your first two brand partners. This creates24
momentum and duplication is set in motion.25
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of our flagship product Vemma for personal use and a1
Vemma V2 fridge brick, which is 30 individual servings of2
our unique formula. This allows you to introduce the3
flagship formula to those in your life every month rather4
than a one-time run off prospecting.5
Keep it simple with an initial interest in our6
physician formulated, clinically studied nutrition7
program and encouraging your brand partner to increase8
their auto delivery to include additional products.9
Now that you have a game plan, a simple two-10
step message and concepts that keep you focused on11
networking, your teams can develop to its fullest. Two12
brand partners find two brand partners and so on,13
creating two teams of people and adding depth to the14
organization. If you begin to build your teams based on15
product sales rather than on the simple two-step message16
of “take a shot, tell two,” then your teams may begin to17
look like a structure that is missing half the message.18
You can see with this plan you’re also earning 10019
percent of your own effort. This outcome is more like a20
penny added every day for 30 days.21
The duplication, the penny doubled every day22
and the simple two-step message powers the game plan.23
You see, the fortune comes from the middle.24
Today, there are brand partners taking this25
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concept and earning $100, $1,000, $10,000 or more per1
week. It’s working for them and it can work for you.2
Timing is right like never before to take3
advantage of an income tied to word-of-mouth advertising.4
Some research suggests that Americans are exposed on an5
average to over 3,000 ads per day. How many do you6
remember from yesterday? Ad clutter increases every7
year, through TV, radio, Internet, billboard, print,8
direct mail, et cetera, with less and less impact. Word-9
of-mouth, that referral from a friend will be the wave of10
the future.11
You’ve found the right company, the right12
product and the right opportunity to take advantage of13
this incredible business of the 21st Century. So, what14
are you waiting for? It’s time to get started.15
(The recording was concluded.)16
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2
CASE TITLE: VEMMA4
TRANSCRIPTION DATE: JULY 20, 20156
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DATED: JULY 20, 201513
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format.22
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SARA J. VANCE25
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MATTER NO. 14232307
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TRANSCRIBED: JUNE 9, 201515
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Date Unknown7
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2015.13
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VIDEO - VEMMA IN SIMPLE TERMS3
MATT MORROW: All right, world of Youtube.4
This is Matt Morrow, and I’m driving in my car. And what5
I decided I was going to do is I’m going to create the6
single best Vemma presentation in history right now in7
this t-shirt, with this hat, on Highway 93, on my way to8
the lakehouse for 4th of July.9
And this is the thing. In the last two weeks,10
I have earned $59,500. Results are not typical. But,11
you know what, they’re results. They’re my results.12
Your results may vary. But I want to show you a business13
where those kind of results are possible. Because in14
most jobs, those results aren’t even possible. How do I15
do it? It’s the most simple thing in the world. I drink16
Verve.17
What’s Verve? Verve is an energy drink. It’s18
ten times better than anything else out there. It has19
all the vitamins, all the minerals, antioxidants, aloe20
vera. It tastes great. It’s about the same price, a21
little bit more expensive than all the crappy drinks that22
are its competition.23
You drink one every single day. You buy 48 of24
them a month. So that’s 30 that you drink, you’ve got 1825
App. 1493

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to hand out. You get two other people to do the same1
thing and you repeat that a few times. It’s a network.2
It’s so simple. Marketing to one’s network. You already3
know people who drink. You already know people who have4
$5 a day they piss away on Starbucks or something else.5
Five dollars a day is all this business costs for your6
product and for samples.7
So what we’re trying to get you to do is have8
people watch this video. Now, it may not be the most9
friendly video. It may not be the best quality video.10
But the facts, it’s five bucks a day for a business that11
gets you healthy. I haven’t been sick in seven fricking12
years. I used to take antibiotics all the time. It’s13
good for you, clinically proven to boost immune function.14
Drink it. It tastes good. It’s good for you. And get15
two other people, say, hey, dudes, you want to make16
money? All you gotta do is have people watch this video.17
You know, if you show this video to ten people18
and five of them say, yeah, I got five bucks a day, I’d19
like to make 60 grand in two weeks, who wouldn’t? Oh, it20
sounds too good to be true. If it sounds too good to be21
true, it is. No. If it sounds too good to be true, you22
have no fricking idea how good it can get. That’s how it23
is. This is the Internet time, baby. Everybody is24
connected.25
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CASE TITLE: VEMMA4
TRANSCRIPTION DATE: JUNE 9, 20156
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DATED: JUNE 9, 201513
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GEORGE QUADE16
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SARA J. VANCE25
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MATTER NO. 14232308
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DATE RECORDED: UNKNOWN14
TRANSCRIBED: JULY 17, 201515
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STAR PINNACLE TOM BETHANY ALKAZIN VEMMA ALL IN 201424
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Vemma All In 2014 46
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Date Unknown7
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B.K. BOREYKO: Hey, this next couple, you guys3
are going to absolutely love this next couple. I had the4
privilege to pay this couple and their children, in one5
month, not too many months ago, $900 -- $900,063 in one6
month. Ladies and gentlemen, our Star Pinnacle leaders,7
Tom and Bethany Alkazin.8
(Music.)9
BETHANY ALKAZIN: Wow. Oh, well, this is10
amazing. Are you guys excited to be here?11
(Cheers.)12
BETHANY ALKAZIN: Yes? Do you just feel the13
energy? I mean, it just kind of feels like it’s just14
bouncing off of you, huh? You just want to kind of take15
it all in. And guess what, it’s just the first night.16
(Cheers.)17
BETHANY ALKAZIN: We -- we have two more full18
days together. How exciting.19
(Cheers.)20
BETHANY ALKAZIN: You know, this has been so21
much fun. Last night, B.K. treated all of us to a magic22
show. We went to see the Mr. Angel guy.23
(Laughter).24
BETHANY ALKAZIN: You know, as I sat there and25
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you -- the great news tonight to share with you is that1
what it took Bethany and I almost 28 years in our career2
to find, you have found it tonight in Vemma.3
(Cheers.)4
TOM ALKAZIN: This opportunity -- the only way5
you’d know is if you’d been in the industry a long time,6
the only way you’d be able to understand how great it is7
what we have. Is this an amazing feeling tonight? Yes8
or no?9
(Cheers.)10
TOM ALKAZIN: Incredible feeling. And, so, our11
wish for you this weekend is that what’s going to happen12
for you is your belief is going to go up and that hope is13
going to be just ignited inside of your heart, because14
there are so many great people, so many great leaders.15
You’re going to have a chance to hear from so many people16
this weekend. I just hope you take advantage of every17
encounter out in the hallway, meet as many people as you18
can, because our message is simple: what’s happened for19
us can happen for you.20
The -- one of the most remarkable blessings21
that, as parents, that happened for us was the fact that22
-- that our children chose to do this business. It23
wasn’t always that way in the very beginning. And24
somebody asked me that question earlier this afternoon.25
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CASE TITLE: VEMMA4
TAPING DATE: UNKNOWN5
TRANSCRIPTION DATE: JULY 17, 20156
7
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DATED: JULY 20,201513
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SARA J. VANCE16
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MATTER NO. 14232305
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TITLE VEMMA
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TRANSCRIBED: MAY 7, 2015
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VEMMA SEMINAR WITH DARIK ALEXANDER & MICHELLE BARNES13
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For The Record, Inc.24
(301) 870-8025 - www.ftrinc.net - (800) 921-555525
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DARIK ALEXANDER: I have some people that want3
to say hi to you.4
GROUP: Hello.5
DARIK ALEXANDER: Goodbye. Okay. You ready to6
go? You can start.7
UNIDENTIFIED FEMALE: Ready?8
DARIK ALEXANDER: Yes.9
UNIDENTIFIED MALE: Ready to rock it out?10
DARIK ALEXANDER: Ready to rock it out.11
(Music playing.)12
DARIK ALEXANDER: How’s everybody doing?13
(Applause.)14
DARIK ALEXANDER: Okay. I gotta say, Eric15
Worre, wow. That put me in perspective for sure. That16
was wild. So, everybody learned how to prospect. Let’s17
get down to the nitty-gritty, right? That’s why we’re18
here. Obviously there’s quite a few people here. And I19
think it’s because we all are wanting to know how to do20
that pretty important skill.21
So, we’re going to try and break through this22
as quickly as possible. I have a lot to talk about.23
Michelle has got like 30 slides in, like, 25 minutes. I24
have no idea how that’s going to work out. But she’s25
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going to be able to pull it off, obviously.1
So, a few things I want to discuss obviously2
about prospecting that I think is going to be really,3
really, really beneficial to everyone here. But before I4
do that, I want to make sure this clicker actually works,5
because I’m pressing fast forward -- I don’t know.6
UNIDENTIFIED FEMALE: I think you have to point7
it like this.8
DARIK ALEXANDER: Oh, that’s probably why, I’m9
pointing at the screen. Nope. You want to just do it10
and I’ll just queue you?11
UNIDENTIFIED FEMALE: Sure can.12
DARIK ALEXANDER: Anyway. So -- okay. A lot13
of people talk about prospecting as this activity or14
hobby, right? Like, hey, let’s go prospect, right?15
Let’s just go do that right now. But what people don’t16
realize is -- you know what, I’m sorry, guys. I’ve got17
to take this phone call. It’s really important. It’s18
actually a prospect of mine that I have. But I’ll let19
you guys listen. How about that? Hold on.20
Hello? Hello, you there? Oh, it’s not -- it’s21
not up all the way. Hey, are you there? Oh, hold on,22
hold on. Can you hear me? Andrew, are you there?23
ANDREW: Yes, I’m here.24
DARIK ALEXANDER: What’s up, buddy? How are25
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you?1
ANDREW: Nothing much. I’m just relaxing right2
now.3
DARIK ALEXANDER: Yeah, yeah. I’m glad you4
called me, man. Well, hey, things have been well. I5
know it’s been a few days since we talked.6
ANDREW: Yeah. No, just taking (inaudible) and7
everything to talk about, you know.8
DARIK ALEXANDER: Yeah.9
ANDREW: (Inaudible) -- about it.10
DARIK ALEXANDER: Well, you know, we’ve been11
talking for like two weeks now and I know you’ve been12
working at Coca-Cola kind of doing your thing. I know13
you’re a little bit stressed with that. You obviously14
are working, you know, a lot. You’ve got like 12-hour15
days sometimes, a few dollars an hour. I can sense, you16
know, you want more out of life than what you currently17
have.18
I wanted to know, you know, we’ve talked a lot,19
you were kind of ready to get started and get things20
rolling, and obviously, you know, you had some21
liabilities you had to take care of, your rent, things22
like that. But how are you right now? How are you23
feeling with the whole opportunity?24
ANDREW: Things are going great. Things are25
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7
going great right now. Like I said, you know, my goal1
is, you know, starting to focus on Vemma more, try to2
learn more about the product. You know, you guys have3
been really great with me, for me, calling me, checking4
on me. And, you know, I really appreciate that. That5
shows a lot that, you know, you guys, you really care,6
you know, you’re out here to help others and be7
successful in this business.8
You know, like I said, you know, just watching9
you on YouTube and where you are and where you work and10
where you are today, you know, I can see that. I can see11
the change, you know, like I’m so happy about it. I’m12
really pumped about it, joining the team and really13
learning the business.14
DARIK ALEXANDER: Oh, absolutely, man. Well,15
hey, you know, I do have to go pretty soon. But, you16
know, I think -- I think what I really have seen is that17
you’re ready to invest in yourself. And I’ve got a whole18
team of leaders that are ready to invest in you if you’re19
ready to make that commitment, too.20
And, you know, that’s kind of what we wanted to21
see, you’re at that point where you’re ready to get in22
the system, to lock in some product and actually make23
that next step to better your future and potentially24
eventually getting you out of that job with Coca-Cola.25
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8
How would you feel about that?1
ANDREW: Oh, man, that would feel great.2
DARIK ALEXANDER: Okay. And the other thing I3
want to ask, too, I know we talked about the different4
products, right? You can obviously lock in with two5
cases, you know, grab a case for yourself, another to6
share, you know, we discussed how the affiliate packet,7
you qualify for a lot more bonuses. We got the 2 and Go8
plan coming out. It’s going to be ridiculous. And, you9
know, obviously the more product you get the better. So,10
did you take a look at whether you wanted the affiliate11
or the two?12
ANDREW: I’m going with the affiliate pack.13
Man, I think I’m going all in. I think that’s the best14
way to go.15
DARIK ALEXANDER: Absolutely. Okay. Well,16
hey, you remember Jake (inaudible) right, the link that17
we sent you probably a few days ago?18
ANDREW: Yes, I do.19
DARIK ALEXANDER: So, I’ll just make sure that20
he hits you up, he contacts you. And then we’ll get you21
through the system, figuring out which affiliate pack you22
want. We’ll lock you in. We’ll enter the Facebook23
groups. Within the next few days, our goal is to help24
you get your goals met as quickly as you want to go.25
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31
don’t think you understand the last three years our1
ability to reinvent the wheel has changed now. We’re not2
needing to reinvent the wheel. Vemma does it for us.3
So, that’s all I have. I might have ran over a4
little bit. I’m sorry about that, guys. But I’m going5
to let Michelle Barnes come in here and absolutely rip it6
up, guys. She has 35 (inaudible) so I appreciate it.7
(Applause.)8
MICHELLE BARNES: Hello, hello, hello,9
everybody.10
(Applause.)11
MICHELLE BARNES: All right. I want you guys12
to give Darik Alexander another huge, huge round of13
applause.14
DARIK ALEXANDER: Thank you.15
MICHELLE BARNES: Am I on?16
UNIDENTIFIED MALE: You’re on.17
MICHELLE BARNES: All right. All righty. Wow,18
what a crowd, man. You guys rock. All right, guys.19
We’re going to cruise through this. We’ve got so much20
information. I’m so glad that Darik literally set me up21
perfectly. And I’m going to say repetition is the mother22
of all learning. So, you might hear a couple things the23
same. That’s obvious, you know. When it comes to24
prospecting, if you’re good at prospecting, you’re25
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40
slides available somehow, someway. You guys can take1
pictures for sure. But we’ll figure out a way to get2
these slides to you, too, because I know I go fast.3
All right. So, this is one of my favorite4
questions I ask people. Every single person I meet I go,5
who are the two sharpest people you know, who are well6
connected and who have great relationships with everyone7
around them? Because how many of you know -- you know8
someone that’s like that person, man. Man, they’ve got9
energy for days, they know everybody, everybody loves10
them, they’re the life of the party, they’re sharp,11
they’re leaders, they’re total freaking captains. Yes?12
GROUP: Yes.13
MICHELLE BARNES: Okay? There’s captains and14
hanks. We know those -- we know captains. We all know15
captains. Everyone you know knows a couple captains.16
So, what if you’re finding out who the two sharpest17
people that you know are the day they get their business18
started? Who are the two sharpest people you know? What19
if you help them contact those people and teach them to20
invite them properly? All they need is two good ones to21
get started, right? One on the left, one on the right,22
boom, they’re bronze.23
And if there were two people on a scale of one24
to 10, these people are eights, nines and 10s and you25
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41
help them or you find a leader in your upline to help1
them, how quickly is your group going to grow and you2
recruit who you are? So, if they’re eights, nines and3
10s, they’re going to recruit more what? Eights, nines4
and 10s. You’re not limited to two guys, obviously.5
Most elites have anywhere from 25 to 60-plus personally6
enrolled. I personally enrolled 417 people in Vemma, and7
that’s all warm market, no leads, no ads, no nothing,8
nothing like that. Four hundred and 17 people. Today9
about 30 to 40 of them are still with me. And it’s10
turned into about 30,000. Not all of those are active,11
you know --12
(Applause.)13
MICHELLE BARNES: -- but here’s the reality,14
guys. Are you willing to enroll 417 people to get 3015
good ones, who will bring you thousands of amazing people16
who drink this product every day and ask people to just17
take a look at the opportunity? Okay? We’ll see.18
We all do three things, guys. We use the19
product. That’s easy. That takes up no time. I know20
the majority of you are probably doing this business21
part-time and that’s how this business is designed to be22
built, on a part-time basis until you’re making more23
money here than you are at your job or whatever. Then24
you can, you know, kiss it goodbye and fire your boss and25
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42
say peace out.1
But we all use the products, right? So, we all2
use the products. You can do that while you exist. We3
all recommend the products, okay? We use the products,4
we recommend the products. That’s another thing that5
takes up no time. The next thing we do is we invite6
people to just take a look. To just take a look at this7
business. Hey, I want you to just take a look at this.8
If it’s for you, great; if not, great.9
The guy that I met with, I almost walked out of10
my first meeting. I was so skeptical, I saw products in11
the corner, I almost turned around and walked out. I was12
like, oh, God, here we go again, some of these deals,13
Amway, Mary Kay, Shockley (inaudible). You know, so I14
was getting ready to walk out. It was an ego thing. I15
was like, I’m going to be an attorney. I’m not going to16
be a vitamin lady. This is stupid. Okay? It was a big17
ego thing.18
I was broke. I had three jobs. Life was not19
that fabulous. Okay? So, I had a really huge ego and a20
little tiny bank account and I was $80,000 in debt21
waiting tables and bartending because I was making more22
money doing that than I could with my degree. Okay?23
How many people do you know doing that, right? It’s24
crazy, guys.25
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45
from the heart. Just -- okay, cool. You get what you1
ask for. Okay?2
So many people in my team and other people’s3
teams and stuff, they go, God, Michelle, you know, I get4
a lot of people on the products, but I don’t have any5
business builders. You know, I can’t -- I just cannot6
enroll people to do the business. I don’t have anyone7
that wants to run in the business.8
And I know right away that they’re vitamin9
salespeople. They’re energy drink salespeople. You get10
what you ask for. If you ask for people to try the11
product, that’s all they’re going to do is try your12
product. If you ask them to just take a look at your13
opportunity, if you ask them to take a look at the14
business, after they take a look at the business and then15
they decide whether it’s for them or not. It’s very16
simple. Okay?17
These are the two things that I hear the most18
from a new person. I bet you the majority of you in this19
room have probably said it before. I’m just not salesy.20
How many of you heard that before? How many of you have21
heard this one: I just don’t want my friends and family22
to think I’m just trying to make money off them. How23
many of you have heard that before?24
Well, when you’re a vitamin pusher, you’re25
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46
doing the exact two things you didn’t want to do. You’re1
being salesy and you’re making money off them. So,2
introduce them to the opportunity so they can get their3
product for free and make some money. Okay? It will4
take that pressure right off.5
All right. I know we’re cranking, guys. Okay.6
Here you go. Be in a hurry, guys. That’s the first7
thing you’ve got to do. You know, like Darik was awesome8
like that. Give them a sincere compliment, okay?9
Sincere compliments go a long way.10
The reason for my call is: Just get to the11
point. If you don’t talk to someone in two years, don’t12
call and, oh, how are the -- how’s the family, how’s the13
kids, da-da-da-da-dah. Oh, by the way, crush, I’d like14
you to take a look at my opportunity. Yes, that’s15
creepy, okay? Thanks, Ben, appreciate it.16
So, be straight up right away. Hey, the reason17
for my call is I started a business on the side that I am18
really fricking excited about. And you know what, I19
thought of you because you’re super sharp, you know,20
you’ve been successful at everything you’ve ever done and21
I just think you would absolutely kill this thing. Would22
you be willing to take a look at this? Okay? Would you23
be willing to just take a look.24
That’s when you use a tool, you use an event,25
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50
kids’ names. I find out where they’re from. I find out1
what they do, what they love about it, what they hate2
about it, because then I’ve got -- right there, I can3
hand this business to them on a silver platter. If they4
hate the fact that they work so many hours and they never5
get to see their family, those are the exact reasons why6
I’m going to introduce them to this opportunity.7
Okay. So, that comes with time. And the more8
you do it, the better you’re going to get. But you’ve9
got to find those hot buttons in order to bring them into10
the business properly and get them to see what you see.11
Okay?12
In the beginning, make up in numbers what you13
lack in skill. When I started at 23 in this business, I14
sucked. Okay? I was so bad. I was so bad at15
recruiting. I was -- I was just bad. I would firehose16
the heck out of everybody. I had a mentor that said if17
you book 10 people a day to take a look at this business18
-- okay? If you book 10 people a day, you’ll make19
$10,000 a month.20
So, I said, done and done. I said, at 23 years21
old, I said, I am going to talk to 10 people a day about22
this opportunity. I’m going to book 10 people a day to23
take a look at something, a tool, an event or connect to24
my upline. I’m going to book 10 a day to make $10,000 a25
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51
month. That was something I had control over. Your1
recruiting numbers, guys, you have control over that.2
You don’t have control over whether somebody says yes or3
no. Thanks. You don’t have control over that.4
So, I talked to 10 people a day and I made5
$102,000 my first year. But I was psychotic about6
talking to 10 a day. I didn’t care whether they said yes7
or no. I just talked to 10 a day. And, guess what, when8
you talk to your thousandth person, are you going to be9
better than when you talked to your 10th?10
GROUP: Yes.11
MICHELLE BARNES: I made up in numbers what I12
lacked in skill. Those 10,000 hours to become an expert,13
just give me 20 fricking hours of really talking to new14
people. And you’ll be amazed at what happens. Yeah,15
they say 10,000 hours to become an expert in anything.16
Okay? But if I’m talking to 10 a day, am I going to get17
better before someone who talks to 10 a month or 10 a18
year?19
GROUP: Yeah.20
MICHELLE BARNES: Yeah. So, you have control21
over that. Okay?22
All right. Come on. Guys, here’s your daily23
method of operation, your DMO. At least two exposures a24
day. I realize a lot of people are part-time. At least25
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52
two people a day minimum. Income producing activity. Is1
what you’re doing right now making you money? Chrissy is2
probably laughing. I used to put stickies -- here’s3
Presidential Elite Leader Chrissy Guarina (phonetic).4
Give her a hand.5
(Applause.)6
MICHELLE BARNES: We worked in another business7
together, and so I used to -- she was a little sunny and8
liked to socialize a little too much. And it used to9
make me crazy. So, I used to go put a sticky note on her10
phone, is what I’m doing right now making me money?11
So, if that’s you, put a sticky note on your12
desk or wherever, you know, in your car: Is what I’m13
doing right now making me money? IPA, income producing14
activity, that’s time spent talking to a prospect or15
someone in your team’s prospect. That’s income producing16
activity, guys.17
So here’s the thing. Are you being productive18
or are you being active? There’s a big difference19
between productivity and activity. You know, rearranging20
your files and organizing your names list and21
alphabetizing your names list, you know, getting ready to22
get ready, aggressively getting ready to get ready, how23
many of you have been aggressively getting ready to get24
ready? Just do it. Okay? I love this.25
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53
And schedule it in, guys. If you don’t1
schedule it, it won’t happen. I’m a total time Nazi2
because I’m a single mom with two kids that are four and3
six and they’re fricking nuts, and I’ve got thousands of4
people in my team and thousands of people that aren’t in5
my team that I’m trying to help every single day, and6
plus I need to work out and I’ve got to do all this -- my7
life is fricking crazy. If you don’t book it, it’s not8
going to happen.9
For those of you who have full-time jobs and10
stuff, you’ve got to schedule this in. You’ve got to11
make it a priority. I love this quote. Do the thing and12
you shall have the power.13
So, what are you inviting them to? To watch a14
video, to listen to a call, to a three-way call, a one-15
on-one, two-on-one, with an expert, a private business16
reception or a home event. You’re inviting them to an17
online event. You’re inviting them to a hotel event or18
you’re inviting them to a convention. That’s what you’re19
inviting them to. It’s an invitation, not a20
presentation.21
Okay. The edification promotion. This is22
everything, guys. The person who edifies the most makes23
the most. The person who promotes the most makes the24
most. I was a fricking promoter, man. I was a fricking25
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54
body dragger, okay? I put more butts in the seats. The1
more butts you put in the seats at events the more money2
you’re going to make. Bottom line. And I was a total3
body dragger. I didn’t care what I had to do. I’d just4
get in my car, they said if you pick them up, they’ll5
show up. So, I shoved them all in my little black Geo6
Metro that had no air conditioning and no radio and we7
were going. All right? It was crazy.8
But I edified the heck out of my expert. And9
when you edify someone above you, you’re introducing your10
person to that expert. Because they have the respect and11
credibility you don’t yet. That’s why you’ve got to use12
your expert. And then you zip it. Okay? And you let13
your expert do the talking. Otherwise, if you open your14
mouth, you just de-edified your expert. okay? So, just15
keep your mouth shut, let your expert do their job and16
they’ll get people signed up for you. It’s amazing.17
And you’ll want to say something. Don’t.18
Okay? Because you get this look from me. Okay? My team19
is like, yep. And next you keep talking. I go, oh,20
clearly you’ve got this under control. Peace. Because,21
look, guys, I mean, there’s a process, there’s a method22
to the madness here. There’s a reason we do what we do,23
okay?24
I’ve only got a couple more. I’ll raid through25
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58
2
CASE TITLE: VEMMA4
TRANSCRIPTION DATE: AUGUST 9, 20156
7
12
DATED: AUGUST 9, 201513
14
15
GEORGE QUADE16
17
19
format.22
23
24
SARA J. VANCE25
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Declaration of Stacie A. Bosley, Ph.D.

1. My name is Dr. Stacie A. Bosley. I have a doctoral degree in Applied Economics from the
University of Minnesota. In my capacity as an assistant professor of economics at Hamline
University, I research multilevel marketing, direct selling and pyramid schemes. I have written
multiple working papers on these topics, ranging from an analysis of direct selling around the
world to an examination of the relationship between domestic economic conditions and multilevel
marketing activity. I recently published a paper in the Journal of Public Policy and Marketing1 that
addresses the intersection of multilevel marketing and pyramid scheme activity. I have also
presented research on these topics at numerous economics conferences around the country. My
most recent research paper analyzes the spread of Fortune Hi‐Tech Marketing, an alleged pyramid
scheme and now‐defunct multilevel marketing firm. It aims to understand conditions that support
or deter scheme adoption around the country (including local economic conditions, the presence of
affinity groups, and education level). I have been interviewed by media outlets and have
participated in national conversations on multilevel marketing and associated policy and
regulation. My university teaching focuses on microeconomics, quantitative analysis, managerial
economics and behavioral economics. Each of these areas is relevant to the analysis presented in
this declaration. Microeconomics is the study of individual decision‐making and responses to
incentives. Behavioral economics examines decision‐making with a special focus on cognitive
biases and errors in judgment. Quantitative analysis provides a background in analytical
approaches to understanding data and patterns. Lastly, Managerial Economics studies decision‐
making inside businesses and organizations. An understanding of the actions of the firm (e.g., in
setting compensation policies and procedures) and the actions of the individual (e.g., in joining and
participating in a business opportunity) are highly relevant to the analysis that follows. A true and
correct copy of my curriculum vitae is attached as Appendix A.

Purpose and Materials
2. The purpose of this Declaration is to analyze the Vemma program to determine whether it is a
pyramid scheme. The Sections that follow set forth my analysis and include: 1) a review of the
company promotional and training materials (video, audio and documents); 2) a statement of the
conceptual and legal framework I used, including legal assumptions provided to me by Federal
Trade Commission staff; 3) a review of the company’s terms, conditions and Compensation Plan
(various iterations); and 4) a discussion of the available empirical data that indicates how the
marketing program works in practice, including the company’s Income Disclosure Statements and
findings from the 2014 Unfair Business Practices case in Italy. A listing of all materials reviewed is
available in Appendix B.

Company Overview and Promotion
3. Vemma offers people the opportunity to purchase and consume various “liquid nutrition”
products, and also offers a business opportunity to people who seek to earn full or part‐time
income. The company categorizes participants as either “Customers” or “Affiliates.” Customers can
only earn product credit, whereas Affiliates have the ability to earn financial rewards
(Compensation Plan, discussed infra). All participants begin as Customers (policy beginning April
1, 2014) and a Customer currently becomes an Affiliate when he/she (1) buys an Affiliate Pack or
(2) refers another Customer/Affiliate (Web Page Explaining Jan. 24 Terminology Change).

1
Bosley, S. & McKeage, K. (2015). Multilevel Marketing Diffusion and the Risk of Pyramid Scheme Activity:
The Case of Fortune Hi‐Tech Marketing in Montana. Journal of Public Policy & Marketing, 34(1), 84‐102.
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4. Founder B.K. Boreyko presents the company as the right opportunity for our current economic
and societal conditions, as people around the world are seeking health, wellness, financial freedom
and time freedom. The company advertises access to an entrepreneurial venture with virtually no
start‐up costs and no risk. Promotional videos state “no membership fees,” “no signup fees,” “no
long‐term commitments,” and a 100% money‐back guarantee (How Vemma Pays You – 2 & Go and
How to Get Paid – Vemma Home Event videos). The Vemma business opportunity is repeatedly
presented as a way that ordinary people can achieve their financial goals. For example, Tom
Alkazin2 presents Vemma as an opportunity to be the CEO and founder of one’s own company,
connected to a firm with strength and stability that has “changed my life and the life of my family.”
He asks participants to simply place an order and “let us help you” to “take control of your future”
and “make dreams become a reality” (24‐Hour Overview New Business Call with Tom Alkazin). Mr.
Boryeko similarly speaks of Vemma as “a transforming journey from an employee mentality to the
mindset of an entrepreneur” that will offer “full‐time income with part‐time effort” (Vemma – Your
First 7 Days, audio).

5. Boreyko and other promoters/materials (see Vemma Business Presentation with Top Leader
Tom Alkazin, How Vemma Pays You – 2 & Go, and How to Get Paid – Vemma Home Event) compare
Vemma’s business model to soda machines. If an individual had one soda machine, he or she might
earn modest income on the product that is sold through that machine. If the individual had access
to 1,000 machines, he or she could earn life‐changing money by earning a small share from the
product passing through those machines all around the world. Vemma is said to “open outlets
through people.” Darren Hardy (in Vemma ‐ Your First 7 Days audio) explains that individual
efforts are magnified through the “magic of duplication.” By following Vemma’s simple system and
by training two people to imitate their actions, Hardy explains that ultimately participants “can
earn 1% from 100 people’s efforts, if not 1% from 1,000, 10,000 or more.” The duplication process
corresponds to the Vemma Compensation Plan structure. Bonus eligibility within the binary
structure requires each Vemma Affiliate to recruit two people, where one person is placed on the
left team and the other on the right team. Duplication occurs when those two recruits imitate the
actions of their recruiter, each making purchases and recruiting at least two additional Vemma
Affiliates.

6. While representations of Vemma’s system might vary slightly, the essential components include
(1) purchase of initial product (typically an Affiliate Pack), (2) consistent monthly product
purchases (typically on auto‐delivery), and (3) recruitment of others who will do the same. For
example, Boreyko suggests that success in Vemma is specifically best pursued as follows: (1) buy an
Affiliate Pack; (2) order 2‐case/month auto‐delivery; (3) find 3 Affiliates who buy an Affiliate Pack
in the first week to qualify for Frenzy bonuses; (4) get car qualified; and (5) help 5 people get in a
car (Vemma News BK’s 2014 Halftime Report video). Boreyko suggests that these 5 steps result in
approximately $50,000 in residual annual income. Tom Alkazin promotes this identical set of steps
and outcomes (24‐Hour Overview New Business Call with Tom Alkazin). Another representation of
the system is articulated in the “Take a Shot and Tell Two” program (see Vemma 13 Month Cycle
Plan and Ruth Elliott Success Made Simple videos). “Take a shot” refers to the initial purchase of
product and personal monthly auto‐delivery orders. These purchases are frequently advertised as
serving three functions: to allow an Affiliate to drink the product daily; ensure the Affiliate has
product on hand for samples; and to maintain the Affiliate’s bonus eligibility. “Tell Two” refers to
the act of recruiting two new Affiliates who are trained to replicate the Affiliate’s actions (order

2
Mr. Alkazin and his wife are Vemma’s highest earning Affiliates, reporting an estimated income of $4.8
million per year (http://www.businessforhome.org/2014/04/top‐150‐worldwide‐earners‐in‐mlm‐april‐
2014/). He operates a website, My Road Map to Success, which contains extensive training materials.
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3 | P a g e

product and recruit two). Elliot, who is identified as a high ranking Vemma Affiliate3, argues that
“your team will begin to grow through the power of ‘2’,” and your teams can grow to “infinity.” As
suggested in the Vemma Presentation and Training document, “Of all the people you know, and all
the people you’ll meet, can you find two?”

7. While the “Take a Shot and Tell Two” program is only one variation of the language used by the
company and Affiliates, the fundamental components are consistent with incentives in the Vemma
Compensation Plan, company promotional materials, and assertions of other top distributors (see
How To Get Paid ‐ Vemma Home Event video as an example). Matt Morrow, a high ranking Vemma
Affiliate, describes the same system for success in his “Verve in Simple Terms” video.4 He suggests
that new Affiliates purchase product every month (drinking 1 per day and giving the rest away) and
get two other people to do the same. Morrow summarizes this as a $5/day investment that will
consistently yield substantial returns, delivering “more in a week than most people make in a year.”
Morrow claimed earnings of $59,500 in the prior two weeks, where those earnings were derived
from his simple model for success.

8. Darren Hardy (in Vemma – Your First 7 Days audio) also describes the Vemma business model
as proven, having worked for “thousands of others.” He argues success is only ensured through
strict adherence to Vemma’s duplication system for at least one year. Hardy notes, “all it really
requires is commitment to see it through long enough for the Vemma business model to work and
… for the compound effect to ignite, which kick starts the money machine.” He describes time
devoted to Vemma as an act of watering the “new money tree.” Hardy stresses simplicity and
universal access – anyone, even without specific skills, education, experience, or training, can
receive the same outcomes if they are committed, trust, use the tools, and follow the system. He
further describes the Vemma business model as an “unlimited, infinitely scalable business and
income that’s recurring and, eventually, passive.” Failure is attributable only to lack of commitment
and/or deviation from the system. While the Alkazin family (parents, sons and daughter) are the
top income‐earners in Vemma, father Tom Alkazin promises each new Affiliate that “you will be
able to do exactly what our family has done” (in BK Boreyko ‐ Elevate San Diego 2013 speech). In a
2014 video, Boreyko introduces the Alkazin family by mentioning that he recently paid the family
$963,000 in a single month. Later, in that same video, Tom motivates the crowd by saying “what’s
happened for us can happen for you” (in Star Pinnacle Tom Bethany Alkazin Vemma All In 2014
video). His youngest son, Brad Alkazin5, similarly states that, with the “simple plan” and supporting
tools and resources, “you really can’t fail” (in YPR Radio ‐ Brad Alkazin Full Length video). Brad
attributes failure to “giving up” on the system. At Vemma’s 2014 European Convention, Jamie
Chirio went further to state that it was “selfish to quit,” as you were denying yourself and thousands
of others the chance to succeed (in Jamie Chirio Speaks at Vemma’s 2014 European Convention).
The central message: anyone can do it, stick to the simple system, and success is assured if you
don’t quit.

9. The notion of “passive income” is a consistent selling point in Vemma promotional materials. Mr.
Boreyko (for examples, see Vemma News BK’s 2014 Halftime Report, Vemma Action Plan 2014, and
the Vemma Training Bible), refers to the long‐term objective of “passive” or “residual” income.

3
Ms. Elliot and her husband report an estimated $1.8 million per year in Vemma income
(http://www.businessforhome.org/2014/04/top‐150‐worldwide‐earners‐in‐mlm‐april‐2014/).
4
Verve is a specific product line within the Vemma company.
5
Brad Alkazin reports an estimated $2.64 million per year in Vemma income
(http://www.businessforhome.org/2014/04/top‐150‐worldwide‐earners‐in‐mlm‐april‐2014/). Brad is also
considered a leader of the Young People Revolution (or YPR) group.
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4 | P a g e

Such income is achieved when duplication results in significant downline teams, yielding continuing
monthly income without further effort. Boreyko suggests that Vemma participants can earn $500,
$5000, or even $50,000 per month part‐time (in Vemma Nutrition Company Marketing and Sales
Business Plan for Premium Supplement Products video). Top distributors similarly emphasize
earnings connected to the business opportunity, especially those earnings that constitute passive
residual income. Alex Morton, a high ranking Vemma Affiliate, included the following comments in
a live motivational speech (in Vemma Success Alex Morton video):
“This is about a 3‐5 year plan, to where you never have to worry about money ever again.”
“You don’t want to live life with no money. You want to have so much money that it doesn’t
even matter. That is why people do Vemma, to have enough money to where it doesn’t even
matter anymore.”
“Sun comes up, goes down, we make money while we are asleep. That’s how Vemma works
‐ you are paid 24 hours a day, 7 days a week, no matter what you are doing.”
“Yeah, you can make a million a year or a million a month.”

Affiliates echo Morton’s promises in their own video testimonials, stating “my family will
never have to worry about money again” and you can “retire your parents,” “have six Saturdays and
one Sunday,” and “set yourself up for the rest of your life” (examples include Jed Buenaluz on
Leading by Example from the Verve Leadership, Learn What Drove Emily McCullah to Success –
YPR Radio Season 2, and TK Kubvoruno on YPR Radio Season 2 w/Eric Thomas – Learn How TK’s
Why Drove Him to Success). As promised in the Vemma Presentation and Training document, “If
you put in a million dollar effort, you’ll earn a million dollars.”

10. Vemma documents and videos suggest that the opportunity remains the same for any new
member, regardless of economic conditions. “If you are dedicated to success and you follow all of
the steps, there is absolutely no question that you will find great success in the Vemma business.”
(Vemma Workbook). Morton (in Zero to Sixty: A Start‐up Business Plan for Young People Self‐
Employment with Alex Morton video) echoes that idea, suggesting: “Follow our proven system,
follow our proven method guys. If you say what we say and do what we do, you get what we have
every single time.” The business opportunity is advertised as “easy to set in motion and easy to
duplicate.”

11. Vemma has specific recruitment materials and products aimed at young adults. Boreyko (in
Vemma – Your First 7 Days audio) suggests that, “in today’s economic climate, going to school and
getting a good job may not be the best path for financial security and time freedom.” Mr. Boreyko
(in BK’s Blog CEO of Vemma Nutritional Company Speaks on Why To Join Vemma audio) cites the
“youth revolution” as the number one reason to join the organization. He notes that young people
can “think differently,” have a “clean slate,” and are burdened with high student loan debt and an
environment of high unemployment. The founder reported that of the 28,000‐30,000 people
joining Vemma per month, over half are young adults. Affiliates Brad Alkazin and Alex Morton,
among others, mention the number of current college students as a way to identify the market
potential of Vemma. Libraries, fraternities, sororities, and dorms are frequently mentioned as
places of recruitment. The Young People Revolution, or YPR, group has developed tailored
materials (e.g., the Vemma Training Bible) and meetings for Vemma recruitment. These often focus
on Vemma’s Verve line of energy drinks.

12. In Alex Morton’s talk to young adults (Vemma Success Alex Morton video), he speaks directly to
the concerns regarding earnings, autonomy and security. “You are either in or you are out. You are
either in, you want to make enough money to live life the way you want…” or go to school, get good
grades, then “beg someone to hire you.” Even if you do secure a job, that job will dictate when to go
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5 | P a g e

to lunch, when to take vacation, even when to use the bathroom. Morton notes that we are “God’s
greatest creation” and should not be paid by the hour or by salary. Morton then echoes Hardy’s
comments when he speaks of perseverance and universal access. “The only way you fail in this is
by quitting or doing nothing. That’s it. If you do something, and don’t quit, you succeed every time.
No matter where you come from, no matter what your educational level is. No matter what guys.”
Morton asks the recruits to consider the power of young Vemma participants to change the way
business is conducted and the way people are paid. This notion of revolutionary power is reflected
in the testimonial videos of Affiliates within the YPR group, as Affiliates discuss the vulnerabilities
of following the traditional “school, grades, resume, job” track. Videos frequently mention the
moment when the Affiliate “saw the vision,” embracing the “no boss, no job, no hours” freedom of
entrepreneurship and the idea to “make your own economy” and “change the world” (examples
include Patrick Comer on Prospecting Like a Pro – Vemma Verve Leadership Academy Power Talk,
Shane Sullivan Verve Power Talk on Elevating Your Vemma Business to the Next Level, and TK
Kubvoruno on YPR Radio Season 2 w/Eric Thomas – Learn How TK’s Why Drove Him to Success).
This vision frequently includes luxury cars. For example, Bryce Majdick notes his vision to “put 6
BMWs in my hometown” (in Bryce Majdick ‐ Elevate San Diego 2013 speech). The tradeoff for new
recruits is represented as the choice to sell your Xbox (presumably to purchase initial product and
materials) in order to join a movement and invest in a life‐changing opportunity, yielding
permanent financial and time freedom. Affiliate Luke Wilborn further suggests that a college
degree might no longer have value and that there is a gap between what is being taught in school
and “what it takes to earn money” (Luke Wilborn – Elevate San Diego 2013 speech).

13. Boreyko even addresses parents of Vemma recruits directly (in Boreyko Video to Parents),
asking them to congratulate their son or daughter for taking the initiative to “check out this Verve
opportunity.” He notes that young people can no longer be assured that they will find a job they are
passionate about by following traditional paths. Boreyko argues that Vemma offers skill‐building
that can’t be found in the classroom: people‐skills, goal‐setting, motivational strategies, and
experience in running a business. He also notes that the company’s business model fits young
people as they tend to be very socially connected. Suggested earnings range from free product to
“$500 per month, $500 per week, or $5,000 per month or week.” He mentions a 26‐year old who
will “make $1 million this year with Vemma.” Boreyko concludes that their sons and daughters will
be better people if they choose to join Vemma. The founder does address pyramid scheme
concerns and assures parents that, in illegal pyramid schemes, the only focus is on signing people
up and there is no emphasis on selling product. He further promises that Vemma offers free sign‐
up and only pays bonuses after a product is sold. These assertions will be addressed below.

14. Company promotional materials devote some attention to product attributes but do not
emphasize sales to ultimate users as a source of compensation and do not typically provide training
or support specifically aimed at sales to ultimate users. The product discussions contained in the
presentations appear to be primarily designed to lend credibility to the business opportunity being
offered. It is represented that the Vemma product line will allow the Affiliate to profit from the
three multi‐billion dollar “mega‐trends” that will only continue to grow in the future – health and
fitness products, energy drinks, and weight loss products. Mr. Boreyko refers to Affiliate recruits as
the “gold nuggets” while customers are the “silver nuggets,” saying that customers are “a by‐
product of our business” (Vemma News BK’s 2014 Halftime Report video). A similar sentiment is
expressed on a video on Vemma’s website titled, “How to Get Paid ‐ Vemma Home Event.” After
urging viewers to purchase an Affiliate Pack, the announcer concludes that if you are a person
without clear goals or are lacking a desire for financial improvement, or just have trouble making a
decision, then the Affiliate Pack is not for you and you should just remain a Customer. Training
videos (Affiliate Action Plan–Steps 4 and 5) for new Affiliates reflect this emphasis on bringing in
App. 1526

FTC vs. Vemma | Initial Filing

FTC vs. Vemma | Initial Filing

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FTC vs. Vemma | Initial Filing