Let's keep the Dem's on the run!
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Posted on 10/14/2003 10:19:30 AM PDT by .cnI redruM
A Dallas firm has made a fortune selling the controversial weight-loss aid, even as former distributors sue over the company's get-rich promises.
Ralph Oats is a high school dropout and former truck driver from Nashville who now lives in a Dallas mansion modeled after the White House and until recently owned an oceanfront home and a yacht in Florida. How he amassed such wealth is one of those classic American stories of success fueled by raw entrepreneurial ambition—at least as he tells and retells it.
But Wellness International Network (WIN), a multilevel marketing company founded by Oats in 1992, now finds itself beset by twin controversies: over the promises it has made to its distributors and over the safety of its flagship product, a weight-loss supplement called BioLean. The key ingredient in BioLean is an ancient Asian herb commonly known as ephedra, which has come under renewed scrutiny since February, when Steve Bechler, 23, a minor league pitcher for the Baltimore Orioles, died of heat stroke during spring training. Tests later revealed that he had been taking an ephedra-based product, though not BioLean.
According to the U.S. Food and Drug Administration's most recent statistics, ephedra contributed to 81 deaths between January 1993 and October 2000, among 1,398 reported adverse reactions that included heart attacks, strokes, and seizures. That list represents only a fraction of the tally, according to the U.S. Department of Health and Human Services, which estimates that fewer than 1% of ephedra-related "adverse events" are ever reported. Last summer Congress held hearings on possible regulation of products containing the herb, which as a "dietary supplement" does not face the strict safety standards that are applied to substances classified as prescription drugs. Senator Richard Durbin (D-Illinois) has introduced a bill that would require makers of ephedra-based products to report any adverse events to health regulators. New York and Illinois have banned the sale of products containing ephedra.
(Article continues for 2 additional pages, but I think this is enough for you to get the basic gist.) While WIN is only one of many companies peddling ephedra products, it is among the most aggressive and creative. BioLean accounts for the "overwhelming majority" of WIN's sales, Cathy Oats, Ralph's wife and a WIN principal, has publicly stated. To boost sales, the company has recruited high-profile distributors—not only sports celebrities such as former NFL player and Super Bowl coach Mike Ditka but also "hundreds" of physicians, according to Bob Wagner, a WIN distributor based on Long Island.
But as experts have expressed rising concern about the health effects of ephedra, attendance at WIN's gala meetings in Dallas, aimed at signing up new distributors, has dropped from some 700 a month to about half as many every other month, according to several former distributors. At the same time, WIN has been hit by 11 lawsuits filed by 38 former distributors over the past three years, alleging fraud, breach of contract, and violations under RICO, a federal racketeering statute. Thirteen plaintiffs have settled their cases with the company; the terms are confidential. The remaining suits are pending, with WIN denying any wrongdoing.
The suits, in essence, accuse WIN of deceptive business practices. Because WIN operates as a multilevel marketer, its distributors not only sell products but also recruit other distributors—an arrangement that has enabled it to efficiently build a national sales force.
But those suing the company, as well as other critics, say that WIN's system essentially operates as a pyramid scheme in which distributors have more incentive to find and offload their inventory to new recruits than they do to sell the product to consumers. These critics claim that Oats and others who got in early—those at the top of the pyramid—make money, while late joiners choke on unsold inventory as they run out of fresh recruits. At some multilevel marketing firms, as at Equinox International in 2000, the pyramid has collapsed. In other cases, such as Nu Skin in the 1990s and Herbalife in the 1980s, regulation and the threat of litigation forced the companies to change their practices.
(Excerpt) Read more at fortune.com ...
Let's keep the Dem's on the run!
Click the Pic!
Don't fall for this set-up. Trial lawyers are laying the groundwork for class action lawsuits against the makers of ephedra products.
Many people have used ephedra, I've used ephedra, without any problems. But then I didn't take four times the recommended dosage and excercise in the summer sun and heat.
a prior history of heat illness episodes while in high school - which heightens the probability of reoccurring incidents;
a family history of sudden death following exercise (his half-brother died of an aneurysm at the age of 20 after overheating from playing baseball);
a history of hypertension and liver problems;
he had not eaten solid food for a day or two, in an apparent attempt to lose weight;
he was apparently not adequately acclimatized to training in the heat and humidity of South Florida;
it appeared that he was wearing two or three layers of clothing during workouts, again, in an attempt to lose weight;
he was overweight and did not have a high enough fitness level to make it through conditioning drills; and,
he was allowed to exercise until he collapsed with a core temperature reportedly of 106° F before being removed from the field.
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