Archive for August, 2007
Tue 28 August 07 · Filed under Pyramid Schemes & MLM
Okay, this commentary is just silly. Integrity at Usana Health Sciences is non-existent. At the very least, the executives and board members lie about their credentials. Then we have the information that is never provided to distributors/recruits and investing community. At the worst, this rises to the level of fraud in a public company.
Here are an analyst’s comments:
NEW YORK, August 28 (newratings.com) - Analyst Timothy S Ramey of DA Davidson maintains his “buy” rating on Usana Health Sciences Inc (USNA.NAS). The 12-18 month target price is set to $60.
In a research note published yesterday, the analyst mentions that the mood at the company’s global convention this past week was upbeat. The Minkow controversy does not seem to have impacted Usana Health Sciences’ business or motivation of the company’s employees, who seemed disinterested in the allegations of the convicted felon Barry Minkow, the analyst says. Given the information regarding the sincerity and integrity of the company and its management team, the charges against Usana Health Sciences do not seem realistic, DA Davidson adds.
Tim - Do you really want people to believe that enthusiastic distributors and your lie about integrity is really enough to deem Usana a “buy”? And do you expect anyone to take you seriously after this nonsense?
Mon 27 August 07 · Filed under Scam Busting
What a great way to prove what a pyramid scheme Usana Health Sciences is. A little plea for help finding new distributors victims:
Mon 27 August 07 · Filed under Fraud News Stories
What has this world come to when neighbors are protesting against a house for elderly people? God forbid that the elderly people’s family members come to visit them. They might bring with them *gasp* traffic!
This is the house that Jacquelynne Chiarelli wants to turn into a residential facility for elderly people. If you’ve ever had to find assisted living for an elderly family member, you can appreciate how difficult it is. In the Milwaukee area, there are more residents than there are beds.
So Jacquelynne, a licensed nurse, decided that she would open her own community-based facility. These types of facilities are important for people who need some assistance with daily living, but don’t need or want to be in a nursing home. [Read more...]
Mon 27 August 07 · Filed under Auditing & Regulations
This is Sam Antar’s final installment in his three part series on all the “unusual” things showing up in Overstock’s financial statements. Unusual because they don’t align with multiple statements made by CEO Patrick Byrne in a variety of interviews and earnings calls.
The bottom line is this: Byrne and Overstock management have made statements about their inventory that cannot possibly all be true. They are in conflict and cannot coexist, therefore at least some of the statements must be false. [Read more...]
Sun 26 August 07 · Filed under Fraud News Stories
Back in June, I reported that homeowners who lost homes in Katrina were waiting for a major ruling in their case against insurance companies.
U.S. District Judge Stanwood Duval Jr. had ruled in November that the insurance polices were ambiguous with regard to the language excluding water damage. He said the policies should have distinguished between floods caused by (a) a natural disaster, which would not be covered by most regular homeowners’ policies, or (b) a broken levee, which might be considered a man-made disaster and might be covered under regular policies. His decision was in favor of the policyholders. [Read more...]
Sun 26 August 07 · Filed under Fraud News Stories
To hell with profits. Overstock wants to send newsletters.
[Read more...]
Sun 26 August 07 · Filed under Fraud News Stories
On my other site I have Google ads. It’s a nifty way to recover some of the costs of running the site. It wasn’t until recently that I started to use the “channels” feature. Basically you can set up different sets of ads that you can track so you can see if certain pages, or ad positions, or ad types bring in more revenue than others.
I recently unveiled a redesign of my other site. Along with the new site came a different set of Google ads and a special component to help insert them in the new site. The add-on was necessary because of the software running the site.
So for several days now, the channel for the ads contained in the add-on was not logging any clicks or any activity. Huh? I can see the ads, and if my other ads are any indication, they’re getting clicks. What is going on?
Well as it turns out, I had them set up wrong. So people were viewing and clicking the ads, and because they LOOKED fine, I didn’t realize anything was wrong until I looked at the reports for the site.
So here’s my question… Who got the ad revenue for those days that the ads were running but not hooked up with my account? Sounds a little sneaky to me… Who gets the money from ads that are set up improperly? My guess is Google keeps it. I wonder how much money that is each day? Just imagine how many people might set up their ads incorrectly on a daily basis… Sounds to me like Google has found a cool new way to generate some extra revenue.
Fri 24 August 07 · Filed under Scam Busting
The Motely Fool recently published a bit on Usana Health Sciences and the ongoing SEC investigation that was started based upon the investigation done by Barry Minkow and Fraud Discovery Institute.
I have a few comments on some of the assertions made in the article.
You’ll need to know something about MLM before we dig into USANA’s story. Here goes: MLM, in its simplest form, combines direct marketing and franchising. For USANA, associates or distributors buy from the parent company and are compensated not only for what they sell, but also for how many others they recruit to sell USANA’s products. (New associates pay an up-front fee.)
MLM isn’t illegal, but as far as the Federal Trade Commission is concerned, the model may resemble a classic pyramid scheme, where riches are promised to those who get others to pony up cash to a dummy organization.
I don’t know where they got the idea that MLM is like “franchising,” but it’s really not. I’m afraid that the use of the term “franchising” add some credibility to the “business opportunity” that it doesn’t deserve. They got it right when they mentioned a pyramid scheme, though!
So far, there’s no evidence that USANA is conducting a fraud. But Barry Minkow, a former fraudster turned corporate crime-buster, told Forbes recently that executives have concocted a complicated scheme whereby they’re cashing out in huge numbers and covering their dilutive tracks with massive stock buybacks funded with shareholder cash. USANA denied the charges and took issue with the Forbes account here.
What would you call all the completely objective situations involving falsified credentials and misrepresentations? Are those not fraud? How can they be “no evidence”?
Perhaps that’s true. But even if it is, USANA’s attempt at a Jedi mind trick with respect to both Minkow (”he’s a crook!”) and the alleged FBI probe (”nobody’s called, so it must not be happening”) smell funny.
I concur. Usana hasn’t really given any proof that any of the substantive allegations are false. Seems that the executives hope if they keep saying Barry is a felon, that will be enough to make their problems go away. I doubt it will work.
Thu 23 August 07 · Filed under Entertainment
I openly admit to being a reality television fan. My favorites are Survivor and Amazing Race, but just about any reality show will do. So when I saw commercials for this new show called “Kid Nation,” I was intrigued. 40 kids, ages 8 to 15, in a “ghost town” outside Santa Fe for 40 days, creating and living in their own little community.
It sounded interesting, but my mind immediately went to safety issues. I wondered what parent in their right mind would send their young child or teenager off to live with almost no supervision. There was supervision, wasn’t there? Or were the cameras rolling while the adults weren’t allowed to interfere? It’s not clear, and I suppose that’s part of the mystique that CBS is hoping will draw in viewers.
Questions are now being raised over whether the filming of the show violated child safety and labor laws in New Mexico, where Kid Nation was filmed. Apparently the children were required to do whatever the producers told them to do, or they would be removed from the show. That sounds like a typical reality show to me, but seems a lot more weird when it’s involving children with no parents present.
One parent has complained that the conditions were abusive. Yet the 22-page contract signed by the parents of all children disclaims all responsibility for injury and death of the children. The contract even disclaimed responsibility for any sexually transmitted diseases or pregnancy if any of the children engaged in sexual activity.
There is an interesting confidentiality clause in the contract too. While confidentiality usually lasts until after all the episodes of a reality show are aired, in this case the confidentiality extends for 3 years after the show is aired. Violation of this part of the contract means a $5 million penalty. CBS also retains the rights to the children’s life stories forever. Wow.
The children were paid between $5,000 and $20,000 for their participation, but will not actually get their money until after all episodes air.
Thu 23 August 07 · Filed under Fraud News Stories
A Milwaukee county man was convicted yesterday of voting twice in a November’s election. Michael Zore voted twice within 6 hours, once in Wauwatosa (where he lives) and once in West Allis (where he used a fake address).
Zore told a jury that he forgot he already voted. I’m not kidding. The guy really said that he went and made up a fake address to vote in a city in which he doesn’t live because HE FORGOT HE ALREADY VOTED.
The defense said that Zore was under stress from his sister’s death, a wage garnishment to pay overtaxes, his divorce a year earlier, and the cancellation of a class he was taking. He says he was running errands in West Allis (where he doesn’t live) and was across the street from City Hall… and he just went and voted.
The jury convicted him over their lunch break. He could get up to seven years in prison and a fine of $20,000. He will be sentenced on September 27.
Wasn’t it Milwaukee Mayor Tom Barrett who pooh-poohed claims of voter fraud and demanded that someone give him “one name” of a person who had committed voter fraud? Here’s another one, Tom.
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