Editor’s Note: CTLatinoNews.com published a story last July on questions about Herbalife and some of its in Connecticut participants. http://ctlatinonews.com/blog/2013/07/30/does-alleged-pyramid-scheme-target-latinos/. This opinion piece written for FoxNewsLatino by Charles Garcia raises some of the same issues.
Herbalife has received glowing reviews from the financial community in their recent audit. Profits are up. Things are rosy. But, the question is, can we believe this?
Audits do not always tell us the full story. Just look at Bernie Madoff. Madoff also hired an auditor to certify his books, which came back glowing. Yet in 2009, Bernie Madoff was convicted of 11 counts of fraud and sentenced to the maximum 150-year sentence for operating the world’s largest pyramid scheme in U.S. history. The court estimated losses at $18 billion.
“It’s time for our leaders not to be lured by yet another company’s appearances of financial success but to look beyond a simple document and closer at the lives of the people involved.” – Chris Garcia
Looks are deceiving.
As a leader in the Latino community, I encourage our government officials not to just look at the financial audits of Herbalife. The truth is that Herbalife is making its profits on the backs of Latinos. Sales within the Latino community are responsible for more than 60 percent of the company’s nationwide sales. Many insiders estimate the number to be closer to 80 percent.
These are hard-working people who have come to this country and are enticed by Herbalife with promises of fulfilling their American Dream but in reality it often becomes their nightmare. A 2011 Federal Trade Commission report finds that Latinos are 50 percent more likely to be victims of fraud, including illegal pyramid schemes. These victims rarely report abuses because of cultural and language barriers.
Pyramid scheme participants attempt to make money solely by recruiting new participants into the program, according to the U.S. Securities and Exchange Commission. And that is how Herbalife appears to operate, as its participant incentives are to recruit rather than to sell product, leaving those at the bottom with no way to succeed simply by selling the product.
Most of Herbalife’s members earn virtually nothing – despite how hard they work. While the Herbalife CEO made more than $10 million last year…
To read full article: http://latino.foxnews.com/latino/opinion/2013/12/30/chris-garcia-is-herbalife-next-bernie-madoff/