By Chris Engelhardt
City Councilwoman Julissa Ferreras (D-East Elmhurst) is calling on the Federal Trade Commission to investigate recruitment practices of Herbalife, a company recently accused of operating a pyramid scheme targeting minority groups.
In a letter dated June 13 to Edith Ramirez, chairwoman of the FTC, Ferreras urged the federal agency to investigate Herbalife, a global nutrition and weight management company based in Los Angeles with products sold exclusively by nearly 2.3 million independent distributors around the world.
Ferreras contended in her letter that Herbalife may be acting illegally by making false income claims to Latinos in her district — which includes Elmhurst, East Elmhurst, Corona and Jackson Heights — and expressed concern that members of her communities may be “falling prey” to Herbalife’s “targeted” recruitment practices.
“Recruitment begins when victims are asked to join alleged nutrition and wellness clubs,” she wrote, noting that there are many such clubs in her district. “Herbalife representatives use these clubs to take advantage of people … representatives ‘recruit’ club members into becoming distributors. Since Herbalife’s success depends on this aggressive recruitment, new distributors are then pressured into recruiting additional members.”
Herbalife representatives were unavailable for comment.
A spokeswoman for Ferreras said her office has received between 15 and 20 complaints from community members about the company’s recruitment practices.
“By promising large profits and minimal work, Herbalife preys on vulnerable immigrant communities,” Ferreras said. “I believe it is critical for the FTC to conduct a thorough investigation and protect consumers from these malicious recruitment tactics and false promises.”
The New York Post reported back in April that Herbalife distributor and California resident Dana Bostick sued Herbalife under racketeering and corruption laws, and accused the company of being an “inherently fraudulent pyramid scheme.”
Hedge fund billionaire Bill Ackman, who has made a $1 billion short bet on the company, also criticized Herbalife as a “pyramid scheme” and has claimed that many have been cheated out of nearly $4 billion over the years in attempts to become successful distributors of the company’s protein shakes and other products.
The company, which has $4 billion in global sales per year, has denied Ackman’s accusations.
Reach reporter Chris Engelhardt by e-mail at [email protected] or by phone at 718-260-4564.