World
Phillips' Colon Health's Bloated Claims
DOJ alleges Bayer violated previous court order by making unsupported claims about product
 
Pharmaceutical giant Bayer is once again in hot water for allegedly pushing unproven health claims to promote one of its dietary supplement products. 
 
Seven years after settling allegations that it falsely marketed its One-A-Day WeightSmart vitamins as a weight-loss remedy, Bayer faces similar charges over the marketing for another one of its dietary supplements, Phillips’ Colon Health.
 
The 2007 settlement slapped Bayer with a $3.2 million civil penalty — which was really mild considering the company’s revenues totaled nearly $140 billion during the time it sold the vitamins — but it also required that Bayer refrain from making any unproven health claims about its dietary supplements in the future.
 
Now, the U.S. Department of Justice says Bayer violated that court order with its multimillion-dollar marketing campaign for Phillips’ Colon Health.
 
The DOJ said in a release last month:
… the United States alleges that Bayer expressly claims Phillips’ Colon Health can “defend against” occasional constipation, diarrhea, and gas and bloating, and impliedly claims that Phillips’ Colon Health prevents, treats and cures constipation, diarrhea, and gas and bloating, even though the company lacks competent and reliable scientific evidence for those claims.
 
Consumers have paid hundreds of millions of dollars for Phillips’ Colon Health, the DOJ said.
Bayer refutes the allegations, arguing that “the government’s motion is based on an erroneous standard” on how it deals with dietary supplements.
 
“Probiotic bacteria, including the three species used in Phillips’ Colon Health, have a long and well-documented safety record, complemented by substantial science supporting their digestive benefits,” the company said in a statement. “Indeed, the government does not dispute that the product is safe.
 
“Claims about PCH are fully substantiated by numerous clinical, animal and genetic studies, among other things, and satisfy all applicable legal standards.” 
 

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In Wisconsin, Dark Money Got a Mining Company What It Wanted
An accidentally released court filing reveals how one company secretly gave money to a non-profit that helped get favorable mining legislation passed 
 
This story was co-published with The Daily Beast.
 
When billionaire Chris Cline's company bought an option to mine a swath of northern Wisconsin in 2010, the company touted the project's potential to bring up to 700 well-paid jobs to a hard-pressed part of the state.
 
But the Florida-based company wanted something in return for its estimated $1.5 billion investment — a change to Wisconsin law to speed up the iron mining permit process.
 
So, Cline officials courted state legislators and hired lobbyists. And, unbeknownst to Wisconsin voters and lawmakers, the company waged a more covert campaign, secretly funding a nonprofit advocacy group that battered opponents of the legislation online and on the airwaves.
 
Since the Supreme Court's 2010 Citizens United ruling, which allowed corporations and unions to spend unlimited amounts on politics, hundreds of millions of dollars have flooded into the political system — much of it through nonprofit groups that have no legal obligation to identify their donors.
 
Usually such efforts remain hidden from view, leaving voters unaware of who's paying for the gush of campaign calls, flyers and attack ads. But a court filing recently made public by a federal appeals court in Chicago provides a rare look at how so-called "dark money" groups helped one company get what it wanted.
 
The document shows how, in its push for a new state law, a Cline Group subsidiary gave $700,000 to a conservative nonprofit in 2011 and 2012. That group, in turn, donated almost $3 million in 2012 to a second, like-minded nonprofit that also campaigned to change the mine permit process, tax filings show.
 
Both nonprofits worked to pass the mining bill. One helped to write the measure and launched a radio campaign even before it was introduced. The other tried to pressure a Republican holdout. Together, the two groups played a critical role in defeating a freshman Democratic state senator who'd voted against the bill, paving the way for its passage months later.
 
After the 2012 elections, some observers downplayed the impact of dark money groups after most of the candidates supported by the largest one, Karl Rove's Crossroads GPS, lost. As this year's elections approach, the Cline Group's strategy in Wisconsin reveals the much bigger impact such groups can have in state races. Here their money goes much further, in some cases dwarfing the amount candidates themselves spend on their campaigns.
 
The nonprofits that pushed for the mining law — the Wisconsin Manufacturers & Commerce Issues Mobilization Council (WMC), an arm of the state's largest business lobby, and the Wisconsin Club for Growth — declined to comment for this story. On its website, the WMC states "we have never disclosed our donors, and never will."
 
Neither nonprofit reported spending any money on politics on their 2012 tax returns, potentially violating Internal Revenue Service rules, experts said.
 
In an interview, James Buchen, a former WMC vice president, said the group's efforts on behalf of the mining bill were no different from its support of other pro-business legislation. "Our interest in this was trying to create an environment where someone was interested in coming and mining in the state," said Buchen, who left in 2012 to start a lobbying practice.
 
A spokesman for Gogebic Taconite, Cline's Wisconsin subsidiary, did not respond to requests for comment.
 
Still, documents and interviews show that Gogebic's money secretly made its way into the political battle over the mining law — and that the efforts of the WMC and the Wisconsin Club for Growth significantly swayed the results.
 
With the help of ads funded by the two groups, the GOP retook the state senate in 2012 and passed mining legislation similar to what the company had wanted.
 
Sen. Dale Schultz, R-Richland Center, the veteran legislator targeted by one of the groups, said Gogebic's efforts to hide its influence went beyond anything he'd witnessed since his election to the state assembly. "I've never seen anything like this done by special interests in Wisconsin in 32 years," he said.
 
 

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Amending Prize Chits Act

Who is behind this strange rush to legitimise MLMs?

 

At one end of the spectrum, we have lots of action against shady money collection schemes—whether in the guise of chit funds or recurring deposits. Subrata Roy of the Sahara Pariwar remains in jail since March. Pramatha Nath Manna, chairman of the MPS group, a shady chit fund operation, was arrested after years of defiance against SEBI’s action and being asked to shut down his operations in 2012. The investigation into Sharada scam has picked up speed and another major West Bengal operation, the Rose Valley group, is also facing regulatory action. 

 
At the other end of the spectrum are multinational multi-level marketing (MLM) companies like Amway, Herbalife, QNet and others, whose operations also fall foul of the Prize Chits and Money Circulation Schemes (Banning) Act (PCMC Act). They are lobbying hard to get the BJP-led government to amend the PCMC Act and legitimise their operations by granting specific ‘exemptions’ to some. These powerful, but always controversial, MLMs want the same status they enjoy in the US, although there is plenty of evidence, in India and abroad, that only a tiny sliver of distributors at the very top of the pyramid make money. 
 
Moneylife has taken the lead in exposing MLMs which make exaggerated claims to lure people. We have also pointed out that, far from dilution, the PCMC Act needs to be amended to empower the police, or other investigation agencies, to act before more shady MLMs siphon off the money collected from gullible consumers. 
 
Under the UPA government, it was the ministry of corporate affairs that was looking into dubious MLM companies, such as SpeakAsia, Qnet and dozens of others that had cheated investors. Sachin Pilot, as MCA minister, answered parliamentary queries on the subject. However, in the BJP dispensation, it is the department of banking and financial services which is apparently leading the effort to legitimise select MLMs. 
 
At a time when the finance minister was away on a long medical break and when the department of banking ought to be concerned about issues such as burgeoning bad loans and the urgent need to appoint chairmen of six nationalised banks, it is, indeed, surprising that amending the Act to legitimise MLMs seems a greater priority. It certainly raises questions about the transparency and probity that was promised by the prime minister in his election campaign.  

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COMMENTS

Agyat Vyakti

1 year ago

Off the topic. This is just for awareness.. Qnet and MLM are using friends and relatives to dupe you... You may like to read Qnet modus operandi with screen shots and facts and how to avoid them here ... Please share for public interest.. Qnet Scam in delhi by Ashwin Baluja and Prithvi Raj Grover http://qnetindiascam.blogspot.in/

Sushant Roy

2 years ago

http://www.DSA.org & http://www.wada.org & http://www.idea.co.in represent all direct selling companies. ICICI also supports direct selling and the law in India will give a clear cut understanding of what is a scam like sharda scam and what is business if direct selling.

REPLY

Agyat Vyakti

In Reply to Sushant Roy 1 year ago

Off the topic. This is just for awareness.. Qnet and MLM are using friends and relatives to dupe you... You may like to read Qnet modus operandi with screen shots and facts and how to avoid them here ... Please share for public interest.. Qnet Scam in delhi by Ashwin Baluja and Prithvi Raj Grover http://qnetindiascam.blogspot.in/

Scott Johnson

In Reply to Sushant Roy 2 years ago

These organizations are MLM lobbyists and MLM sycophants.

Sushant Roy

2 years ago

There are regular product buyers of Amway without being interested in selling them. You seem to have no understanding of economics and you also dont understand what the word scam stands for. If Amway is a scam then in that case all corporates and capitalism is also a big scam.

REPLY

Scott Johnson

In Reply to Sushant Roy 2 years ago

If there are little to no retail sales to non-distributors, the MLM is a scam. Amway is a scam, and it also has a RICO fraud tool scam. Sushant Roy seems to have no understanding of economics and he also doesntt understand what the word scam stands for. Amway is a scam, which does NOT make all corporations and capitalism a big scam.

Sushant Roy

2 years ago

Pricing is relative. There are products expensive than Amway in the same category. Same food in various restaurants are priced differently. You clearly dont understand market it shows.

REPLY

Scott Johnson

In Reply to Sushant Roy 2 years ago

Pricing is relative, retail sales to non-distributor customers are measurable. Amway's retail sales are close to zero, which makes Amway an illegal pyramid. The added tool scam makes Amway a RICO fraud as well: http://www.StopTheAmwayToolScam.wordpress.com

Sushant Roy

2 years ago

So dude you buy a coke today and then drink it half and your friend says that it has ph level so acidic with which you can clean your toilet and the amount of sugar is too much and the real manufacturing cost of the 200 ml drink is less than a rupee and you decide to return the bottle to thr shopkeeper and he refuses to take it is a real scam where in good direct selling companies take your concern im consideration and pay back your money as per law!

REPLY

Scott Johnson

In Reply to Sushant Roy 2 years ago

Comparing Amway to coke is nonsense, the problems are overpriced products which lead to little to no retail sales (illegal pyramid) and tool scams (RICO fraud): http://www.StopTheAmwayToolScam.wordpress.com

Sushant Roy

2 years ago

Neither binary nor generation plans are illegitimate; technically the problem is poor products or services without a guarantee. It is like a buy a product and also get a chance to do business but then the products are of poor quality and i dont want to promote then and the company refuses to pay my money back.

REPLY

Scott Johnson

In Reply to Sushant Roy 2 years ago

They are if there is little to no retail sales to non-distributors.

Rogier van Vlissingen

In Reply to Sushant Roy 2 years ago

If there is any form of MLM that is not illegal, it should be. see: https://http://www.imf.org/external/pubs/ft/fandd/2000/... and also http://timesofindia.indiatimes.com/busin... http://www.entrepreneur.com/article/2427... and http://www.arabianbusiness.com/bahrain-o...

Scott Johnson

In Reply to Sushant Roy 2 years ago

The problem is lack of customer sales and tool scams: http://www.StopTheAmwayToolScam.wordpress.com

Sushant Roy

2 years ago

I agree that companies like speakasia or companies which offer
huge interest rates are really fraud and fly by night companies and are scam artists.

REPLY

Scott Johnson

In Reply to Sushant Roy 2 years ago

Amway is also a scam, they just use slightly different techniques: http://www.StopTheAmwayToolScam.wordpress.com

Sushant Roy

2 years ago

Amway doesn't promise any readymade money without any hardwork and business turnover. Neither Qnet or Amway pays you without any turnover of goods or services.

Scam is only when you promise to pay and dont pay!

REPLY

Agyat Vyakti

In Reply to Sushant Roy 1 year ago

Off the topic. This is just for awareness.. Qnet and MLM are using friends and relatives to dupe you... You may like to read Qnet modus operandi with screen shots and facts and how to avoid them here ... Please share for public interest.. Qnet Scam in delhi by Ashwin Baluja and Prithvi Raj Grover http://qnetindiascam.blogspot.in/

Scott Johnson

In Reply to Sushant Roy 2 years ago

Amway lies, pure and simple. Scam is when you have overpriced products that can't be sold to external customers, and misrepresent business model/rip off people with tool scam: http://www.StopTheAmwayToolScam.wordpress.com

Sushant Roy

2 years ago

What about a job scam where you work for 40 years and the credit is taken away by the company owners? Isn't that a real scam?

You then live on your PPF pension which is peanuts.

In Amway or such companies you can pass your business legacy to your future generations. Where in a corporate job you seldom get a chance to be a ceo. In Amway or other such companies all distributors have equal chance to grow their own organisation.

The argument that only top few distributors make money is a lame argument comes from a communist mind set. In capitalism only top few get rich. The entrepreneurs become rich, those who work like jobber or salesman in network marketing company do not grow.

REPLY

Scott Johnson

In Reply to Sushant Roy 2 years ago

This is a common tactic, trying to change the focus off of MLM scams and compare to jobs. 40 year jobs make money for the employee, almost all in MLMs at any given time are operating at a net loss. The "legacy" and "CEO" claims are mere emotional hooks, not based on facts. The lame argument is that MLM is legitimate. LOL

Scott Johnson

2 years ago

I guess the Amway India CEO isn't the only scam artist on the radar. Most MLMs operate similar to Amway, the largest MLM scam on the planet: http://www.StopTheAmwayToolScam.wordpress.com

jitu moni

2 years ago

Lets spread it friends

http://www.business-standard.com/article...

Two top representatives of QNet, a Hong Kong-based multi-level marketing company allegedly involved in a Rs 425-crore fraud here, were arrested today after being picked up from Delhi international airport, police said.

The controversial company's senior independent representatives, identified as Sandeep Kalra and Hitesh Miglani, were intercepted by immigration authorities at the Indira Gandhi International Airport at Delhi last night, said an officer with Mumbai Police Economic Offence Wing (EOW).

The duo, who arrived from Dubai in separate flights, was stopped at the airport as Look Out Circulars (LOC) were issued against them by the EOW probing the case.

The two suspects, who were suspected to have had pocketed lakhs of rupees through the scheme and organised several training camps to lure investors, have been subsequently brought to the metropolis and placed under arrest this evening, police said.

The LOCs have been issued against those whose statements have been necessitated in the probe but did not appear before the investigators despite summons.

Kalra hails from Delhi while Miglani is from Bangalore, police said adding that this is the first arrest of those against whom LOCs had been issued.

The EOW had earlier arrested 15 persons for allegedly duping investors by selling QNet products, including magnetic disks, herbal products and holiday schemes, through allegedly fraudulent means.

The EOW has invoked the stringent Maharashtra Protection of Interest of Depositors (MPID) against the company which has denied any wrongdoing on its part.

QNet has also been accused of using the banned binary pyramid business model. An FIR in the case was registered in August in 2013.

The accused had been charged with cheating and forgery under relevant sections of the Prize, Chits and Money Circulation Schemes (Banning) Act, 1978.

Siksha

3 years ago

thanks for taking the action quickly.. I hope it stops soon to save hard earned money of middle class families.. why donn you announce like a head line in popular news paper(TOI) or local news papers like mumbai samachar & gujarat samachar to not to indulge any of such businesses.. people are not aware enough about Qnet

gurupreet

3 years ago

no government will ever legitimize PYRAMID schemes like QNET :)

Ashish

3 years ago

Multi Level Marketing or Network Marketing is a beautiful Industry which provides livelihood to millions across the world. Although the popular perception is that only a few people earn money. the same is not true in a genuine legitimate MLM Company where everyone who sells the products of the Company earns money. Yes, some make more money and some less but it does not matter in a genuine MLM if you are the first person to join or join later, everyone has an equal opportunity to earn. Everything around you is a pyramid, be it the Government, or the Company you work for. Only few people are at the top. Does that structure make something illegal.

Yes, MLM has garnered a bad name but only due to the acts of certain crooks who use the guise of MLM to cheat people like Speakasia etc.

REPLY

Siksha

In Reply to Ashish 3 years ago

So some one has cheated you. so you are trying to cheat others to recover your loss by writing such beautiful lines.. shame on you all who are desperate to trap their own relatives & friends..

MOHAN

In Reply to Ashish 3 years ago



Kindly let me know the "beutiful" "legal" MLM you belong to

Tex

3 years ago

There is cause for some optimism. India slams Amway and the DSA, AGAIN! See http://indianexpress.com/article/india/i..., which states, in part, “…the Intelligence Bureau reported in 2012 that “fresh” illegal financial activities of chit fund companies were cheating lower middle class and poor people, especially in rural and semi urban areas. The proposed changes, prepared by Department of Financial Services (DFS), also drags in “pyramid marketing schemes” within the act with some safeguards to exclude selling of goods and services, but not those sales where there is no economic activity or addition of economic value save for creating a chain of new participants and distribution of economic benefits to the existing ones. The department has also turned down request of Indian Direct Selling Association (IDSA) – comprising biggies like Amway, Tupperware and Hindustan Unilever Network – to include direct selling schemes as an exempted category under Section 11 of the Act.”

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