Nutrition for Life Sets Pact To Settle Pyramid-Scheme Case
March 29, 2011
HOUSTON -- Nutrition for Life International Inc. reached a settlement to end scrutiny over a program that several states said might constitute an illegal pyramid scheme. The Illinois attorney general's office said the marketer of nutritional supplements will pay eight states a total of $185,000 and has already eliminated its ``instant executive'' program as part of the settlement. Under that program, distributors received lucrative sales commissions in exchange for an up-front $1,000 purchase of goods for sale. The settlement also calls for executive candidates to make five verifiable retail sales during the preceding month to receive commissions, according to the office. Nutrition for Life said its executive program, which unlike the instant-executive program allows distributors to sell $1,000 of merchandise over an unrestricted period of time to qualify, is otherwise unaffected. A Nutrition spokesman said distributors can still buy $1,000 of merchandise at once and instantly qualify for executive status, but the option won't be presented as an instant executive program. The Illinois attorney general's office filed suit in state court in April against Nutrition for Life's top distributor, Khalilah Shifflett, alleging that he and others violated the state's anti-pyramid laws with the recruitment of distributors for the instant-executive program. Nutrition for Life wasn't named in the suit. Mr. Shifflett also joined in the settlement. In Nasdaq Stock Market trading Tuesday, shares of Nutrition for Life rose 25 cents to $14.
