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Case No.:
Complaint For
1. VIOLATION OF RICO (18 U.S.C.
1962[C])
2. BREACH OF CONTRACT
3. BREACH OF THE IMPLIED
COVENANT OF GOOD FAITH AND
FAIR DEALING
4. INTENTIONAL INTERFERENCE
WITH CONTRACTUAL RELATIONS
5. INTENTIONAL INTERFERENCE
WITH PROSEPCTIVE ECOMONIC
INTEREST
6. FRAUD
7. TRADE LIBEL
8. MISAPPROPRIATION OF TRADE
SECRETS
9. VIOLATION OF BUSINESS AND
PROFESSIONS CODE 17200
JURY TRIAL DEMANDED
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-1COMPLAINT
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I. INTRODUCTION
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1.
companyfor damages and injunctive relief, arising from the breach of a two-year
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8 exclusive supply agreement, for the popular supplement Stemfit Active (Stemfit), and
9 the subsequent raiding of Well-Meds downline independent distributors (IDs) by the
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Unnamed Co-Conspirators Tina Johnson, Dr. Chris Morris (hereinafter Unnamed Co-
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12 Conspirators ), and NHT Global (NHT). (Ex. 1.)
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2.
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16 International, LLC., (Ubiquity) and later through Mind, Body, & Spirit agreed to
17 supply Well-Med for a term of (2) two years, with a product call Stemfit Active. Stemfit
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Active is a nutritional supplement that contains, among other things: the incubated,
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20 fertilized, avian-egg extract YTE (from Norway Marine Mineral Complex), Shark
21 Cartilage, Glyconutrient, and Phytonutrient. Users of the supplement report, among
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Tina Johnson and Dr. Morris are subject to a mediation and arbitration provision. Well-Med will initiate mediation
24 shortly against them. Should they not comply with the terms of the policies and procedures, then Well-Med shall amend
the complaint to name them as named parties in this complaint. Thus, they are referred to as Unnamed Co-Conspirators
25 for the purpose of pleading claims against the other Defendants relating to conspiracy.
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Tina Johnson and Dr. Morris are subject to a mediation and arbitration provision. Well-Med will initiate mediation
26 shortly against them. Should they not comply with the terms of the policies and procedures, then Well-Med shall amend
the complaint to name them as named parties in this complaint. Thus, they are referred to as Unnamed Co-Conspirators
27 for the purpose of pleading claims against the other Defendants relating to conspiracy.
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-2COMPLAINT
1 other things: increased energy and endurance, improved focus, attention, concentration,
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3.
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month non-compete upon termination), it is believed that Defendant Ubiquity and the
distributors, Joe Garia, and Dan Catto, to transfer the Stemfit product line over to NHT.
20 It is believed that Co-Conspirator Morris and Johnson, met with Joe Garcia, founding
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master distributor of NHT, a Canadian citizen, and, as early as October 2015, if not
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earlier.3 Joe Garcia was able to lure the Unnamed Co-Conspirators away from Well-
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http://www.wecreatemillionaires.info/
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-3COMPLAINT
1 Med, by promising them the opportunity to join a global $300 million company, and
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4.
Knowing that Stemfit had a loyal following, and was gaining sales
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momentum, the Unnamed Co-Conspirators, who were well respected Well-Med IDs,
21 and President and Chief Product Strategist, set out to steal Well-Meds loyal customer
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base (the IDs) for Stemfit. (Ex. 15.) The Unnamed Co-Conspirators intended to bring
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the Well-Med IDs to NHT Global, when they transitioned over, so as to boost initial
concocted the fiction that only NHT would have Stemfit/Stemrenu, as Unnamed Co-
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-4COMPLAINT
1 Conspirators were the formulators, and had exclusive right to YTE, the key ingredient
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in Stemfit; this is flat out false (Ex. 6). They also spread a false rumor to Well-Med
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IDs that Well-Med only possessed a two to three-week supply of the product, and after
5 the supply ended Well-Med would no longer be able selling Stemfit Active.
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5.
These false statements about Well-Med and Stemfit Active were also
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24 and was able launch it second generation Stemfit product shortly thereafter despite the
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-5COMPLAINT
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7.
Among other things, in their attempt to defame and raid Well-Med IDs,
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Defendants and the Unnamed Co-Conspirators: (1) violated the 2-year exclusivity
15 agreement, by negotiating to sell the product to NHT; (2) violated the 6-month non16
competition provision, which ended on July 31, 2016 (3) misappropriated trade secrets,
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in the form of proprietary Well-Med contact information for active IDs and Stemfit
reputation in the multi-level marketing industry (such as falsely stating it was selling
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22 products that were using degraded YTE, and was unable to obtain certain ingredients
23 for products.
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8.
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26 with respect to Well-Med was: egregious, intentional, malicious, and undertaken with
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-6COMPLAINT
1 the specific intent to harm Well-Med professionally and financially. Moreover, Well2
Med, and its business, have been directly affected by Defendants and the Unnamed
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Co-Conspirators unlawful and tortious actions, in that they have lost business, in the
5 form of product sales, and active IDs, who actively sell Well-Meds products.
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9.
Given that the unlawful conduct is continuing and ongoing, and that
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8 Defendants and the Unnamed Co-Conspirators have misappropriated trade secrets, its
9 clear that only an express order from this Court, enjoining Defendants and the
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12 unfair/unlawful business practices, and imposing punitive damages, will deter
13 Defendants from continuing such conduct.
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The Well-Med:
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10.
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Well-Med, LLC was (at all times relevant to the allegations in this
complaint) a corporation organized under the laws of the State of California, with its
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20 principal place of business in the State of California, that did business regularly
21 throughout the United States, including in California. Well-Med is a multi-level
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The Defendants:
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11.
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under the laws of the State of Texas, with its principal place of business in the State of
-7COMPLAINT
1 California, and did business regularly throughout the United States, including in the
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State of California. NHT transacts its business in the Central District of California in
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accordance with 18 U.S.C. 1965(a) and (b) and California Code of Civil Procedures
publicly traded company with a market capitalization of over $300 million dollars. (Ex.
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8 8).
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The Defendants:
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12.
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12 under the laws of the State of Texas, with its principal place of business in the State of
13 California, and did business regularly throughout the United States, including in the
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State of California. NHT transacts its business in the Central District of California, in
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16 accordance with 18 U.S.C. 1965(a) and (b), and California Code of Civil Procedures
17 410.10. NHT is a direct competitor of Well-Med, and acts through is distributors. It
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is a publicly traded company with a market capitalization of over $300 million. (Ex.
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20 8).
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13.
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corporation organized under the laws of the State of Nevada, with its principal place of
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24 business in the Nevada, and did business regularly throughout the United States,
25 including in the State of California. Ubiquity transacts its business in the Central
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-8COMPLAINT
1 District of California, in accordance with 18 U.S.C. 1965(a) and (b), and California
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14.
Defendant Mind, Body, & Spirit, Inc., at all relevant times was a
5 corporation organized under the law of the State of Nevada, with its principal place of
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business in Nevada, and did business regularly throughout the United States, including
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8 in the State of California. Defendant Mind, Body, & Spirit, Inc., transacts its business
9 in the Central District of California, in accordance with 18 U.S.C. 1965(a) and (b),
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and California Code of Civil Procedures 410.10. Defendant Mind, Body, & Spirit,
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12 Inc. is owned jointly by the Unnamed Co-Conspirators. It received payment from Well13 Med on several occasions, in response to purchase orders for Stemfit.
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15.
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16 corporation organized under the laws of the State of Wyoming, with its principal place
17 of business in the State of Wyoming, and did business regularly throughout the United
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States, including in the State of California. Awesome transacts its business in the
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20 Central District of California in accordance with 18 U.S.C. 1965(a) and (b), and
21 California Code of Civil Procedures 410.10. Awesome Energy was incorporated in
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Unnamed Co-Conspirators:
-9COMPLAINT
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16.
25-years experience in the industry. (Ex. 12). Unnamed Co-Conspirator Johnson has
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8 Co-Conspirator
9 approached the CEO of Well-Med, Tom Lee, with the idea to market a YTE-based
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product, like one she had marketed previously at another MLM company (Lifepharm
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12 Global). (Ex. 13). Tina Johnson, because of her prior experience and ambition, was
13 made President of Well-Med. As president, she was paid a salary of $10,000 per month.
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Ms. Johnson received this salary up until March 2016. She received commissions up
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16 until April 2016 from Well-Med.
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Chris Morris:
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20 health and wellbeing products market. According to his biography, he is a recognized
21 naturopathic physician, author, cleric, and business leader. (Exs. 13,14,15). Tina
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Johnson is his partner, and they routinely work together in MLM companies such as
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24 LifePharm Global, Well-Med, and now NHT.
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19.
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have sufficient and continuous contacts with the Central District of California, in that,
- 10 COMPLAINT
1 among other things: they actively violated the exclusivity agreement, solicited IDs
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from Well-Med, and had active Well-Med IDs and employees send current IDs
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5 mails and wires in this district. They also sold products and services in the district, and
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single enterprise, joint-venturer, or alter ego of or for the other Defendants, and
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12 Unnamed Co-Conspirators, with respect to the: acts, violations, and common course of
13 conduct alleged herein, and ratified said conduct, aided and abetted, or is otherwise
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liable. Defendants and Unnamed Co-Conspirators had meetings with other Defendants,
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16 and Unnamed Co-Conspirators reached agreements to solicit Well-Med IDs and
17 violate the exclusivity agreement. In addition, Defendants, along with Unnamed Co18
Conspirators, were part of the leadership team that participated in the launch of
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20 StemRenu, and made decisions regarding: products, services, marketing strategy, and
21 compensation plans.
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21.
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24 and Unnamed Co-Conspirators, were: authorized, ordered, ratified or done, by their:
25 officers, agents, employees, or representatives--while actively engaged in the
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Ubiquity, and Awesome, at all relevant times, have been engaged in continuous and
5 systematic business in California, and/or have committed tortuous acts in this state.
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The individual Defendants have, at all relevant times, also been engaged in continuous
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8 and systematic business in this state and/or have committed tortuous acts in California.
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23.
The actions giving rise to this suit were undertaken by Defendants, at least
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12 headquarters within this district. In accordance with 18 U.S.C. 1965(a) and (b), the
13 Defendants are subject to this Court's jurisdiction, in that they "transact affairs" in the
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Central District of California and "the ends of justice require that other parties residing
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16 in any other district be brought before the Court, the Court may cause such parties to
17 be summoned, and process for the purpose may be served in any judicial district of the
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United States by the marshal thereof. (U.S.C. 1965[a] and [b]). In accordance with
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20 California's long-arm statute, California Code of Civil Procedure 410.10, this Court
21 has personal jurisdiction over the Defendant.
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24.
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24 Corrupt Organizations Act (RICO), 18 U.S.C 1961-1968, this Court has jurisdiction
25 over this action, pursuant to 28 U.S.C 1331. Because Well-Med assert state-law
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- 12 COMPLAINT
1 claims under the California Business and Professions Code, this Court may exercise
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5 because a substantial number of the acts and transactions that precipitated Well-Meds
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claims occurred within this District. Defendants did (or solicited) business, and
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8 transmitted communications by mail or wire, relating to StemFit Active and StemRenu,
9 in this district. Defendants also transacted their affairs in this judicial-district, and
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committed wrongful acts in this district, which have directly impacted the general
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12 public (of this district); the ends of justice do require that parties residing in other
13 districts be brought before this Court.
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20 and fine tuning of its business model. Throughout its existence, Well-Med has
21 continually strived to develop: (1) competitive, high quality health and wellness
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products that provide helpful benefits to Well-Med's customers; and (2) develop a
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24 highly motivated, fair and well compensated distribution network of IDs.
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27.
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an MLM model. Although Well-Med distributes its products through IDs, (each
- 13 COMPLAINT
1 operating their own businesses), these IDs agree to be bound by Well-Med's written
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Policies and Procedures. The Policies and Procedures (P&Ps) are a set of written
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principles and ethics that govern the IDs' representation of Well-Med, the sale of its
5 products, and the operation of each IDs business. Among other things, these P&Ps
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hold everyone associated with the company, including its IDs, to the highest possible
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8 ethical standards.
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12 downline through the theft of proprietary IDs lists, is a known improper practice in the
13 MLM industry. It is also in direct contravention of the P&Ps that the Unnamed Co14
Conspirators agreed to follow and were bound to by their affiliation with Well-Med.
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ambition and excellent sales results. They were high-volume sellers of Well-Meds
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After approximately three (3) months of being IDs for Well-Med, the
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Unnamed Co-Conspirators approached Mr. Thomas Lee, the Chief Executive Officer
27 of Well-Med (CEO Lee), about marketing a supplement using YTE. The Unnamed
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- 14 COMPLAINT
1 Co-Conspirators had been very successful selling another YTE extract based Stem Cell
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Protein supplement, a Laminine product (also created from stem cells taken from
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chicken eggs grown in Norway) at their prior company, LifePharm Global (Ex. 13).
5 CEO Lee was impressed by the by the Unnamed Co-Conspirators proposal, and the
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9 Group International, for Well-Med to purchase the product through. The Unnamed Co10
Conspirators signed the contract through their limited liability company, Ubiquity, who
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12 agreed to manufacture the Stemfit product and deliver it to Odyssey Group. In return,
13 Well-Med agreed to purchase Stemfit from Odyssey and market it through its current
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IDs.
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17 January 31, 2014. The contract also contractually bound the parties to an initial
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Purchases and sales of the products between OGI and UI under this agreement
shall be made by means of written purchase orders submitted by OGI to UI,
specifying, among other things, the number of units of each product ordered
under each purchase order, and the desired date and place of delivery. The
production lead-time shall be 6-8 weeks from receipt of the P.O assuming that
UI has access to the required packaging components 2 weeks prior to the due
date. It is the responsibility of both parties to confirm receipt of the purchase
- 15 COMPLAINT
order and agree on the delivery date within 3 days of receiving PO. If OGI does
not receive an acknowledgment, then it is to be assumed that the Receive by date
is accepted. If a product is not going to be ready on the agreed upon date, UI
agrees to inform OGI at least one week prior, so necessary arrangements can be
made.
7. Exclusivity
UI agrees that OGI is the exclusive sales channel for the StemFit Acitve product
and that UI will not sale nor distribute any similar product containing StemFit
active ingredients. Such exclusivity will remain during term of this contract and
the exclusivity will survive the termination for a period of six months.
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9. Assistance
(a) The information regarding the use of the product, marketing materials and
sales support shall be responsibility of OGI.
(b) UI shall also provide Buyer with documentation for the transportation,
regulation (such as FDA), storage, maintenance and general formulation of the
product.
10. Additional Cost for service
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UI has the right to charge additional fees for services other than specified above.
Term of contract.
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11.Term of Contract
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This agreement shall be effective for a period of 2 years, at which time the
agreement may be re-evaluated and renewed by mutual agreement of the parties
hereto. (Both parties reserve the right to determine whether to renew the
agreement or not renew the agreement.) During the term of this contract UI
agrees to continue to supply OGI with its products under the business procedures
and practices described in this contract.
This Agreement may be terminated by either party upon sixty (60) days written
notice to the other party. Notwithstanding the preceding, the obligations of the
parties shall continue hereunder with respect to the acceptance of payment of
any product ordered by OGI and the production of the product by OGI prior to
any such termination.
- 16 COMPLAINT
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34.
The initial response to the Stemfit product was positive. Well-Meds IDs
4 immediately took a liking to the product, and were enthusiastic about the products
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benefits. The product quickly gained a loyal following, as Well-Meds IDs are
7 predominately senior citizens, and baby boomers who are focused on purchasing
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11 marketing and selling Stemfit. Well-Med created marketing materials so that their IDs
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could market Stemfit, and build brand recognition. Well-Med IDs started having
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conference calls, hosted by high ranking IDs, such as the Unnamed Co-Conspirators,
15 who, at the time, were the President and Chief Product Strategist of Well-Med,
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respectively, and would become the spokespersons for the product. (Ex. 2, 15).
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19 Well-Med averaged 1,300 bottles a month in sales in 2014, and started to average 1,800
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to 1,900 bottles per month in 2015. For the months of: August, September, October,
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and November 2015, sales for Stemfit were 1,824, 1,962, 1769, and 1,949 units per
23 month, respectively.
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27 approached CEO Lee, and informed him that she was leaving Well-Med for personal
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- 17 COMPLAINT
1 reasons. She informs CEO Lee that she is leaving her partner, Unnamed Co2
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emotional to CEO Lee. Being sympathetic, CEO Lee shows compassion and asks that
5 Co-Conspirator Johnson stay on and train her replacement, Frania Viele. Co6
Conspirator Johnson agrees, and Well-Med continues to pay her $10,000 a month
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8 salary and she continues to receive commissions (which she received up until April
9 2016).
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12 assumption that the contractual relationship was intact and proceeded to place an order
13 under the same prior terms on February 1, 2016.
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Around this same time, (in early February 2016), Unnamed Co-
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16 Conspirator Johnson started reaching out to Well-Med employees and acquiring
17 Stemfit customer lists: can you tell me on this list who has ordered in the past 3
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months? Thanks, those are the ones we will need to call first. (Ex. 16).
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21 the Unnamed Co-Conspirators and NHT. For example, on February 22, 2016, he sent
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himself a list of things to do, to prepare for his departure from Well-Wed, which,
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24 included, but are not limited to (Ex. 17):
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3. Ask Tina if she would allow me to sponsor some of her direct peeps in my
lesser leg.
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As March 2016, comes, CEO Lee could tell things were not right with the
for 10,000 bottles of Stemfit; the Unnamed Co-Conspirators were holding up the order.
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15 counsel, Wellman & Warren, LLP, sent a letter to CEO Lee confirming Unnamed Co16
Conspirator Johnsons resignation from any and all relationships with Wellmed
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19 2015, as her resignation date, by saying that she resigned from her contracted
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relationships on December 14, 2015, during her in-person meeting with Tom Lee.
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23 Johnson to draw attention away from her tortious conduct, occurring in January and
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27 moles in Well-Med and asked for the Week 7 payouts for Stemfit, from Well-Med
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- 19 COMPLAINT
1 employees. She also solicited current Well-Med employees Justin Crowder, Judy
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Crowder, and Frania Viele. (Ex. 19). She then sent out an email about NHTs platinum
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philosophy, and states that the Well-Med IDs should promote NHTs gold or
5 platinum packages with auto-bank. Johnson also sent out links to the SteamTeam
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Index, a website operated by Dan Catto, and Joe Garcia. (Ex. 20).
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44.
The very next, day after allegedly resigning from Well-Medof any and
to Well-Med employees, and stated: use this NDA. (Ex. 21). In addition, Unnamed
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12 Co-Conspirator Johnson sent NHT marketing material, that had an estimated monthly
13 payout for specific titles at NHT (Bottom Line the total income at each of these Ranks
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is higher and much more the higher the Rank Achieved.) (Ex. 22). The document also
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16 discussed the specific triggers for different nationalities, for example:
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Johnson an email inquiring where Well-Med/Ubiquitys latest Stemfit order is, which
Johnson sends an email stating that she would send CEO Lee a mutual release
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document, and stated Once signed by both of us, I can get you the bottles of stem right
- 20 COMPLAINT
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46.
CEO Lee an email asking CEO Lee how she should send him an agreement concerning
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the order. She then sent a follow-up email that evening, stating that she needed a
5 response regarding the agreement (concerning the final order) by 5:00 pm, she also
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9 another on March 17, 2016, asking for him to sign a general release prepared by her
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law firm, Wellman & Warren, LLP, releasing Mind, Body, & Spirit, and Ubiquity
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12 International from any liability relating to the sale of the Stemfit. (Ex. 24). Again, in
13 the release, Unnamed Co-Conspirator Johnson tries to list December 14, 2015, as the
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termination date of her relationship with Well-Med. In addition, the release contains
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16 the language from the March 7, 2015, resignation letter, Johnson has resigned from
17 any and all of positions and relationships with Well-Med. She also warrants in the
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termination section: Johnson further represents and warrants that she has not retained
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20 any copies, electronic or otherwise, of any proprietary information. The release also
21 contains a provision that Unnamed Co-Conspirator Johnson is to be compensated in an
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amount of $5,000 for training Frania Viele up and until March 17, 2016.
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25 Justin Crowder asking him to edit the NHT Global Opportunity Presentation that was
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C. DEFENDANTS NHT, AWESOME, AND THE UNAMED COCONSPIDATORS GLOBAL AMBITIONS AND TORTIOUS
CONDUCT
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Well-Med believes that at least as early as October 2015, if not earlier, the
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8 move Stemfit and the loyal Well-Med customer base over to NHT. (Ex. 2, 5).
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50.
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- 22 COMPLAINT
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direct-selling and e-commerce company that markets premium quality personal care,
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wellness and quality of life products under the NHT Global brand. It has a market
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NHT 4 receives almost 91% of its revenues from Hong Kong and is
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8 attempting to grow its revenues in Southeast Asia, where MLMs are profitable.
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China has very strict MLM rules.5 According to the website China6, The
company is required to: have a business license, can only pay out one level of
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12 commission, the sellers have to follow an advanced training course offered by the
13 company and by the end of the course they have to get a license and the direct sellers
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must wear a badge to prove their status. In addition, the personal sellers commission
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16 it set at 30% of the sales, including bonuses, commission, and other benefits. Because
17 of the multi-level payment structure, the organizers and the members at top level obtain
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interest illegally and, according to the Chinese Government, disturb normal economic
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20 order, and affect social stability. On the contrary, in Taiwan and Hong Kong MLM is
21 legal. It is common to see salesmen from these regions selling in the mainland using
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Taiwanese or Hong Kong addresses and banks to become sales reps in these
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http://seekingalpha.com/article/3431806-the-numbers-dont-add-up-at-natural-health-trends-corp?page=2
http://seekingalpha.com/article/2496345-natural-health-trends-has-all-of-its-eggs-in-one-highly-unstable-basket
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http://www.china-briefing.com/news/2015/07/16/multi-level-marketing-china-isnt-buying.html
- 23 COMPLAINT
5
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1 jurisdictions while at all times living and working in China. The legality of this is
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questionable.
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54.
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regard to Southeast Asia and its sustainability. For example, on blogger, on the investor
7 blog site wrote an article entitled, The Numbers Dont Add Up at Natural Health
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Trends Corp. In the article, the author states his concerns he has with NHTs extremely
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high product prices and the possibility that NHT is selling products in China through
particular he states:
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Unlike non-MLM companies, which sell products at price points that reflect actual
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consumer demand, NHT Global sells products that are priced significantly higher
than any other comparable product.
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17 The final scenario, and most likely, is that the company doesn't sell products at the
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prices that are suggested. That shouldn't be too much of a stretch to conclude the
company can't sell $73 bottles of water to real consumers. Rather, it appears that the
company has little-to-no demand for the products sold. As is the case with many
MLM firms, revenue is recognized when sold to distributors. But unlike other MLM
firms, NHTC claims to sell 93% of products to actual consumers in China where
they are not allowed to have distributors. If the company only sells via e-commerce
in China, then why is there a direct correlation between revenues in that region and
the number of distributors in Hong Kong?
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24 In the protein shake example above, NHT Global's Triotein would need to sell to
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distributors for around $20. A review of various distributor websites and resale sites
like Alibaba reveal that the products sell at deep discounts in China.
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- 24 COMPLAINT
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55.
The author goes on to compare some general health products that are sold
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7
8
9
10
11
12
13
14
56.
15
16 plan that involved an expansion of the Well-Med MLM into Asia, as well as the Stemfit
17 product. It is believed that NHT lured the Unnamed Co-Conspirators to NHT by
18
offering them the ability to market StemRenu in China, and with other economic
19
20 incentives.
21
22
57.
All that NHT needed was a successful product launch of Stemfit and it
would be able to sell the product to its own downlines, as part of a product package.
23
24
25
26
27
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- 25 COMPLAINT
1
2
58.
3
4
April 2016, Well-Med received information that Defendants and the Unnamed Co-
5 Conspirators, directly and indirectly, were soliciting Well-Med IDs and customers to
6
join NHT.
59.
9 and Chief Product strategist, and formulator of StemFit Active to aggressively solicit
10
Well-Med IDs through, email, text messages, in-person, as well as social media
11
12 (including but not limited to Facebook). (Exs.7, 27)
13
14
60.
actively making contact with high ranking Well-Med IDs, about moving their
15
16 downlines to NHT from Well-Med. This campaign is targeted and designed to steal the
17 marketing methods employed by Well-Med IDs to market Stemfit, and to have Well18
Med IDs and employees spread false rumors about Well-Med, to foment dissent
19
20 amongst the ranks of Well-Med IDs, and create a rift within the company. (Exs. 15,
21 26).
22
23
24
March 2016
61.
25 campaign to raid Well-Med IDs for the StemRenu launch. Emails from Unnamed Co26
27
28
Conspirators Johnson to various active Well-Med IDs, demonstrate that she and the
- 26 COMPLAINT
1 Well-Med IDs were actively coordinating the raid and assisting in the StremRenu
2
3
4
62.
5 Johnsons lawyer sent her resignation letter, John and Judy Crowder send emails to
6
7
8 enrolled in NHT Global as StemReNu distributors while still employed at Well-Med.
9 (Ex. 26).
10
63.
11
12 circulate emails regarding NHTs enrollment procedures and packages. For example,
13 the Well-Med IDs discuss the StemRenu signup procedure (Ex. 27):
14
15
16
placement setting
17
18
settings
19
20
21
step 4 and all and paying their found on page this one might need to be
22
changed as they think the only cases are pain in her checkup will want to
23
24
verify
25
26
64.
27 consultant, and Unnamed Co-Conspirator Johnson also discuss some of the links that
28
- 27 COMPLAINT
1 NHT Global provides on its StemRenu training website, like motivational videos, such
2
65.
5 IDs to their website www.awesomesynergy.com. (Ex. 28). This email also includes a
6
StemRenu schedule for upcoming StemRenu training and marketing calls. She also
7
8 instructs the IDs to get their distributors into the system please work with response
9 or an outline support to make the stop and. She also attaches the enrollment packages,
10
but stated, however, the StemRenu is not available for 3-4 weeks.
11
66.
12
15
16 (Ex. 29).
17
18
67.
On or around March 16, 2016, Mr. Crowder emails himself a list of Well-
Med IDs that he later intends to call and solicit to join NHT. (Ex. 30).
19
68.
20
21 moles at Well-Med began to actively raid Well-Meds IDs, and solicit them to join
22
NHT.
23
24
69.
- 28 COMPLAINT
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5
6
greetings Tina: you dont know me but I used to use Stemfit. Got an
email the other day that said you and Chris Morris were no longer with
the company. I dont need the details but I want to know what happened
to Stemfit. Is StemRenu the same product? Is it a different product? Did
Wellmed Global keep the original recipe? Basically am I going to be
getting the same product of the same quality and integrity. And any info
you can pass on is appreciated. (Ex. 31)
70.
7
8 Justin: can you see who this person belongs to in WMG? She may need your help.
9 Thanks, T. Justin sends a response on March 21, 2016, who was a Well-Med employee
10
up until 4/1/16, with the name of the up-line ID at Well-Med who sent the inquiry to
11
12 Unnamed Co-Conspirator Johnson. (Ex. 31).
13
14
71.
15
20
You should contact him. He wants to get into NHT but doesnt like his
current sponsor. He is in my downline so I told him I couldnt sponsor
him because I have to keep line integrity. Put him on your inside leg you
can assure him then they wont see he is in. Can you also get and info on
how you can buy daily, etc. directly? He called the office and talked to
Ivan that he wanted to buy Stemfit but didnt want to work with his upline.
Let me know if you need his phone number or email.
21
72.
16
17
18
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22
Around this time, the Unnamed Co-Conspirators are also directing Well-
Med IDs that have questions about the Stemfit product, to visit their new NHT site
23
24
- 29 COMPLAINT
1
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73.
On March 29, 2016, Crowder sends another email to the Unnamed Co-
3
4
74.
Hey Don, please keep this confidential until I leave Well-Med Global.
In regard to our conversation here the Information, the check out
www.awesomesynergy.com and watch some of the webinars.
Ill call you later after you get out of work to go over all of the details and
get you positioned if you would like to do that.
75.
These are but a few of the instances of the blatantly unlawful and unethical
11
12
13 Med of its IDs and their downlines, to ensure the successful launch of NHTs
14
StemRenu.
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16
17
18
April 2016
76.
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20
77.
21 with Karyn Simmons, NHTs Vice President of Global Marketing, regarding potential
22
dates for the StemRenu seminars: Tampa April 27, Atlanta April 30, Minnesota
23
24
May 2 opened May 4., LA HOC test May 7. Chicago? Houston? New York?
25 Vancouver? (Ex. 36). Well-Med has a strong presence in the above listed cities and
26
believes Un-Named Co-Conspirators may have chosen them because of this fact.
27
28
- 30 COMPLAINT
1
2
78.
associates instructed the Well-Med IDs to obtain their downline information from
3
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6
7
8
9
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79.
A critical issue for the Well-Med ID converts arose during April 2016
11 concerning the new pricing for StemRenu. Specifically, the Well-Med ID converts
12
want to know how NHT is going to handle the pricing for StemRenu. On April 7, 2016,
13
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All I am interested in is Stemfit whatever the new name will be and that
it will be as good as before. Can you give me the bottom line of the ways
I can get Stemfit to people I know that still want it? What are the up front
costs such as having to buy a package or some type the $60 dollar price?
How much would cost the borrower for Preferred Customer?
Getting people to buy frontload packages or a bunch of products is no
longer working. Im not saying that your new company is doing this, but
it concerned me when you said you would need by a top package (Gold?)
Become eligible to the get Stemfit for $60.
23
80.
The same rep wrote another email to Crowder on April 7, 2016, informing
24
25 Crowder that he was able to obtain certain reports from Well-Med (Ex. 39):
26
27
I was able to recover this report from my system. Its a good thing it
appears that WMGs shutdown our ability to run the Unilevel Team
28
- 31 COMPLAINT
1
2
Report. At least this report will give a something to work with. It looks
like we can identify distributors who were sponsored multiple people and
focus on them. Please let me know if this will work.
3
4
81.
5 Med Ids on where to place the IDs in their binary downlines at NHT (Ex. 39):
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Beth Anne: I now have Jens highest and lowest levels enrolled and I
will get Marys pending order taken care of in the next couple of days
here. So I have two more people that Im going to enroll as distributors
personally and I need to know where to place them. Seems to me I would
want to personally enroll at least two more distributors one of my right
and left under my lowest level to qualify that level correct?
Tina: Dont put any of your personally enrolled on your right. We talked
about this. Build on your far left.
Beth Ann: OK I must have misunderstood. I thought you said that I need
at least one person on my left and right in order to qualify that level?
Tina: Dont you already have Mary on your right?
Beth Ann: Yes my highest level has a right and left. Im talking about my
lowest level. Isnt it the best to qualify that one is well? I have at least two
more people interested in being distributors possibly more.
Tina: STOOOOOPPPP!!!: There is no upper and lower level its a left
and right you only need one of your people that he is a distributor on your
left one on the right. That part you have done. From now on everyone you
personally enroll put on your left outside leg write that note down. Please
do not ask me again!!!
Beth Ann: OK I wont aske again. Im really confused now because this
seems contrary to what I was told before. But I will do as you say this
time.
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26
Tina: Oh for god sake were gonna have to talk later on today.
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- 32 COMPLAINT
1
2
82.
IDs to NHT for the StemRenu launch. For example, an NHT support member ccs Jung
3
4
Chen, an NHT Operations Manager, in an email dated April 24, 2016, instructing the
Dear Justin; Please help out the Well-Med Distributor. Thank you. Dont
hesitate to ask when you have any queries.
7
8
83.
9
10 Global Marketing, also instruct the Unnamed Co-Conspirators on how to market
11 StemRenu, and what claims they can make about the product. (Ex. 42).
12
84.
13
14 distributors advertise and send invitations to webinars on social media. For instance,
15 one distributor makes the following statement, in conjunction with a posting for a
16
webinar: We are launching a New Breakthrough Product thats worth millions. (Ex.
17
18 43).
19
85.
20
StemRenu is sent out to potential distributors and recent Well-Med ID converts. The
21
22 email states, in relevant part (Ex. 44):
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26
27
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Buy StemRenu NHT Global formally Stemfit Active now with 10%
more
Next Generation Nutrition!
Experience a Multifaceted Benefits of StemRenu
10% more in each Cap the Stemfit Active Product
- 33 COMPLAINT
86.
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7
10
Toward the end of April 2016, NHT distributors start to question the
pricing structure for StemRenu that NHT is about to impose. Many Well-Med IDs
11
12
were led to believe by the Unnamed Co-Conspirators that they could purchase
13 StemRenu under similar terms to those Well-Med offered. For example, on April 28,
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Im not going to take time to go into any more products because I dont
think of using many of them (I cant afford them) and I would be willing
to bet and not be surprised if and when they raise the price on StemRenu
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- 34 COMPLAINT
26
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7
Do you know if that is in the works? Even though I use two bottles a
month., I still have 5 bottles of the Stemfit because I took advantage of the
5 bottles +1 free Special (twice) when Well-Med offered them this year.
Of course, I knew something about these bit changes at the time, I was
just trying to save money.
I have been on most of the calls but sure dont understand the marketing
plan and dont know how much of this Co., and these products I will be
sharing with other people anyway. My friends, (seniors like me) dont
have the money either, I dont think.
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87.
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There are ways to be able to get deeper discounts at the Gold Level for
the other products. I understand your concern with the cost of some of the
them.
Yes, stem would eventually be increased in price. Even if we were at the
old company across increased pricing would have changed.
Im not sure when or how much it will increase.
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18
If you would like to learn a deeper discount please work with Justin as
the understand how you are your way there.
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I certainly dont want to rule anything out as far as your potential to share
products and be able to earn extra money. Francis is a woman in her 70s
who is doing really well with the NHT business. Joe has mentored her
over the last year and she now makes about $15,000 a month.
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May 2016
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- 35 COMPLAINT
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88.
launch on the false statement that only NHT would have the YTE supplement product.
3
4
However, the key ingredient used in Stemfit, StemRenu, and StemfitActive is YTE,
7
8
89.
The fact that NHT is not the sole source of a YTE-based supplement starts
9 to become a major issue for the recent Well-Med converts in May 2015 (they were
10
specifically told that only NHT Global would have the supplement).
11
12
90.
13 unlawful and unfair business practices, Well-Med releases its own improved YTE14
based, successor: StemActive, the 2nd generation of Stemfit. The supplement contains
15
16 25% more YTE than Stemfit, with additional supplements, such as Rishie-Mushroom
17 extract and Shilajit extract. (Ex. 46).
18
91.
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20 distributor, who was switched over from Well-Med without her knowledge, writes the
21 following email (Ex. 52):
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- 36 COMPLAINT
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92.
NHT and the Unnamed Co-Conspirators claims about StemRenu. (See Exhibit 46
3
4
5
6
[Steve, you said Well-Med was out of the business of the egg extract product.?])
93.
Prior Well-Med IDs, who had switched to NHT based on the claims of
the Defendants and the Unnamed Co-Conspirator are impressed by the new Well-Med
7
8 YTE based product: (Ex. 47.)
9
10
11
Your still there, I am sure its been a tough time for you and Ivan. This
new products sounds INCREDIBLE! REISHII and Ganoderma are two of
my favorite products. I wish you had Ganoderma coffee! She ordered free
sample for her husband (Rick Jones.)
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13
94.
Med through webinars and a series of emails disseminated to the NHT StemRenu IDs
16
17 (Ex. 48,49):
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22
Hi All:
Here's what you should know about the Stem product WMG has come up with
to replace Stem Fit Active which is now only available as StemRenu with NHT
Global. There will soon be a team call with Dr. Chris Morris to explain it further
and answer your question but the info below should answer most of your
concerns.
23
Here are some key points about the StemActive product from WMG:
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28
1. Shilajit, a key ingredient in the product, alone will degrade the other
ingredients, especially the Signal Proteins in the egg. Shilajit is also
known to increase uric acid in the body and is not recommended for
anyone suffers from gout: http://www.herbslist.net/shilajit.html
- 37 COMPLAINT
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2.The YTE may be degraded because of the age of the extract. There is
also no way to know how it has been stored or preserved. It does not
come from the current producer of YTE who has an exclusive agreement
with Chris & Tina.
3.WMG claims that StemActive has 25% more YTE than the StemFit
Active. Chris and Tina own the Stem Fit formula and they have never
revealed to WMG how much YTE is in the formula. To say there is 25%
more in the StemActive is impossible for them to know.
4. StemActive contains Magnesium Stea rate, an ingredient that is
potentially dangerous for human consumption. See:
http://articles.mercola.com/sites/articles/archive/2012/06/23/wholefoodsupplement- dangers.aspx
11
14
Listen to Tina & Dr. Morris discuss how to look at products and their
legitimacy: 712-775- 7039 Code: 808470# (skip forward to Chris after
Dan and Joe speak) I am working out a day and time for a-team call with
Dr. Chris Morris. Stay tuned.
15
95.
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13
16
day with the new NHT StemRenu distributors, to disparage Well-Med and its
17
18
19
20
StemActive.
96.
concerned about Defendants statements about the new Well-Med product (Ex. 48):
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22
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24
Im sure by now you have seen this...it was passed along to Darla, who
signed me on to WellMed..this only raises concerns..Im not sure who to
trust on this product.The info he submitted contradicts itselfId like
a free sample.
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26
97.
Around the same time, Well-Med IDs who had recently transferred to
- 38 COMPLAINT
1 Stemfits availability), again question NHTs pricing of the product, and began to
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Our main concern is that customers who were told the price would
remain $60 for some time. Many of those customers have stocked up on
Stemfit and are not ready to order yet. Not their fault the transition of the
drawn longer than anticipated! They will not be willing to purchase a Gold
pack and to even suggest that as an option indicates a corporate mind set
that has ever been in the field. Our customers (NOT business builders or
distributors) were told the price of $60 would be honored in the move over
to NHT and to change the price so drastically in such a short period of
time is less than ethical and will have lost most of them and gained nothing
but ill will.
We would like to see a programing change that honors the $60 price until
early September 30th so that we can bring them over and prepare them for
the inevitable price increase of $85+. Anything less than that is not
acceptable in our opinion.
This would be for preferred customers only with a cut off date of May 31.
(or 29th.) but provides at least the bulk of this month to contact them and
provide them with a preferred customer position (likely restated for the
distributors) until they are ready to order stem again. The incentive is for
them to come over this month to be able to purchase at $60 whenever there
ready or they will not be guaranteed that price because the product has
been improved. We can deal with the price increases as we approach the
month of September and not lose them to WMG which WILL happen if
the present proposal in your email is put in effect.
We believe a program can be created to accomplish this and NHT should
be happy to comply from a financial point of view rather than lose
customers not only for stem, but the ability to purchase and the other fine
NHT products. I believe its called the loss leader and done by every
retailer of article.
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- 39 COMPLAINT
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98.
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6
below is information back for parent in regard to our request. This is for
your eyes only and is not the order sent to anyone else energy this is the
inner circle only for those listed on this email.
From corporate:
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99.
Unnamed Co-Conspirators regarding the launch of the Stemfit Active, the email states
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20 (Ex.50):
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the call last night but we need a coordinated response that has credibility
and it needs to come from you and Tina, and fast. WMG is making us look
like liars and this going to hurt our NHT businesses if we don't respond
assertively.
We knew Tom was going to do something. The disappointing thing is that
he actually has YTE. I Wonder if we are going to face the same thing from
TLC when they introduce their competitive product. This is why NHT
MUST work with us if they want us in their game. I understand the
pressures of dealing with a global distributor base and the need to
standardize everything but they have to understand that none of us would
be within 100 miles of NHT if it weren't for the StemRenu and the two of
you.
Their compensation plan is, without a doubt, the most unfriendly in the
industry as it serves only those who want to build a major business. Their
bracket pricing system puts the StemRenu out of reach for people
who do not want to invest in being Gold and Joe's solution for dealing
with our PCs, who will not or cannot pay the higher price, is not something
that most distributors will be willing to do.
NHT has a choice, at this point: understand the very difficult situation we
are in, and make some major concessions that recognize the culture of our
WMG organizations, or lose a lot of people. It would be one thing if our
people had no choices but, good or bad, now they do. One thing, we can
be sure of is that all our people will order the free sample of the
StemActive. Who knows where it will go from there. If the product does
not work, as you say Chris, things could workout in our favor. But, that
will take time and, with the looming deadlines from NHT on bracket
pricing, etc, we could be hit hard over the next couple of months.
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22
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I'd like to suggest a call with the original inner circle group to discuss how
we respond to this situation. You can bring the others in later but I feel
that it will be more productive to keep it small. Let's do it today.
I am available before 11:30 am ET or after 2 pm ET.
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- 41 COMPLAINT
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And on top of that we would be glad to a call with you and your group as soon as you.
June 2016 through the Present
101. June 2016: the NHT master distributor sent emails in support of the
7
8 Unnamed Co-Conspirators and their false statements. The following email is sent on
9 June 30, 2016 (Ex. 53):
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- 42 COMPLAINT
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What does this mean to you? Well with the growth we are
having Globally including domestically and the new country
openings India, Peru, Malaysia timing as a business opportunity
could never be better for you and your family.
Just ask yourself this question have you ever been apart of an
opportunity that checks off everything that one should look for in an
business opportunity?
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If you have not reached out to me prior to this email please take the
time to
call me.
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102.
17
Despite the false statements made by Defendants and the Unnamed Co-
20
Conspirators about Well-Med, previous Well-Med IDs are starting to return to Well21
22 Med.
23
103. Many of these IDs are quite apologetic, and glad to be back at a company
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25
- 44 COMPLAINT
1
2
104. For example, Well-Med IDs have sent CEO Lee the following emails
(Ex. 54):
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I was invited to the secret non-recorded call w/ Tina & Chris and a handful of
people and I took notes Chris- imitation is the most sincere form of compliment.
T & C have the patents & exclusivity in place..Tina- Well Med says they have
25% more YTE extract. That is a false claim. They dont have access to the vault
where that info is. Tina has exclusive w/ Norway. T & C have the studies. Lots
of YTE on the black market. YTE will run out! T & C have exclusive contract
w/ manuf. YTE is frozen, thawed, frozen again. integrity of the product? It very
temporary, so why sue them (WM)? In 6-12 months most likely will run out.
Chris- only one source for product- them!...This is why we thought Well Med
was the aggressor. And the leaders I spoke to were worried about moving back
to WM and then having it fall apart after 6-12 months, and then have to re-group
again. We felt we1d lose everyone if they had to go through that.
This is when all the melt down started. Awesome Synergy Newsletter via email:
IMPORTANT NEWS! (News means its NOT a reminder) Beginning July 1st
tiered pricing for StemRenu goes into effects NO mention of what that would
look like. This is when the realization of betrayal started to sink in Tina & Chris
knew this was coming & didnt give anyone full information so they could make
an informed decision. Networking with several people helped me understand
NHT is a publicly traded co. w/shareholders to keep happy, so their PROFIT
MARGINS require a structure with higher pricing. So again, this was planned
from the beginning. And Ive never witnessed such pressure and bullying from
successful leaders to get new people in a co. and to buy more than they can truly
afford.
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- 45 COMPLAINT
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5
106. Also, several Well-Med Ids mentioned that they were switched without
Thank you so much for the sample bottle. So evidently my upline changed to
StemRenu without my knowledge. What would it take for me to become a
distributor of StemActive?
10
107. Although some of the Well-Med reps are returning the effects of the
11
Unnamed Co-Conspirators raid on Well-Med has been devastating, and taken a great
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19 April 2013.
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22 by the Well-Med Policies and Procedures ("P&Ps"), which, among other things,
23 prescribe certain rules of conduct. A true and correct copy of Well-Meds P&Ps are
24
- 46 COMPLAINT
1
2
110. The Agreement and P&Ps contain a choice of law provision incorporating
California law by enrolling as IDs, Unnamed Co-Conspirators agreed to abide by the
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8 distribution for Well-Med and to build the business as Well-Med IDs.
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112. During the time of their affiliation with Well-Med, Unnamed CoConspirators were appointed President and Directors of Product Marketing,
11
12 respectively.
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16 and non-solicitation prohibition. (Ex. 54, Sections 3.9.1, 3.9.2 and 3.9.3)
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- 47 COMPLAINT
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- 48 COMPLAINT
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distribution network.'! of other IDs, and depend on the integrity of those networks, 5
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attempting to recruit a representative from its own downline, other than a representative
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recruit B).
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- 49 COMPLAINT
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119. The Well-Med P&Ps prohibit raiding. For example, 3.9.3 provides, in
part, that:
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- 50 COMPLAINT
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7 Well-Med IDs are prevented from presenting, recruiting, attempting to enroll, or
8 assisting in presentation of other multilevel marketing business ventures to any non9
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122. Sections 3.2.5, 3.9.4 also restricts Well-Med ID activities with respect to
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15 the company trademark, propriety information, and trade secrets. It provides, in
16 pertinent part as follows:
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WELLMED GLOBAL will not allow the use of its trade names,
trademarks, designs, or symbols by any person, including WELLMED
GLOBAL Independent Distributors, without WELLMED GLOBALs
prior written permission. Independent Distributors may not produce for
sale or distribution any recorded Company events and speeches without
written permission from WELLMED GLOBAL nor may Independent
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in the P &Ps are: 1) to protect the businesses, hard work, and protectable business
and trade secret, proprietary, and confidential business information, without which
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of distributors is very sensitive to disparaging and negative news. When word gets out
21 that downlines are being raided, it has a substantial negative effect on the morale and
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efforts of the other IDs and does substantial damage to the company.
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- 53 COMPLAINT
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well as the multi-level marketing industry in which Well-Med operates. Savvy industry
5 participants like Defendant and the Unnamed Co-Conspirators are aware of not only
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Well-Meds covenants and trade secrets designations, but are also aware that virtually
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8 every industry participant imposes such covenants and makes such designations.
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126. Despite Well-Med's best efforts, and a cease and desist letter sent on or
about May 2016, Defendants, to date, have refused to cease their wrongful conduct,
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12 and, in fact, have continued to solicit and attempt to recruit Well-Med IDs and
13 customers to join NHT. As such, injunctive relief is necessary to prevent Defendant
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racketeering activity.
129. The Well-Med have standing since they have been injured in their
business or property proximately caused by the conduct constituting the violation.
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130. Proximate cause exists with respect to Well-Meds RICO claim against
the Defendants due to the direct relation between the injury asserted and the injurious
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8 through which unlawful activity is committed pursuant to 18 U.S.C. 1961(4).
9 Defendant NHT, is a Texas corporation, with its principal place of business in
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12 qualifies as an enterprise under 18 U.S.C. 1961(4).
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132. Defendants operated through the NHT enterprise and, or in the alternative,
the Defendants operated through the individual Defendants and Unnamed Co-
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16 Conspirators, and all of them, as a group of persons associated together for a common
17 purpose of engaging in a course of conduct, which under the law can also be considered
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an enterprise.
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134. The Defendants and Unnamed Co-Conspirators are enabled to commit the
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24 predicate offenses by virtue of their position in the enterprise or involvement in or
25 control over the affairs of the enterprise and the predicate offenses are related to the
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activities of that enterprise. Specifically, Defendant NHT uses its high level
- 55 COMPLAINT
1 representatives, such as Joe Garcia, and corporate officers, to add legitimacy to the
2
StemRenu product. The NHT enterprise routinely defends the unlawful actions of the
3
4
Unnamed Co-Conspirators in marketing materials, and has ratified the unlawful acts of
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8 racketeering activity to require at least two acts of racketeering activity. There is a well9 established relationship between the predicate acts, which are the repeated commission
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12 1343, which includes fraud by wire, radio, or television, as the Defendants and
13 Unnamed Co-Conspirators devised or intended to devise a scheme or artifice to
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16 representations, or promises, transmits or causes to be transmitted by means of wire,
17 radio, or television communication in interstate or foreign commerce, any writings,
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signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice.
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136. The repeated and continuous acts of wire fraud by Defendant and
- 56 COMPLAINT
1 and ongoing injuries to their business or property. The factor of continuity plus
2
5 the essential nature and scope of the enterprise and intended to participate in it and thus
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business organization of IDs due directly to the theft of trade secrets and wire fraud of
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12 the Defendants.
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139. Well-Med repeats and re-alleges each and every allegation contained in
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18 the paragraphs above, and incorporates the same herein by this reference, as though set
19 forth at length.
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140. Well-Med and Defendant Ubiquity entered into a contract on January 31,
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22 2016.
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141. Well-Med did all, or substantially all, of the significant things that the
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contract required it to do paid all time, 10,000 bottles per order. The contract had no
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- 57 COMPLAINT
1 time tables. Over the life of the contract, Well-Med ordered in excess of 100,000
2
bottles.
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142. That all conditions required by the contract for Defendant Ubiquitys
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8 prohibited from doing under the terms of the agreement.
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17 the paragraphs above, and incorporates the same herein by this reference, as though set
18 forth at length.
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21 covenant of good faith and fair dealing, which binds the parties thereto, and is
22 enforceable by either of them.
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147. As set forth in greater detail above, Defendant breached the implied
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25 covenant of good faith and fair dealing, by abusing his discretionary authority. Without
26 limitation, Defendant engaged in the following conduct:
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- 58 COMPLAINT
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a. tortuously
interfered
with
Well-Meds
prospective
economic
interests/contacts, in the form of its IDs and right to sell YTE based
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supplement products;
b. diverted actual or prospective business of the Well-Med IDs to
Defendants and the Unnamed Co-Conspirators;
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12 fair dealing contained within this agreement, and as a direct and proximate result of
13 Defendant's breaches, as above-described, Well-Med has been damaged, in the form of
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150. Well-Med had and has a validly existing contractual relationship with its
23 current and former IDs in the form of ID agreements. This relationship obligates
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current IDs not to directly or indirectly recruit Well-Med Customers and IDs for
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another business venture through the use of Well-Meds trade secrets, including lists
- 59 COMPLAINT
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8 the breach of these covenants through the unpermitted use of Well-Meds trade secrets,
9 including lists of IDs and Customers in Well-Meds downline business organization,
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12 products, theft of contact information for customer lists, and Well-Meds downline
13 business organization, with the specific understanding and intent that these IDs would
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16 covenants, and also by directly and indirectly assisting the IDs in violating the
17 covenants, with knowledge of the covenants.
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153. Because of the Defendants and the Unnamed Co-Conspirators actions, the
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20 covenants have been and continue to be breached.
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proven at trial.
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derives substantial revenue from Customers continued purchases, and has a reasonable
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8 expectation, based on a long history, that the vast majority of Customers who ordered
9 from Well-Med in one month will order again in the future.
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12 interfered with Well-Meds expectation of continued revenue from IDs by recruiting
13 IDs and by recruiting IDs with the expectation and intention that they would in turn
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recruit IDs.
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17 wrongful because the Defendants and the Unnamed Co-Conspirators accomplished the
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interference using the improper means of (a) inducing the breach of non-solicitation
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20 covenants by misappropriating trade secrets in the nature of Well-Med downline
21 business organization lists of IDs and Customers, illegal income representations, and
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defamation of Well-Med, and its products, and theft of its downline business
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24 organization and (b) inducing and perpetrating the misappropriation of trade secrets
25 belonging to Well-Med.
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- 61 COMPLAINT
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161. As the Unnamed Co-Conspirators were the President and Chief Product
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at strategist at Well-MEd, they were obligated to disclose to Well-Med all facts relevant
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to Well-Meds wellbeing, as set forth above in the incorporated allegations, and were
13 under duty not to provide materially false information to Well-Med, and refrain from
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162. Although under a duty to do so, Defendant failed to disclose some or all
Med, which Defendant knew to be false at the time they were made, and which Well-
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Med and its IDs relied on to his detriment, including, without limitation, the following:
That Unnamed Co-Conspirators hereafter was complying with the
agreement they had made with Well-Med, when, in fact, Unnamed CoConspirators were not doing so.
That Well-Med only had a two to three-week supply of Stemfit left.
That only the Unnamed Co-Conspirators had access to YTE.
That StemActive did not have more 25% more YTE extract Stemfit.
163. To his detriment, Well-Med justifiably relied upon Unnamed Co-
27 Conspirators fraud in connection with the matters which are the subject of this action.
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- 62 COMPLAINT
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164. Well-Med only became aware within the past few months of Unnamed
Co-Conspirators failures to disclose and false statements as aforesaid. Before then,
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Well-Med neither knew nor should, in the exercise of reasonable diligence, have
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8 Well-Med has been damaged in a sum not currently known to him. Said damages
9 include, without limitation, lost business opportunities and fees paid to the Unnamed
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Co-Conspirators, that otherwise would have been paid for out of to Well-Med.
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16 and damages arising from lost product sales and trade libel.
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20 entitled to punitive and exemplary damages against Unnamed Co-Conspirators,
21 pursuant to Civil Code 3294.
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- 63 COMPLAINT
1
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3 disparaged the quality of Well-Meds products and services, specifically Stemfit and
4 StemActive.
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170. That the statement was made to a person other than. In this case, the
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That StemActive did not have more 25% more YTE extract Stemfit.
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172. That Defendants and the Unnamed Co-Conspirators knew that the
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statement was untrue/ acted with reckless disregard of the truth or falsity of
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18 the statement.
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173. Defendants knew or should have recognized that someone else might act
in reliance on the statement, causing Well-Med financial loss.
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174. Well-Med suffered direct financial harm because someone else acted in
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in the preceding paragraphs of this Complaint as though fully set forth herein.
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meaning of California Civil Code 34-2601, et seq. Although, Well-Med's IDs and
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Customer Information reports and lists are not exclusively for the benefit of its IDs,
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Agreement Terms and Conditions and the Well-Med P&Ps set forth supra in that the
17 integrity of the trade secrets in the form of proprietary lists of IDs and Customers is
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25 value to Well-Med from not being generally known or readily ascertainable. Well-Med
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has made efforts that are reasonable under the circumstances to maintain the secrecy
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- 65 COMPLAINT
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implied duty not to disclose or use the reports or the information contained therein after
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8 any termination of the Unnamed Co-Conspirators status as Well-Med IDs. Well-Med
9 provided such information to other IDs subject to the same duty on the part of the IDs.
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12 regarding the Unnamed Co-Conspirators former Well-Med downline business
13 organization.
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16 reason to know that the information was acquired through the breach or inducement of
17 a breach of a duty to maintain the secrecy of the information.
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20 without any express or implied consent from Well-Med. Defendants' disclosure and/or
21 use occurred after Defendants had acquired knowledge of the ID/Customer Information
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- 66 COMPLAINT
owed a duty to Well-Med to maintain the information's secrecy or limit its use.
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Code. The Defendants have been unjustly enriched and therefore their unjust
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8 enrichment should also be taken into account in determining the loss suffered by the
9 Well-Med. The misappropriation is willful and malicious and Well-Med are therefore
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entitled to an award of exemplary damages in an amount not exceeding twice any award
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12 made, and since willful and malicious misappropriation exists, Well-Med is entitled to
13 an award of reasonable attorney's fees and costs as the prevailing parties including a
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reasonable sum to cover the services of expert witnesses used in preparation for and
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16 during trial under California Civil Code, 3426.4.
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185. Well-Med repeats and re-alleges each and every allegation contained in
21 the paragraphs above, and incorporates the same herein by this reference, as though set
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forth at length.
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25 Competition Law (UCL), Cal. Bus. & Prof. Code 17200 et seq. Section 17200 of
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1 the Cal. Bus. & Prof. Code prohibits unfair competition by prohibiting, inter alia, any
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5 committed acts of unfair competition, as defined by the UCL, by, among other things,
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engaging in the acts and practices described herein, including but not limited to:
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8 defaming Well-Med, slandering Well-Med to members of the business community, and
9 raiding its IDs. Defendants conduct as herein alleged has damaged Well-Med by
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defaming it and interfering with prospective business opportunities, and therefore was
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12 substantially injurious to the Well-Med, and caused him to lose money and/or property
13 as a result of such conduct.
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16 California laws mentioned in the above paragraph, constitute a separate and
17 independent violation of the UCL. Defendants conduct described herein violates the
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189. Well-Med seeks restitution and equity and such other legal and equitable
21 relief from Defendants unlawful and willful conduct as the Court deems just and
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1.
2.
3.
4.
5.
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For such other and further relief as the court deems just and proper.
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Respectfully submitted,
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