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Organo Gold Scam – Is Organo Gold Really a Pyramid Scheme?
1. It is not real gold
Organo Gold claims to be a multi-level marketing company; however, in reality it operates more like a pyramid scheme due to its emphasis on recruiting salespeople rather than selling its products. Furthermore, they charge steep start-up costs and utilize high-pressure motivational events as promotional mechanisms for their business.
Due to being unregistered with Guyana Securities Exchange Commission and therefore evading taxes, numerous complaints from members of the public have surfaced against this business. A spokesperson from this particular company denies all accusations that it operates a pyramid scheme and maintains that these are false allegations.
Appellants, a group of businessmen who control and operate Organo Gold business, were found guilty of trade secret misappropriation, tortious interference with contracts, unjust enrichment, fraudulent transfer and breach of fiduciary duty by a jury trial in AmeriSciences’ bankruptcy trustee’s claim for compensatory damages of $3,461,166. Based on that judgment and verdict from AmeriSciences’ bankruptcy trustee compensation trustee compensation claims of $3.461,166 have been awarded compensatory damages by judge HAYNES, GRAVES and DUNCAN will decide this appeal before it finally comes before United States Court of Appeals for Fifth Circuit review of this appeals case
2. It is not a safe investment
Many Guyanese have fallen prey to Organo Gold Scam, an “MLM” business making noise in local media and holding weekly colloquiums to lure in potential clients. Furthermore, Organo Gold also promotes itself as an investment opportunity, which is illegal under Guyana law.
Marlin Johnson brought this lawsuit against Organo Gold International, Inc., Organo Gold International LLC and Holton Buggs (collectively “OrganoGold”). Johnson claimed he suffered severe complications following gastric bypass surgery due to drinking Organo coffee with Ganoderma Lucidum contained therein, leading to complications following surgery itself. Johnson demanded both compensatory and punitive damages from those defendants.
The jury held Appellants responsible for trade secret misappropriation, tortious interference with contracts, unjust enrichment and fraudulent transfer. Tow employed an expert witness to appraise the distributor list; Appellants attempted to exclude him through Daubert objections that proved ineffective before being denied by the district court. Furthermore, they claimed that jury charge erred by not including specific questions on damages for each claim or instructions regarding fraud on the mark claim.
3. It is not regulated
Organo Gold, though described as a multi-level marketing company, has not registered with Guyana and does not pay taxes. Furthermore, representatives are actively promoting it at high-pressure motivational events.
The district court found Appellants responsible of trade secret misappropriation, tortious interference with contracts, unjust enrichment, fraudulent transfer and breach of fiduciary duty; as a result it awarded AmeriSciences trustee Rodney Tow with compensatory damages totalling $3,461,166.
Appellants contend that the district court made an error in admitting expert testimony by Scott Weingust, an expert who estimated the value of distributor networks. According to them, Weingust’s methodology was flawed and should have been excluded as expert testimony. Finally, they contend that improper instructions were given regarding fraudulent transfer claims by the judge.
Defendants’ arguments in this appeal lack substance. They assert a number of flaws in the evidence, such as AmeriSciences providing Weingust with full access to its database; Skirm and Cocheu agreeing that the list was both trade secret and confidential information; and Skirm writing a computer program to convert data into Excel file for easy transference to Appellants. Nonetheless, evidence from record demonstrates this information is highly valued by both parties involved and easily qualify as trade secrets.
4. It is not backed by gold
Organo Gold may claim otherwise, but their business model is actually MLM (Multi-Level Marketing). This means if you recruit more people into your MLM network you will make more money; however, this process takes time and effort. Furthermore, you must pay marketing costs that put their products directly in front of potential customers which could easily reduce profitability over time.
MLM enterprises operate by selling goods and services through an extensive network of independent salespeople or businesses known as independent representatives (IRs). A primary IR receives commissions on sales made by downline representatives recruited by him or her; defendants and Rasmussens operate as independent representatives in Titan Global’s multilevel marketing enterprise which offers cable, internet services as well as nutritional supplements sold under Organo Gold brand name.
Plaintiffs allege that Defendants committed racketeering acts using wire fraud, which caused them injury. In order to have standing to bring a private RICO action, a plaintiff must demonstrate that alleged racketeering activity caused or contributed directly to their injury; unfortunately for Plaintiffs this hasn’t happened here and therefore the court finds them wanting.
Plaintiffs also brought five other business tort claims against Defendants, in addition to wire fraud. Unfortunately, however, these suits lack Article III standing as they cannot demonstrate that Defendants violated or interfered with any contract between ACN and them (IR Agreements); those agreements disclaim any guaranteed earnings for the IRs involved.
Organo Gold has had previous legal trouble. In June of 2012, a group of Guyanese businessmen filed a suit alleging illegal operations by Organo Gold in Guyana. Although the court threw out this case in November, Organo Gold continues to operate without being registered and avoid taxes altogether.
