LifeVantage President Encourages Distributors to Break FDA and FTC Laws

The following is a guest post from Vogel. In the interest of getting this out there as quickly as possible we'll keep it in its raw/unformatted form and make it more reader friendly soon.

I just came across a video that can rightly be called a smoking gun. The following video was posted to YouTube by LifeVantage distributor Christi Baus from Daily Life Source on October 3, 2011, accompanied by the following caption:

“A young boy with a failing heart, gets a second chance thanks to Protandim.”

[Editor's Note: The video has been taken private by Christi Baus. However, it serves the public interest to have this illegal act available for consumers to witness.]

The video, shot on the first day (April 14, 2011) of the LifeVantage Convention held at Salt Lake City’s Convention Center, opens with company president and former CEO David Brown passing a microphone to a distributor from South Dakota named Randy Antonsen, who proceeded to tell a 6-minute story about the ongoing medical treatment of his 7-year old son’s heart condition and alleges that it was Protandim that somehow miraculously cured him. The damning (i.e. illegal) portion of Antonsen’s “testimony” came at the 4 minute mark, as follows (the disjointed syntax is not a transcription error):

Antonsen: “We started him (Paul) on Protandim, and I’ll let my wife explain how I got to that, but we started him on Protandim in December of this (sic) year. Without the cardiologist knowing about it, because we researched about it and they did not know the knowledge of it, so we researched it quickly and basically uh, found out the information, started him on Protandim, went in January of this year and they gave us records of July of last year – his function was 31% — his function, and from what we can gather from our best of knowledge – he was supposed to have an appointment, hadn’t made it – best of our knowledge is that his function – we’re going to have an appointment soon, so we’re hoping it continues that way –his function went to 45 [CROWD CHEERS AND APPLAUSE] And the left side of his heart in July of last year was 51 centimeters and at his last appointment it dropped down to 41…When we were there in Iowa City, we decided — I asked the doctor; I asked the transplant doctor — I told him, I says, I says ‘can you explain him to me’. He looked me in the eye and he says ‘we have no medical explanation for him’. He, by the doctor’s explanation, he should not have been running around; he should not have been active. Matter of fact you put him in a room with perfectly healthy kids and you can’t tell the difference between him and anyone else.

More background details on Antonsen and the LifeVantage conference can be found here and here

At the very least, what we’re witnessing here is the President of the company, David Brown, giving his tacit blessing to the use of disease-cure testimonials in the training of LifeVantage distributors and the marketing of Protandim. Not only did Brown do nothing to stop this illegality from taking place (i.e. Brown aided and abetted this illegal activity), it is a fairly safe assumption that Antonsen’s illegal testimonial was pre-arranged and orchestrated by LifeVantage senior staff with prior knowledge that distributor would be violating US law.

LifeVantage can never again argue that they are not directly complicit in the use of illegal medical claims in the marketing of Protandim.

Now let’s consider some of the broader implications. LFVN is a publicly-traded company, and in their annual filings to the SEC, they have identified various risk factors that can impact the company’s business and the shareholders investment. The risk factors discussed pertain directly to the claims that Antonsen made with Brown’s oversight and blessing. The following risk factors are included in LifeVantage's 10K filing:

“Adverse publicity could also increase our product liability exposure, result in increased regulatory scrutiny and lead to the initiation of private lawsuits.”

We are subject to the risk of investigatory and enforcement action by the FTC: We will always be subject to the risk of investigatory and enforcement action by the FTC based on our advertising claims and marketing practices. The FTC routinely reviews product advertising, including websites, to identify significant questionable advertising claims and practices. The FTC has brought many actions against dietary supplement companies based upon allegations that applicable advertising claims or practices were deceptive or not substantiated. If the FTC initiates an investigation, the FTC can initiate pre-complaint discovery that may be nonpublic in nature. Any investigation may be very expensive to defend and may result in an adverse ruling or in a consent decree."

The FDA may determine that a particular dietary supplement or ingredient is adulterated or misbranded or both, and may determine that a particular claim or statement of nutritional value that we make to support the marketing of a dietary supplement is an impermissible drug claim, is not substantiated, or is an unauthorized version of a “health claim.” Any of these actions could prevent us from marketing that particular dietary supplement product, or making certain claims for that product. The FDA could also require us to remove a particular product from the market. Any future recall or removal would result in additional costs to us, including lost revenues from any product that we are required to remove from the market, which could be material. Any product recalls or removals could also lead to liability, substantial costs, and reduced growth prospects.

LifeVantage’s form 10-K filed with the SEC acknowledges directly that the use of medical claims could result in censure by the FTC and/or FDA leading to investigations and regulatory actions that substantially harm the value of the company’s stock.

Based on what we saw from the David Brown video, he is failing, as the company President, in his responsibilities to the company’s shareholders by placing the company at risk for regulatory action by the FDA and FTC.

Editor's Addition

I'd like to add that the not only is this video proof of criminal activity, but it also shows that LifeVantage Policies and Procedures are simply window-dressing for the FTC and FTC. Here's a reminder of one section of it:

"8.11.2 – Product Claims
No claims, which include personal testimonials, as to therapeutic, curative or beneficial properties of any products offered by LifeVantage may be made except those contained in official LifeVantage materials. In particular, no Independent Distributor may make any claim that LifeVantage products are useful in the cure, treatment, diagnosis, mitigation or prevention of any diseases or signs or symptoms of disease. Not only are such claims violations of LifeVantage policies, but they potentially violate federal and state laws and regulations, including the Federal Food, Drug, and Cosmetic Act and Federal Trade Commission Act."

As you can see LifeVantage only includes this clause so that they can protect themselves in the case that a LifeVantage distributors makes an illegal medical claim. They have the signed document that effectively says, "It isn't our fault that our distributors break the law. We have it in writing that we told them not to." However, at every opportunity they get, they are pushing information at distributors that leads them to believe that they can make these claims.

In addition, this article mentioned that they flew the boy to the event and surprised him on the stage. Imagine putting a boy on stage in front of hundreds of people and then surprising him. That sounds like a checklist of things NOT TO DO to a person with a heart condition. Then again, if you are LifeVantage, why do you care about the welfare of the boy, when you can use him to convince distributors that the product helps with medical conditions that it simply hasn't been shown to do.

LFVN has nowhere to hide now. No more plausible deniability or trying to blame this on low-ranking distributors. The cat is out of the bag. Illegal marketing is at the core of the marketing strategy for Protandim. This is unlikely to end well for LifeVantage.

Originally posted 2011-11-21 22:34:03.

This post involves:

Illegal LifeVantage Actions

... and focuses on:

CEO, Christi Baus, compliance, dave brown, David Brown