Elomir CEO Van Nguyen recently attempted to address compliance issues on a July 11th “Team Relentless” webinar.
Unfortunately Nguyen missed the mark. She also doubled down on her husband’s crypto securities fraud.
Speaking on behalf of Elomir corporate, including company owner Terry LaCore, Nguyen revealed Elomir is currently operating as a pyramid scheme.
During the pre-enrollment phase of July, only distributors were allowed to enter in at $250.
And one box will be shipped sometime in the month of July. And of course the rest of the (ordered) product will be fully fulfilled, starting August 15th.
Nguyen blames product shipping delays on broken machinery. That’s fine, things happen and so are shipping delays as a result.
With respect to regulatory compliance, why not just delay the launch altogether? If you’re an MLM company only letting distributors sign up for $250 a pop – and you’re paying commissions on those fees – you’re running a pyramid scheme.
We have 6500 Brand Partners registered in the tree. Over 5000 successful transactions went through.
The ethical thing to do here upon realizing you’re not going to be able to fulfill orders, is stop taking money from people.
When you’ve fixed up whatever machinery needs fixing, then reopen – both to distributors and retail customers.
Nguyen goes on to reduce regulatory compliance as “rumors”, specifically how the FTC regulates the MLM industry.
I know that over the weekend it was kind of mentally exhausting for some of you guys, hearing about the FTC, the FDA. That I’m operating illegally because I’m not allowing customers to come in, and NAC is an illegal drug.
Guys, trust me when I say, we have a legal team that is backed by a billion dollar brand.
The FTC would only shut me down if I was illegally operating a business, that wasn’t fully disclosed about what was happening.
When we went public on July 5th, there was a discussion had, with the current leadership that was enrolled in the tree before it went live, and everyone understood that if we were going to go into this pre-enrolment phase, that means it was actually only open and limited to the three-box order for Brand Partners.
Thereafter, once we caught up on inventory, we would allow customers into the system. Because us as the owners, did not feel confident in taking money from your consumers and your customers.
And guys, that was fully disclosed and publicly announced in the ATM page called “Live Your Best Life”.
So will the FTC supposedly try to come after me and the company?
Guys, the only reason why the FTC pursues companies… for multiple reasons; one, are you doing medical claims in the field?
The second thing that the FTC looks for is are we screwing over Brand Partners and customers. And what I mean by that is are we not refunding them, or addressing the concerns that they have about the product or our opportunity.
That’s the only way the FTC will really pay attention, if our own customers or own distributors are reporting theft or fraud.
Are disclosure violations and “screwing” over distributors and customers on refunds potential FTC violations? Absolutely.
But it’s patently false to claim these are the only two reasons the FTC “pursues” MLM companies.
By and large, pyramid fraud is the primary reason we see regulatory enforcement initiated by the FTC against MLM companies.
That is to say, when an MLM company’s distributor order revenue outstrips retail order revenue. There are additional caveats to that, which can alter the magnitude of alleged fraud (advertising, “screwing over” distributors and customers etc.), but at its core not having significant retail sales volume is a problem.
The FTC has been pretty clear about this in the past.
With respect to Elomir, 100% of sales revenue generated is attributable to affiliates. This means in turn that 100% of any commissions paid out are defacto tied to recruitment.
With not a single retail customer, Elomir is currently operating as a pyramid scheme in violation of the FTC Act.
Is the FTC going to come in guns blazing and shut down Elomir?
Probably not just yet. Like I said, machinery breaking down is a reasonable cause for delay and, while not the most responsible decision, soliciting Brand Partners isn’t necessarily an issue – yet.
Elomir have essentially backed themselves into a corner. If this drags on (for whatever reason), and retail still isn’t a thing months from now – that mess could trigger an FTC investigation.
One thing that might also interest the FTC is the motivation behind Elomir Brand Partnership.
In a legitimate MLM company, distributors sign up to run a business selling products to retail customers.
Here with Elomir there are no retail customers. Thousands of Brand Partners signing up for $250 without being able to actually sell anything to retail customers. All they can do is recruit.
“But I signed up for the product!” is also a very difficult argument to make, when product shipping is backed up for a month and you can’t sign up for the product without buying into Elomir’s business opportunity.
In their Vemma and Herbalife litigation, the FTC made it explicitly clear that distributors aren’t retail customers. This was challenged in court in both instances and the FTC prevailed.
The choice to not suspend business operations till product fulfillment issues are sorted out casts doubt on the motivation of Elomir distributors signing up.
Given Elomir is in “pre-enrollment” (what does that even mean with 6500+ Brand Partners enrolled), it’s a shaky foundation to build an MLM company on.
Somewhat disturbingly, Nguyen goes on to discredit and dismiss consumer complaints to the FTC.
There’s so many anti-MLM’er out there reporting every company. Calling them a pyramid scheme and doing all these things.
You think the FTC has the time to look at those complaints?
In researching Elomir, BehindMLM didn’t cite any pyramid scheme concerns. We also weren’t aware Elomir had signed up 6500+ distributors without a single retail customer either.
Elomir needs to either refund Brand Partners and suspend enrolment, or get this issue sorted and start taking retail customer orders immediately.
Moving on to the N-acetylcysteine (NAC) being a product in Axis Klarity, something we did comment on, Nguyen mischaracterizes current FDA regulatory guidance.
Our legal team is fully aware that the FDA is looking at NAC and possibly moving it to prescribed drug status.
No they’re not. NAC is currently an approved drug that requires a prescription. Putting it in dietary supplements is currently illegal.
As of April 2022 the FDA is looking at allowing NAC in dietary supplements – but as of yet no decision has been made.
Like running an MLM company with no retail customers, I consider selling a product with an illegal ingredient a bad business decision.
Instead of acknowledging that, after mischaracterizing NAC’s current legal status in dietary supplements, Nguyen trots out a “big pharma” conspiracy theory.
I don’t know why they’re doing what they’re doing, but big pharma is trying to take NAC off the market for supplements.
I’m working closely with our legal team. They did update me in January and said, “Van, as of right now not a full decision has been made. You don’t have to be concerned about it but if something does happen in a ruling, then we will have to address the ingredient.”
I don’t know what LaCore Enterprises’ lawyers are looking at but here’s the current NAC status and proposal from the FDA (April 2022);
If an article has been approved as a new drug under section 505 of the FD&C Act (21 U.S.C. 355), products containing that article are outside the definition of a dietary supplement unless either of two exceptions applies.
First, there is an exception if the article was marketed as a dietary supplement or as a food before such approval.
Second, there is an exception if FDA (under authority delegated by the Secretary of Health and Human Services) issues a regulation, after notice and comment, finding that the article would be lawful under the FD&C Act.
FDA has determined that NAC is excluded from the dietary supplement definition under section 201(ff)(3)(B)(i) of the FD&C Act because NAC was approved as a new drug before it was marketed as a dietary supplement or as a food.
Specifically, NAC (i.e., acetylcysteine) was approved as a new drug under section 505 of the FD&C Act on September 14, 1963 (see 28 FR
13509 (Dec. 13, 1963) (announcing the approval)).FDA is not aware of any evidence that NAC was marketed as a dietary supplement or as a food prior to September 14, 1963. As discussed
below in Section III, FDA recently confirmed NAC’s exclusion from the dietary supplement definition in response to two citizen petitions.However, we are considering initiating rulemaking under section 201(ff)(3)(B) of the FD&C Act to permit the use of NAC in or as a dietary supplement (i.e., to provide by regulation that NAC is not excluded from the definition of dietary supplement), and, if, among other considerations, FDA does not identify safety-related concerns as we continue our review of the available data and information, we are likely to propose a rule providing that NAC is not excluded from the definition of dietary supplement.
But why let facts get in the way of “big pharma” conspiracy theories.
So we’re going to leave (NAC) in there, as long as possible, and I pray and hope that it doesn’t become a prescribed drug.
It already is, and has been for fifty-nine years.
If the FDA changes the classification of NAC, great. Axis Klarity is in the clear. But that hasn’t happened.
Instead Elomir appears to have rolled the dice and preempted the FDA’s course of action, choosing to offer an illegal ingredient in its flagship product and roll the dice on regulatory consequences.
We are fully monitoring it from a legal standpoint. So just know, I’m not neglecting or just throwing stuff together and praying to God it’s going to work and hoping they don’t catch us. That’s not our mentality.
As explained above, it kinda is. It’s exactly Elomir’s mentality.
Like having no retail customers, selling products with illegal ingredients is not a great foundation to build an MLM company on top of.
At this point BehindMLM gets a mention, with Nguyen begging Elomir distributors not to visit our site
If you run into someone that says, “Do you know about the BehindMLM article, please don’t go Google search and click on it, cuz then it just rises up guys.
An MLM company not wanting your distributors to inform themselves isn’t a good look.
By all means if something published on BehindMLM isn’t factually accurate, let me know and I’ll address it. But that hasn’t happened.
Instead we have the CEO of Elomir ignoring the primary reason the FTC goes after MLM companies, and mischaracterizing the current legal status of NAC as an approved drug.
Next we get into Nguyen’s husband, Toan, peddling crypto Ponzi schemes while role-plays being the co-CEO of Elomir.
I was expecting a BehindMLM article about me. I knew they were going to say my husband does Ponzi schemes, because we do invest in crypto.
Obviously investing in Ponzi schemes and, more importantly, promoting them, is an indefensible position. And so we have Nguyen reduce her husband’s Ponzi scamming to “investing in crypto”.
With respect to BehindMLM, I don’t have a problem with “investing in crypto”. I couldn’t care less if Van and Toan Nguyen are crypto investors running Elomir.
What I have a problem with, and what is crucial for anyone doing their due-diligence into Elomir to recognize, is that Toan Nguyen is promoting crypto Ponzi schemes. And has been for some time.
If you invest in a Ponzi scheme and profit, you are a scammer.
If you promote Ponzi schemes, you are an even bigger scammer.
Toan Nguyen does both of these things, and I’ve provided documented evidence to back up these claims.
Reducing Toan Nguyen promoting Ponzi schemes and scamming people through them to “investing in crypto”, is the height of disingenuousness.
Guys, we fully disclosed everything to everyone and you can ask the O.G. team.
When they came over to our house, I told them at my dining table, “Hey guys, when BehindMLM comes out be mindful they’re probably going to say Toan does Ponzi schemes.” Right? Because he does do crypto.
No. Toan Nguyen “does Ponzi schemes” because “Toan does Ponzi schemes.” Whether wire and securities fraud is committed via crypto or any other vehicle is irrelevant.
Van continues to defend her husband’s Ponzi scamming by piling on even more disingenuousness;
When it does come about, please be honest to people and let them know that yes, my husband does do crypto.
Crypto is very controversial in the United States but he doesn’t knowingly take money and scam people. He has a YouTube channel that reviews crypto projects, NFTs, all those things and so I want you guys to be completely transparent to the people you talk to.
That would entail disclosing Toan Nguyen recruits people into the crypto Ponzi schemes he “reviews”.
I want to take a step back for a moment and explain why, from a due-diligence perspective, Toan’s crypto Ponzi scamming was such a big deal in BehindMLM’s Elomir review.
Passive investment opportunities are securities offerings. If that sentence makes no sense to you, go and read up on the Howey Test and how it’s used to establish the existence of an investment contract.
Securities in the US are regulated by the SEC. Both companies offering securities and promoters of securities need to be registered with the SEC.
Offering and promoting unregistered securities is illegal in the US (and anywhere in the world with financial regulation).
Toan Nguyen’s latest scam is Yield Nodes:
Yield Nodes is a crypto Ponzi pitching a passive 213% annual ROI.
Toan Nguyen actively promotes Yield Nodes on YouTube and social media, actively recruiting investors into a Ponzi scheme.
Neither Yield Nodes or Toan Nguyen are registered with the SEC. You can verify this yourself with a search of the SEC’s Edgar database.
Again, offering and promoting unregistered securities is illegal in the US.
This isn’t about “investing in crypto”, Toan Nguyen is committing securities fraud.
I know I’m not lying. I know my husband’s not lying. And for us, why would we disclose this publicly if we know we’re doing something illegally.
As demonstrated by her own words, neither Tan or her husband Toan have actually disclosed Toan’s investment and promotion of crypto Ponzi schemes.
To BehindMLM’s Elomir review, I pointed out that having an executive openly committing securities fraud by promoting Ponzi schemes isn’t a good look.
I wholeheartedly stand by that.
To be clear: I’m not suggesting or insinuating Terry LaCore or LaCore Enterprises has anything to do with Toan Nguyen scamming people through Ponzi schemes. It’s worth noting though that Terry LaCore himself has a history of securities fraud.
With that in mind I’m particularly surprised this is a topic I’ve had to address again. Maybe LaCore, Van and Toan need to sit down and talk this one out.
This isn’t “investing in crypto”. This is full-blown financial fraud via serial investment and promotion of Ponzi schemes.
Or perhaps LaCore doesn’t give a crap one of his executives is scamming people through Ponzi schemes. I’m not here to make that judgment call, I’m just pointing out facts as part of due-diligence into Elomir.
Poor business decisions and misrepresentation of regulatory compliance seems to be a recurring theme here.
My thanks to Mombie #Anti-MLM for drawing my attention to Van Nguyen’s misinformation webinar.