FTC V Vemma Order.pdf

The Federal Trade Commission (FTC) filed a complaint against Vemma Nutrition Company, Vemma International Holdings, Inc., Benson K. Boreyko, and Tom Alkazin, alleging they operated an illegal pyramid scheme, made false income representations, and engaged in deceptive acts. The court found the FTC likely to succeed on the merits, citing evidence of:

Operating an illegal pyramid scheme
Falsely representing substantial income potential for affiliates
Failing to disclose that most affiliates would not earn substantial income
Providing promotional materials with false and misleading representations

The court granted an ex parte temporary restraining order, asset freeze, and preliminary injunction, citing the likelihood of immediate and irreparable injury to consumers and the FTC's ability to obtain effective final relief. The order was issued without prior notice to defendants due to concerns they might dissipate assets or destroy documents. Key factors included:

Defendants' history of deceptive business practices
Connections to foreign bank accounts and associated companies
Commingling of funds and potential for asset dissipation
Likelihood of success on the merits and balance of equities in favor of the FTC

The court's order aims to protect consumers, maintain the status quo, and preserve the court's ability to award full and effective final relief.