In China, MLM and pyramid schemes businesses are illegal and are prevented from proliferation. But in March 2013, USANA reports that 37% of its global revenue were transacted in China. Making China a major role player in USANA’s funding. If China government does not allow MLM, what’s the reason why USANA’s Chinese investors are getting the services of Harwood Feffer LLP, a NY based law firm specializing in consumer fraud and product liability to investigate USANA Health Sciences, Inc.
Will this be the start of the revelation that MLM do exists in China even if its illegal to practice such business ventures in this country. How did it happen? How did USANA proliferate in a country where MLM is illegal? How much money was involved?
There is a common gateway between China, MLM and USANA, and that is the harbour place called Hong Kong. We all know that Hong Kong is now part of China. And transactions between mainland China and other countries like the US can transpire as if the transaction happened with Chinese in the mainland. Hong Kong served as the gateway to all of it. Mainland China and Hong Kong have opposing policies when it comes to direct selling and MLM. The former has very straight prohibition about MLM whereas the latter allows the practice.
Citron Research, a watchdog for online investing exposed on several occasions alleged illegalities on USANA transactions. Citron on its own investigation cited that Chinese ‘associates from the mainland were made to transact business via Hong Kong were MLM can be practised. And their exposes are being picked up by law firms who have filed cases against USANA. In YouTube, exposes about USANA and other MLM firms were reviewed by a scam artist, Ethan Vanderbuilt who have discussed in his YouTube channel how these MLMs operates on scam. Comments on his video runs from either being skeptic or total disagreement of his claims. Although none of the comments were made by a Chinese national involved in USANA transaction.
As the other cases made its way to court, another class suit was announced by Rosen Law Firm of New York last July 21 investigating its potential claim against USANA in China and calling on all USANA investors prior to July 15, 2014 to get listed for the filing.
Other MLM companies investigated in China have either been fined or have their operations suspended by the Chinese authorities. With USANA Health Sciences being the new one in the news being investigated. And while many welcome the idea of the investigation. Worst hit on this scenario are the USANA ‘associates’ who now wait on limbo as to the future of their investments with this MLM Company. A future that still holds great uncertainty for its resolution.