The Federal Trade Commission is suspending an energy drink company’s operations after uncovering that they were deceiving college students with the false promise of large sums of money, urging them to recruit as many new members as possible.
Vemma was involved in an alleged pyramid scheme that lured college students with the claim that they could make a substantial income without working a traditional job. The company promised students luxury cars, jets, yachts, and an income of $50,000 a week.
The FTC’s complaint stated that Vemma focused on getting young people to recruit others rather than the retail sales of the energy drinks. Most of the affiliates selling the drinks did not make a profit — and some even lost money.
Consumers were encouraged to invest $500 to $600 for an “Affiliate Pack” of products and business tools and $150 in Vemma products to be eligible for bonuses. The company also reported false earning claims and did not disclose that they told affiliates they would make a substantial income.
Vemma’s website notes that the U.S. District Court appointed a temporary receiver to suspend their activities and operations until the scheduled preliminary injunction hearing is over.