Reid Collins & Tsai has filed a class action lawsuit alleging an over $100 million fraud against Advocare International, LP and its high-level promotors. Advocare is a company that sells shakes, nutritional supplements, and powdered energy drinks. The lawsuit alleges that Advocare operates an illegal pyramid scheme by focusing not on selling products to retail customers, but on endlessly recruiting participants who purchase Advocare products at wholesale prices on an ongoing basis in exchange for the right to receive compensation for recruiting other participants to do the same. According to the lawsuit, Advocare entices people to participate in the scheme with the prospect of large financial rewards when, in fact, hardly any participants make money, the vast majority lose money, and the vast majority of money paid to participants comes from other participants, not retail customers. The claims made in the complaint, brought on behalf of individuals who lost money participating in the scheme, allege that Advocare’s operation as a pyramid scheme violates both state and federal law, including the Racketeer Influenced & Corrupt Organizations (RICO) Act.
The lawsuit (Case No. 3:17-cv-00691-B) was filed in the United States District Court for the Northern District of Texas by RCT partners Adam Swick and Ben King.
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