By Ray Stern
By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
Deihl is a master at this trick. For example, the Vitamist site says:
"Vitamist Colloidal Spray Minerals provides more than 70 minerals in each dose. . . . On a daily basis, our bodies require more than 100 milligrams of major minerals and less than 100 milligrams of minor minerals. Provided in a natural balance to maintain physiological levels, colloidal minerals help prevent deficiency diseases and provide protection against degenerative diseases."
It is implied that spraying these minerals on your tongue will stop degenerative diseases. But that's never stated directly in the claims.
Also offered are Herbal Osteo-CalMag, Vitamist Ex. O, Ginkgo Mist, Grapeseed Mist, Lady Mist, Pre Natal Mist, Kid's Multiple, the Revitalizer, Slender-Mist, Smokeless, and VitaSight, which includes bilberry, which "may offer protection against the development of cataracts."
Or, it may not.
"Mr. Deihl is not an idiot, that's for sure," Quill says. "He's good at what he does."
His only big gaffe, then, was the potassium iodide spray designed to save Americans from nuclear holocaust. Apparently, Deihl was too excited by the business opportunities of September 11 to consider the fallout.
The problem: Deihl's "Ki-Spray," as it was described, fell under the FDA description of a new drug, not a nutritional supplement.
"We are unaware of any evidence that establishes that this drug is generally recognized as safe and effective for the intended use," Cruse wrote Deihl in his four-page order. "The continued distribution of these products without an approved NDA is a prohibited act."
So Deihl just stopped selling the stuff. No big deal.
In the saturated vitamin market, you need more than just a neat spray bottle to get rich.
You need a business plan to get the stuff to customers.
Or, in the case of multilevel/network marketing, all you need to do is get the product sold to newly recruited sales people who believe they can get rich recruiting their own sales staff, from whom they would collect a commission for each product sold.
Joe Deihl described his business plan himself in a deposition he gave in one of the myriad lawsuits against him.
"Would you define 'network marketing' for me?" the attorney asked.
"The ability of one person to seek another and to combine together to make a greater whole," Deihl said.
"So, if one person sells to 10 or 12 others who each sell to 10 or 12 others, would that be an example of network marketing?"
"Create a greater whole, wouldn't it?" Deihl asked rhetorically.
That's how Deihl has built a pyramid of sales people with himself on top. He claimed in that same deposition in 2000 that his company, Karemor, which is charged with selling Vitamist and other products, had 100,000 sales associates.
On Karemor's international Web site, people are recruited to take part in a "Home-Based Opportunity." Beginning "consultants" receive a 5 percent commission from what they sell.
The real money, though, comes by climbing the "stair-step" by recruiting more sales staff beneath you. If you become a "Silver Consultant," you get 5 percent from purchases by the consultants you brought into the company. "Gold Consultants" get 10 percent bonuses on each purchase by lower sales people. "Executive Consultants" get 15 percent.
Beyond executive consultant, you can become an opal executive, then a ruby executive, then sapphire, then emerald, then diamond, at which point you're eligible for something very special called the "Crown Infinity Bonus."
In such operations, it's not about selling a few vitamins to consumers, it's about selling tons of vitamins to "sales consultants" with dreams of receiving "long-term monthly residual income."
Karemor is essentially the Amway of spray vitamins.
This is all legal. And apparently, new suckers are still being born every day.
What is not legal, according to the Arizona Consumer Fraud Act, is how, up until March 2002, Joe Deihl went about getting the money from his "consultants."
In 2000 and 2001, the Arizona Attorney General's Office began receiving complaints from several of Deihl's sales associates.
After a lengthy investigation, Deihl and his company, Karemor, avoided criminal prosecution by agreeing in March of 2002 to an "Assurance of Discontinuance pursuant to the Arizona Consumer Fraud Act."
Deihl's scam was described in the attorney general's order:
"In order to receive the benefits of (Karemor's) commission structure, the Sales Associate was required to enroll in Respondents' AutoShip Plan, which authorized Respondents to ship products to the Sales Associates on a monthly basis and automatically deduct monies from their bank or credit card accounts to pay for the products." Karemor "failed to adequately advise consumers that by enrolling in the AutoShip Plan, they were committing themselves to accept Respondents' products for a minimum of six months and were giving the Respondents the authority to issue an account draft each month to pay for the products."
Karemor "continued the drafts despite being notified by Sales Associates that they did not want the products. Additionally, (Karemor) refused to accept returned products from Sales Associates who were no longer interested in continuing with the AutoShip Program. Respondents' marketing materials contained false promises and misrepresentations, including the omission of material facts, which is a violation of the Arizona Consumer Fraud Act."
According to the Better Business Bureau in Arizona, Deihl was playing similar games with Don Lapre's old company.