A trio of supplement vendors landed millions in coronavirus relief loans last spring – all weeks after being criticized by the federal government for questionable claims about their products, The Post has learned.
Vitamin traders joined the rush for help from the paycheck protection program in early 2020, even as their sales reps leaned in to cash in on the pandemic, government records show. Representatives have claimed on social media that their shakes, teas and powders could help protect consumers from the deadly virus, according to the Federal Trade Commission.
“Instead of stocking up on toilet paper, you need to do something to help fight the virus! a representative for Pruvit Ventures reportedly wrote in an article along with an image of the Texas-based company’s products. “Boost your immune system with our Immunity Boost pack!” “
Immunity-boosting claims have particularly caught the attention of the federal government: While the arguments may seem reasonable to health-conscious consumers, the FTC says such claims are illegal because there is no evidence science to back them up.
“Not all coronavirus prevention or treatment claims made regarding these products are supported by competent and reliable scientific evidence,” the agency wrote in warning letters at Pruvit, Total Life Changes and Zurvita on April 24. “You must immediately stop making such claims. “
Nonetheless, nine days before the FTC issued its warning letters, Pruvit and Total Life Changes had been approved for PPP loans totaling nearly $ 1.7 million on April 15, according to data from the Small Business Administration, which oversees the $ 809 billion program.
Meanwhile, the third firm, Zurvita, secured its own roughly $ 1.4 million loan on May 1 – about a week after the FTC letter raised red flags regarding two of its representatives. who were selling Zeal, its herbal and vitamin supplement.
“Do you want to join me in drinking Zeal to fight the Corona virus?” Contact me . . . to learn how to be your own Corona virus superhero! ”a post from a representative for Zurvita read, according to the FTC.
Another relief loan worth $ 565,402 went on top of seller IDLife, which also received an FTC warning in April. The agency said company officials claimed people could earn “substantial income” from selling its products during the economic crisis fueled by the pandemic.
None of the four companies responded to requests for comment.
The loans come as critics complain that the PPP program, intended to keep workers on payrolls during the pandemic, has ended up helping companies to plaid and deep pockets.
The SBA opened applications on January 11 for another $ 284 billion in PPPs authorized last month. Authorities have imposed tougher rules for the final cycle – publicly traded companies can’t participate, for example – and Congress has given additional funding to the SBA to conduct audits and eliminate fraud.
But that doesn’t change the fact that sketchy businesses have a lifeline that many small businesses have missed, according to Kyle Herrig, chairman of Accountable.US, a left-wing good government group that tracks spending on coronavirus relief. .
“Shady MLMs were showered with P3 cash because the Trump administration let banks approve taxpayer-guaranteed loans to virtually anyone, even if they didn’t need them,” Herrig said at The Post.
Nutrition companies are an important part of the marketing industry on many levels. Known as MLM, these businesses can distinguish between being viewed as legitimate businesses and illegal pyramid schemes. In the latter case, companies reward reps for hiring new hires and often push them into buying the products they’re supposed to sell, according to the FTC.
There is no evidence that any of the four companies mentioned above are pyramid schemes. But two other MLMs got PPP money despite being publicly accused by the federal government of carrying out pyramid scams, according to records.
Neora, a Dallas-based seller of skin care, weight loss and “wellness” products, won a $ 2.5 million loan on April 8 – about five months after the FTC filed a complaint alleging that he pushed distributors to focus on recruiting new representatives rather than selling to customers.
The company has also made unsubstantiated claims that one of its supplements could prevent brain diseases such as Alzheimer’s and Parkinson’s disease, according to federal authorities.
Neora – who “firmly” denies the FTC claims – has used PPP money to retain staff and cover other business expenses amid the pandemic, said co-CEO Deborah Heisz.
“As with almost every other business in the United States, when the pandemic started there was a lot of uncertainty about what the future would look like and we were worried about our roughly 90 full-time employees,” he said. Heisz told The Post. “When the Paycheck Protection Program released its guidelines, we took a close look at them and determined that Neora qualified for the loan.”
Vemma Nutrition Company – which has secured $ 227,500 in PPP funds – has agreed to end its pyramid scheme practices as part of a Regulations 2016 with the FTC. A federal court order in the case slapped the company with a staggering $ 238 million fine that was supposed to be “partially suspended” as long as Vemma paid around $ 470,000 and gave up some of its assets, the agency said at the time.
Vemma did not respond to a request for comment.