Health drink firm headed by controversial multi- level marketer
Robert T. Edwards’ schemes have been challenged by regulators in Canada, the United States, England and Australia
In late August, Olympic gold- medal skier Ashleigh McIvor filed a lawsuit against YJ Sciences Inc., alleging the company had breached a sponsorship arrangement with her.
The lawsuit made headlines in both The Vancouver Sun and The Province, but I am not so much interested in the dispute as I am the person behind the company. But first, let me tell you a bit about YJ and its business.
YJ Sciences is a B. C.- registered company with headquarters at 425 Carrall St. in Vancouver. It is selling a health drink called YouthJuice through a classic multi- level- marketing program.
MLM schemes are quite legal, as long as the emphasis is on selling the product. If, however, the focus is on recruiting others, and the bulk of income comes from people who pay to join the program, then it is an illegal pyramid scheme.
I don’t know how YJ’s compensation program is structured, so I cannot say on what side of the line it falls. What I can say is that Robert T. Edwards, who is listed as the company’s president and sole director, has a history of running MLM programs that regulators and/ or police have alleged to be pyramid schemes.
Edwards, now 71 years old, was born in Winnipeg and graduated from the University of Manitoba in 1963. In the early 1970s, he operated Savex Cashcard Winnipeg Ltd., which sold a “cashcheck” card entitling holders to discounts on goods and services. In 1974, Manitoba authorities charged him with operating an illegal pyramid scheme, but later dropped the charges.
In 1975, Edwards and two associates moved to England and ran a similar program called Cashcheck England Ltd. The scheme took in more than $ 500,000 before English police charged him with conspiracy to defraud. By that time, however, he had left England.
By the early 1980s, Edwards was living in Vancouver and once again active in multi- level marketing, this time with a company called Personal Best, which sold weight- loss products and dietary supplements.
Personal Best had a U. S. office in Bellingham, Wash., and also operated in Canada and Australia. The business ultimately failed in North America, but the Australian chapter was reincarnated as Trump Card Australia Ltd.
Trump Card was another discountcard scheme. It enjoyed initial success, growing to 20,000 members by the spring of 1986. Then consumers began to complain and Australian authorities intervened.
By May 1986, Trump Card was bankrupt, leaving distributors with $ 1.4 million worth of prepaid memberships they had been unable to sell. Two months later, however, Edwards was in business again, this time with his biggest- ever MLM scheme.
Based in Irvine, Calif., FundAmerica Inc. — which was co- financed by a group of Vancouver investors — sold memberships to a club that provided discounts on goods and services. It was a vibrant business, attracting 95,000 members by July 1990.
That’s when Florida and California authorities alleged the company’s main endeavour was not selling memberships, but rather the right to sell memberships.
“In a routine presentation, the FundAmerica people would spend 10 minutes discussing the product and the rest of the time explaining how to get rich selling distributorships,” said Florida prosecutor Peter Antonacci.
Edwards was arrested and charged with three counts of organized fraud, organized securities fraud and operating a pyramid scheme. He was released on $ 1- million bail.
It was a sobering development for Edwards, who was enjoying an affluent lifestyle with waterfront property on Newport Beach and on Pt. Grey Road in Vancouver.
In January 1993, he settled the Florida charges by causing FundAmerica to plead “no contest” to a felony violation of Florida’s business opportunities statute, and by paying a $ 200,000 fine.
“The company was adjudicated guilty,’” said David Audlin, chief assistant prosecutor in Florida told me at the time. “That is a determination by the court that a violation of the law has occurred. It constitutes a criminal conviction in Florida.”
Edwards entered into a “deferred prosecution agreement” whereby he agreed not to do business in Florida during the next 12 months or commit further violations of the law. He complied and, as a result, the case against him was dismissed.
Edwards claims the charges were “politically motivated’” and had no substance. “Florida treated us like some crooks coming into their state and raping and plundering and pillaging. Nothing could be further from the truth.”
The experience did not, however, dull his appetite for MLM schemes. By 1994, he was running National Alliance for Today’s Opportunities Corp. from an office on Burrard Street, and recruiting distributors to sell a line of oil and gas additives and lubricants.
Edwards insisted it was a legitimate business and, indeed, there is no indication he broke any laws.
There is also no indication that he is breaking any laws with YJ Sciences, which he co- founded with his “life companion” and business associate Lynda Perry. The company even has a charity component — it says it will donate half of its annual profits from the sale of YouthJuice to children’s charities — which gives it an altruistic feel.
On Monday, I sent Edwards a written request through his vice- president of marketing, Sunni Brooke ( Smittenhelms), to discuss his regulatory record. He did not respond, but I think it is clear that almost everywhere he has gone, he has left a vapour trail of controversy.
I do not view a track record like that as a very attractive drawing card. On the contrary, I think it is good reason to stay away.