Brett Bartholomew & Katie Carr

 Background on Herbalife-Related Businesses

• Brett Bartholomew and Katie Carr are affiliated with several online businesses that sought to recruit Herbalife distributors.
  • 2 More Money was an Herbalife business operated by Bartholomew and Carr that provided recruiting scripts, training tools, and other business methods to paying members. The domain is registered to Katie Carr (domain registration attached as Carr Exhibit A).  The domain registration uses the address 71 Sprucewood, Aliso Viejo, CA 92656.  Bartholomew is listed, alongside Carr, as a primary contact for the business on numerous company documents.  See, e.g., Team Order Form; Team $595 Order Form; Wheel Sign Up Procedure, attached as Carr Exhibits B, Exhibit C, and Exhibit D, respectively.[1]  In addition, 2 More Money’s “Recruiting Web site Application” form provided different fax numbers for applicants based on whether they are “in Katie Carr’s group” or “Brett Bartholomew’s Group”.  See Carr Ex. B at 3.  The website is no longer active, but can be viewed at http://web.archive.org/web/20040612125539/http://www.2moremoney.com/mainhome.html.
  • A Get Rich Plan was an Herbalife recruiting website registered to Carr (domain registration attached as Carr Exhibit E).  The domain registration uses the address 71 Sprucewood, Aliso Viejo, CA 92656—the same address listed on the domain registration for 2 More Money.  The website offered business methods to new Herbalife distributors.  The site is no longer active, but can be viewed at http://web.archive.org/web/20050320221524/http://www.agetrichplan.com/.
• Home Employed, registered to Bartholomew (domain registration attached as Carr Exhibit F), was an Herbalife website that provided training and lead generation services to members.  The administrative contact is listed as Bartholomew & Associates, which is a business registered in Nevada (Filing Number:  C12527-1996, registration filing attached as Carr Exhibit G). The registration filing lists Brett Bartholomew as the company’s President and Secretary, and his wife, Amber, as the Treasurer. Amber Bartholomew lists herself as “Owner at Bartholomew & Assoc. Inc.” on her LinkedIn website, attached as Carr Exhibit H and available at http://www.linkedin.com/pub/amber-bartholomew/16/500/89.  The Home Employed website is no longer active, but can be viewed at http://web.archive.org/web/20040619064011/http://homeemployed.com/.
  • Home Employed and 2 More Money appear to have been operated jointly.  For example, Home Employed participants were given an “Important Numbers” document which lists “2moremoney” at the top of the page and Katie Carr as the contact person.  See Carr Exhibit I, also available at http://web.archive.org/web/20050320232707/http://www.homeemployed.com/training/training/documents/ImportantNumber2mm.doc; see also Home Employed training video, infra.
  • TV Media Leads was an Herbalife lead generation website registered to Bartholomew (domain registration attached as Carr Exhibit J). The domain registration uses the address 211 Red Rock Road, Boulder City, NV 89005—the same address listed on the domain registration for Home Employed, and the contact email address listed for Bartholomew is brett@homeemployed.com.  The website is no longer active, but can be viewed at http://web.archive.org/web/20050207181925/http://www.tvmedialeads.com/.

Primary Source Data on Business Practices

Video and Audio

• Bartholomew and Carr appeared in videos and trainings promoting the Herbalife business opportunity.
  • An audio recording on the “training” page of the 2 More Money website, available at https://soundcloud.com/hlfaudio/2more, prepared new distributors for their “first [2 More Money] training call.”  The recording noted the existence of a lead generation “wheel” (infra) and makes repeated references to Herbalife Success Training Seminars (STS).
  • A training video found on the Home Employed website, available at https://vimeo.com/user24651359/review/100219616/1d48d24aae,[2] displayed a 2 More Money banner in the background.  The video promoted “Dare to Dream, Work to Win”—a book by Dr. Tom Barrett about “Understanding the Dollars and sense of Success in Network Marketing.”  See http://www.amazon.com/dp/0964106515/.  The video told potential recruits that “we are really big in Herbalife on personal development. . . .  We want to activate your dreams, activate your goals . . . .  Remember at the beginning of the video when I told you that you had just launched yourself into an incredible new business and, you know, you’re gonna become financially free.”

Lead Generation Materials

• The Home Employed website provided distributors with lead generation services.
  • The site’s purpose was to serve as a “Lead Generator Wheel.”  As the site’s sign-up page explained, “The wheel is a simple concept and will allow you to receive leads from our established online marketing efforts. . . .  We drive traffic to HomeEmployed.com.  Every time a visitor goes to the site, a different slot, representing a different person, will be displayed.  If the visitor keys in their Name and Email, that lead will be connected to that particular slot.”  The site would then provide a given paying Home Employed member with that visitors name and email address, and automatically generate a “follow-up email that will direct [the visitor] to [the member’s] recruiting website.”  See Carr Exhibit K, available at http://web.archive.org/web/20050211014006/http://www.homeemployed.com/signup/index-fix.asp.
  • The site’s Frequently Asked Questions (FAQ) document, attached as Carr Exhibit L and available at http://web.archive.org/web/20090405230514/http://www.homeemployed.com/faq.asp, confirms Home Employed’s lead generation focus, posing questions like “How can I get the marketing courses sent to me so I can forward them to my leads if they request a specific email in the course?”
• The TV Media Leads website also apparently delivered leads to members much in the same way as Home Employed’s Lead Generator Wheel, but from television, rather than online, advertising.  See Carr Exhibit M (“Each ‘slot’ on the marketing run will be $200.  There is no limit to the number of ‘slots’ you may purchase.  Each marketing run will last approximately two weeks.  Your leads will be delivered in real time.  All leads that are delivered to you are from TV Marketing and from NO OTHER SOURCE.”), available at http://web.archive.org/web/20041119152857/http://www.tvmedialeads.com/.
• Businesses operated by Bartholomew and Carr provided scripts for their distributors to use when attempting to recruit new distributors into the scheme.

Recruiting Materials

• 2 More Money provided a script focused on “first contact” with new recruits, attached as Carr Exhibit N, available at http://www.docstoc.com/docs/32187897/Script-3-Digital-Package-Zero-Call).  The script instructed distributors to tell recruits that Herbalife has “more people earning over $100,000 a year than any other company in the world.  You determine your income goals and work toward them‼”  The text of the script continued, noting, “We want to teach people to duplicate exactly what we do. . . .  We are looking for people who are teachable . . . .”  The 2 More Money team then reassures the distributors using the script, telling them that “Only 5 out of 100 [leads] are ever going to do anything g [sic].  You are prospecting for GOLD here.”
• Home Employed provided a “Bringing Them In” script, attached as Carr Exhibit O and available at http://web.archive.org/web/20050320224739/http://www.homeemployed.com/training/training/documents/Script%20Bringing%20Them%20In%2009-04.doc, to assist members in convincing recruits to buy up to $3,000 in Herbalife products and $595 for a personalized 2 More Money website.  The script coached members on how to tell recruits about the different levels of the Herbalife marketing plan at which they can enter the business as well as the different sources of income—retail and recruiting— they stand to earn. The script emphasized that the member’s goal is to convince a recruit to become a “Supervisor Executive”—a position unique to the Home Employed / 2 More Money system whereby a recruit chooses to purchase the requisite inventory to qualify as an Herbalife Supervisor (which the script prices at $3,000) and purchases a 2 More Money website for $595. Id. at 3.  Finally, the script provided “Herbalife facts in a nutshell” for members to share with recruits to promote the business opportunity. These “facts” included a number of statements that deceptively imply that a recruit could earn substantial income, including: (i) “We have a marketing plan that pays 30% higher than any company in this entire industry”; (ii) “We have more people earning over $100,000 a year than any other corporation in American history”; and (iii) “We have developed more millionaires than even Microsoft.”  Id. at 7.
• 2 More Money used advertisements and published informational materials containing deceptive income claims.
  • An advertisement, attached as Carr Exhibit P and available at http://web.archive.org/web/20040624105947/http://www.2moremoney.com/online_packages/money-machine.pdf, asked, rhetorically, “How Much would you like to earn in the next 30 days, 90 days??”  The ad concluded by making unsubstantiated claims about the substantial growth experienced by new distributors in their Herbalife businesses within days and weeks of joining the 2 More Money system.  For example, the ad cited “Carlos and Monica (Chile),” who, in just 3 weeks using the system “did $7000 in business = $3500 Profit.  In 6 weeks they acquired 70 New Customers, all of them had in credible [sic] results on the products and provided them with REFERRALS‼  They had 37 new people join their business.  Unbelievable‼”  Notably, there was no disclaimer included with this advertisement.
  • A 2003 2 More Money “special report,” attached as Carr Exhibit Q and available at http://web.archive.org/web/20040416060134/http://www.2moremoney.com/online_packages/special_report.pdf, described the different trainings available to new distributors who join the “system,” while making extravagant claims about income potential.  The report touted the availability of phone trainings, manuals, STSs, online trainings, and “personal One on One training[s].”  Id. at 17.  The report also presented a purported study by “a former banker, and currently a President’s Team Member” which states the “odds” that a distributor will become a millionaire based on where that distributor falls within the Herbalife marketing plan.  Id. at 16 (according to this supposed study, the odds of becoming a millionaire are 28,000:1 for a distributor, 2,600:1 for a supervisor, 800:1 for a World Team Member, 80:1 for a Global Expansion Team (GET) member, 8:1 for a Millionaire Team member, and 1:1 for a President’s Team member). This data allegedly supported the claim that “Herbalife has created more millionaires in network marketing than any other company!”  The special report made clear that the 2 More Money system’s focus is on recruiting—and not retail sales—when it lists the different ways an Herbalife distributor can make money and the only income method not listed in bold text is “Retail Profits.” See id. at 14.
  • The 2 More Money website also featured an eBook on “How to Get Started in Your Own Home Business,” attached as Carr Exhibit R and available at http://web.archive.org/web/20030308093401/http://www.2moremoney.com/ebook/2moremoney_ebook.pdf.  While the eBook made no explicit reference to Herbalife, the company was undoubtedly the subject of the materials. See id. at 11 (“Our Company is the #1 Health and Nutrition company in the World.”). The eBook presented numerous deceptive claims of substantial income growth while using the 2 More Money system.
• The eBook began with Katie Carr (the “Moderator”) describing the financial freedom she has found, telling new distributors, “Just in the last 90 days I’ve made over $60,000!  And with adding this turn key Internet Marketing System, I EXPECT my income to be well over $500,000 / year in the next 12 to 18 months.  But MOST important . . . it’s so wonderful to work around my family and be home with my 3 children when they need me.  I am raising them [,] not someone else!”  Id. at 4.  Later in the eBook, Carr explained the supposed ease with which a new distributor can get rich under the marketing plan.  “I just applied the basic principles that I will be teaching you, so you too can be earning this $10,000 dollars a month, months from now not years. . . .  I plugged into this proven system . . . my first month working about 15 hours a week an hour or 2 at night, or whatever I could on the weekend.  I made a $1600 profit!  Isn’t that Great?  In three months I was able to quit my job, which was my personal goal.  In the first year I started earning $10,000 a month.  Now today I earn over $20,000 a month. AND I am just getting started!!! My Sponsor Karen is 56 years old Grandmother of 10, Mother of 5 and earns over $40,000 monthly. She didn’t even graduate from High School.  She will work with you too!  Her daughter-in-law Amber started in her late 20’s over 6 * years ago and now earns over $52,000 a month. Unbelievable.”  Id. at 10.
• The eBook then presented additional income testimonials from purported participants in the 2 More Money system.  Most testimonials follow a similar template:  (a) disdain for their former jobs; (b) hesitancy to join the business and/or fear of failure; (c) followed the 2 More Money system; and (d) surprised at how quickly their businesses grew since starting their distributorships.  See id. at 5-8 (“Jason,” “Ruth,” “Stephanie,” and “Mel”).  The testimonials stressed the purported ease of building a successful distributorship.  See, e.g., id. at 7 (Stephanie says, “Don’t wait!  Anyone can do this business.  All you need is to follow directions, be teachable, and have the desire to better your lifestyle.”).  The testimonial by Stephanie also emphasized the opportunity to build a “residual income.”  Stephanie said that “[w]ith all this training and putting it into action immediately [new recruits] will absolutely create a daily cash flow and learn how to build a residual income, which is income you earn each month after month even if you are on vacation you still get paid!  I like that.”
• The “About Us” page of the website for A Get Rich Plan, screenshot attached as Carr Exhibit S, began by deceptively telling recruits, “What you can expect to earn right from the beginning is $500 to $1,500 P/T [part-time] and $2,000 to $6,000 F/T [full-time] per month just getting started, as you begin to build your business.”  Once again, there was no disclaimer included with such income claims.  The A Get Rich Plan page concluded with an offer to “Come cruise with us.  All-Expense Paid Exotic Vacations‼  Recent Exclusive Chartered Caribbean Cruises!  Cancun, Bermuda, Australia, Puerto Rico, Italy, Greece, Hawaii‼!  Your next Dream Vacation in Paradise . . . for FREE‼  That’s right, with [Herbalife] your Dream Vacation will be reality!  Be treated like Royalty!  You deserve it!”
• Carr hosts a slide presentation on http://www.learningisearning.homestead.com/, an Herbalife business and nutrition club training website, that provides a basic overview.  See Carr Exhibit T, available at http://learningisearning.homestead.com/Action_Team_Call_ppt.pptx.  The presentation notes that an Herbalife distributor developing a downline needs three groups:  (1) a “consumer group”; (2) “volume producer[s]”; and (3) “business builder[s].”  Of course, the last two groups can be lumped into a single group of downline distributors or recruits.  The presentation explains that the “business builder” group is “[f]or those who would like to develop financial freedom and on going [sic] ‘Royalty Income,’”—“[a] residual income that will pay for a lifetime.”  Id. at 10.  Under a section titled “Languaging,” Carr tells her audience of new distributors to “[u]se these words:”  “Excellent,” “Extraordinary,” “Unbelievable,” “Incredible,” “Outstanding,” and “Spectacular.”  Id. at 15.  Carr attributes this list of upbeat adjectives to “Doran Andry[,] May 16, 2007.”  Id.

• Businesses operated by Bartholomew and Carr have done considerable damage to consumers.  A consumer complaint regarding 2 More Money, available at http://www.planetfeedback.com/2moremoneycom/staff+attitude/knowledge/mlm+representatives+arrogant+behavior/48403, is particularly revealing:
  • The complaint cites an email received from Jason Payne, an associate of Bartholomew’s and Carr’s, in which Payne rejects the possibility that the Herbalife multi-level marketing scheme is in any way responsible for the complainant’s failed distributorship.  The complaint quotes Payne’s reply as including the following statement:  “The FACTS are—if you care of facts—that we work hard and we have a proven system in place.  The problem is that people who fail blame others and that is it.  No one likes to take a look in the mirror and blame them selves [sic].  Just remember when you point the finger that 3 are pointing back at you.”

Links to Other Senior Distributors

• Carr and Bartholomew are believed to be members of Chris Carley’s downline.  See, e.g. Carr Ex. I (Chris Carley listed under “Know Your Upline” for “important numbers” associated with Home Employed and 2 More Money—businesses operated by Carr and Bartholomew).
• In a class action lawsuit in federal district court in Los Angeles, the plaintiffs alleged that Bartholomew, among others, was “actively involved in the conception, formation and/or operation of the [New Ways to Wealth (NWTW)] System” and “made misrepresentations . . . and drafted and/or adopted the fraudulent NWTW promotional materials . . . .”  See Carr Exhibit U (Amended Complaint at ¶ 26, Jacobs. v. Herbalife International Inc., et al., No. 02-01431 FMC (C.D. Cal. May 2, 2013) (Herbalife and its co-defendants settled the Jacobs action in 2004 for approximately $6 million)).  Chairman’s Club member Doran Andry was a founder of NWTW in the late 1990s.  See Andry Report, p. 1.  The complaint further alleges that Bartholomew was “a close associate of [former President’s Team member Anthony Powell.

Links to Herbalife Corporate Leadership

• Carr and her husband, Tom, were featured in a 1999 edition of Herbalife Today upon qualifying for President’s Team.  Excerpt attached as Carr Exhibit V, full edition available at https://www.factsaboutherbalife.com/wp-content/uploads/2012/12/60.pdf (see p. 12).  The article centers on Carr’s income growth, noting that “Katie is earning an average income of $19,000 to $20,000 a month.  Now Katie is actually enjoying life . . .”  The article later quotes Carr as saying, “I made $1,600 in profit in my first month. . . .  In three months, I was able to quit my job. . . .  My immediate goal is to make $50,000 a month.  What I love best about Herbalife is that there are no limits.  You can go as far and high as you want. . . .  The marketing plan has no limits, no caps.”
• Herbalife awarded the Bartholomews the Mark Hughes Bonus Award—a large, discretionary bonus that Herbalife awards to top distributors—in 2003.  See https://www.factsaboutherbalife.com/wp-content/uploads/2012/12/97.pdf at 4.

 

 

[1] Carr Ex. B is also available at http://web.archive.org/web/20040205103922/http:/www.2moremoney.com/online_packages/super_exec_forms.pdf.  Carr Ex. C is also available at http://web.archive.org/web/20050320230150/http://www.homeemployed.com/training/Training/documents/2mmOrderFm595.doc.  Carr Ex. D is also available at http://web.archive.org/web/20090616181812/http://www.homeemployed.com/training/training/documents/WHEELSignUPProcedure.doc.

[2] To the extent that any of the videos in this report requires a password, the password is “carr”.