Dan Waldron

• Waldron is the registrant of www.dallassts.com, a website that provides local distributors information on Herbalife “training” opportunities.  See Exhibit L; Exhibit C (Waldron lists Dallas STS (Success Training Seminar) under “Groups and Associations” on his LinkedIn website); see also Recruiting Materials, infra at 10.

• Dallas STS, at the bottom of the homepage, links to six other local STS websites:

Lubbock STS (http://lubbocksts.com/)

Oklahoma STS (http://oklahomasts.com/)

Prague STS (http://praguests.com/)

The Phoenix STS (http://thephoenixsts.com/)

Upstate NY STS (http://www.upstatenysts.com/)

Ohio STS (http://www.ohiosts.com/)

• These websites are nearly identical to Waldron’s Dallas STS site.
• Waldron is the registrant of www.work-from-home.net, a lead generation website.  See Exhibit M; see also Lead Generation, infra at 8.
• Waldron has registered many websites with Hispanic community references in the domain names.  See Exhibit N.

Dallashispanics.com

Hispanicsinamerica.com

Latinosendallas.com

Latinosinamerica.com

Latinosindallas.com

• Waldron has also registered a number of other Herbalife-related websites.  See Exhibit O.

Dietmagic.net

Evitality.net

Internet-cash.net

Primary Source Data on Business Practices

• Dan Waldron appears in videos promoting the Herbalife business opportunity.
  • In one such video, available at https://vimeo.com/user24651359/review/85484438/9e7defbe8c, Waldron promotes a 2012 Herbalife “Spectacular” in New Mexico by telling new distributors that he relied on Herbalife success stories when he was a fledgling distributor.  Waldron tells his audience of new distributors, “I never thought in a million years Herbalife was for me, but I went to a meeting, just like some of you are at today, kind of looking around like, what’s the deal here, what is this Herbalife?  And when the stories walked across the stage, I couldn’t even believe what I was seeing.  I was so excited, I joined . . . and I went out there and I started making $500 a month, $1,000 a month.  It turned into a fulltime income.  I’ve made millions of dollars with the company, but I’m so excited for the future.”  It is highly misleading to suggest that new recruits could earn such income.  According to Herbalife’s Statement of Average Gross Compensation of U.S. Distributors in 2012, attached as Exhibit P and available at http://opportunity.herbalife.com/Content/en-US/pdf/business-opportunity/StatementAverageCompensation2011EN.pdf, only three-hundredths of one percent of Herbalife distributors in the U.S. earn even $250,000 per year in payments from Herbalife, while 88% of those distributors earn $0 per year in payments from Herbalife.

• In Waldron’s Chairman’s Club profile video, available at https://www.factsaboutherbalife.com/?s=dan+waldron, Waldron tells distributors that success was fast and easy with Herbalife.  Waldron claims that Herbalife paid for his college education, saying “When I first started I was a—you know, repairing furniture in Houston.  And then when I got involved in the business, very, very shortly after that I moved to Austin and I started going to school.  And four years, Herbalife paid, you know, all the university—books, tuition, everything.  For four years.  Walked out with no loans.  Which is unheard of.  And then I went right in, went full-time with it.”
• The video features depictions of Waldron’s mansion, his BMW and Mercedes vehicles, the Waldron family playing sports around the house like swimming, billiards, and soccer, and other visuals that depict a life of wealth and little stress.  Waldron tells a story from 1993, when he was “at 12 to 15,000 a month” as a Millionaire Team member, where he drove his $2,000 car into a Lexus dealership “ten minutes before they closed, and I wrote a check and I bought a brand new Lexus.  And that’s what I’d buy my kids on, you know, for Christmas now [laughs].”
• Later in the video, Waldron’s wife, Vicki, tells distributors that life is easy as an Herbalife distributor, saying, “We just have such flexibility in our lives”, and noting that even “with four kids, really busy kids, we never miss anything.”
• At the conclusion of the video, Waldron tells distributors that the only way to fail is to quit.  “The only way anybody’s ever failed at Herbalife—and I’ve been around over 20 years—is they dropped out.  You concentrate, and you focus in on it, and no question about it.  I mean, we’re just getting going, and we’re at three billion. Can you imagine in five years where we’re gonna be?  What a great company.  How blessed we are.  Incredible.”  This is highly misleading.  In reality, Herbalife’s 2012 Statement of Average Gross Compensation of U.S. Supervisors, discloses that two-thirds of first-time Supervisors, and half of all Supervisors, failed in 2012.  (Exhibit P.)  And the last time Herbalife disclosed failure rates for distributors who had not reached the level of Supervisor, in its 2005 10-K, Herbalife disclosed that “more than 90% of our distributors that are not supervisors turned over.”  (Page 24 of Herbalife’s 2005 10-K, excerpt attached as Exhibit Q.)

• Waldron delivered a highly deceptive speech at Herbalife’s Chairman’s Club Tour event in New York on December 18, 2013, which focused largely on Waldron’s own rise through the Herbalife marketing plan and the supposed ease with which any distributor can achieve life-changing financial success with the Herbalife business opportunity.  The speech is available at https://soundcloud.com/hlfaudio/waldron-12-18-2013, and a transcript is attached as Exhibit R.  See also infra at 23 for the Waldron Chairman’s Club Tour flyer.
  • Waldron begins his speech by briefly recounting his supposed rags-to-riches story with Herbalife, telling the audience of new distributors that they, too, could experience the same level of success.  Waldron says, “When I got started, you know, as an Herbalife member, I got an international business package—membership package.  And I started at 25 percent . . .  I was a furniture repair man and I was very poor.  And then I moved up to the thirty percent and forty two percent and then I became a supervisor.  So you can start wherever you are tonight, at the twenty five percent commission, you can work up to thirty five percent, you can work forty two percent as a success builder and ultimately you can become a supervisor in our company.”  (1:11:29 – 1:12:24.; see also 1:15:24 – 1:19:38) (discussing how “beat up” his former homes were when he was “very poor.”  “I never thought I would ever have anything in my life.”))
  • Waldron then refers to the importance of recruiting for Herbalife’s business model, invoking the image of a “family.”  Talking about “the business opportunity we have,” Waldron tells the distributors in the audience, “Let’s help tons of people out there to make $500 a month, $1,000 a month, $1,500 a month.  That can completely and totally change all of New York.  I mean, there’s thousands of people that would be here tonight if they understood who we are and what we stand for.  And it’s your job to work as a family together with our company.”  (1:14:17.)
  • Waldron describes, with great excitement, using every penny to his name to join Herbalife in December 1982, implicitly encouraging new distributors to do the same.  (1:21:45 – 1: 22:54.)
  • Waldron tells the audience that all they have to do is follow the program they are taught to have immense monetary success with the Herbalife business opportunity.  “You can have all this [referring to Waldron’s life].  If you pay attention, you work as a unit together with each other, you use the products, wear the button, talk to people, become teachable and you can have your dreams to [sic] come true as my dreams have come true.”  (1:24:09 – 1:24:26.)
  • Waldron spends approximately eight minutes describing (and showing photographs of) his Herbalife-related travel, including trips to Yellowstone National Park, Colorado, Cabo San Lucas, Hawaii, Australia and New Zealand, Vietnam and Japan. Waldron notes that “[t]he vacations and the experiences that you have the possibility to be a part of if you just use the products, wear the button, talk to people, come to the support systems, keep a great attitude all day long, all kinds of things can happen for you as well. . . .  [J]ust the places I’ve been able to go in the last 15 years is just remarkable.”  (1:24:34 – 1:32:.28.)
  • Waldron tells the story of asking his “Latino friend” Gabriel Sandoval to help Waldron train his downline Latino distributors in the Dallas area.  Waldron recounts that “when I was going for Chairman’s club, I had a girl, Maria Sosa . . . in Dallas, and she was building up GET [Global Expansion] Team and Gabriel and I were good friends.  I said, I need your help.  I says, I have a Latino, I says, half my organization, you know, they don’t speak English and I’m working hard with them, but man, if you could come and help me and do this thing.”  (1:32:48 – 33:05.)  Later, Waldron encourages the “98% Latin” audience to attend the “Extravaganza for the Latinos in Atlantic City” in October 2014.  (1:52:29.)  As Pershing Square showed in its December 20, 2012 presentation at the Ira Sohn Investor Conference, Herbalife targets Hispanics as potential recruits.
  • Waldron later notes that “seventy million dollars [is] gonna be distributed” at the Herbalife Honors event in Hawaii in March of 2014.  Waldron continues, telling his audience that “Herbalife is so generous, it’s like they stay up at night trying to figure out what to give you guys. . . .  They’re such a generous, unbelievable company.  We’re so blessed, we’re so fortunate to be working with such a great, great company.  And it’s all you have to do is your job.  You’ve just got to do your job.”  (1:54:20 – 54:58.)
  • Waldron tells the audience that education is not a prerequisite to success with Herbalife, saying, “When I really fell in love with Herbalife is when I recognized you didn’t have to be that smart to do it.  That was exciting for me.”  He quotes Herbalife founder Mark Hughes, explaining to the audience that to be a successful distributor with Herbalife, “Hughes . . . says, you’ve just got to use the products, you got to wear the button, you got to talk to people . . .”  Waldron also notes that “Mark [Hughes] [only] graduated from the 9th grade. . . .  Unbelievable guy, but he didn’t have a lot of education.”  (1:55:08; 1:58:48.)
• Waldron hosts “Mansion Parties” at his home in Plano, TX, for distributors who order the highest amount of volume of Herbalife products.

• Waldron also speaks regularly at Herbalife Opportunity Meetings (HOMs) around the world.  According to Herbalife, HOMs are presentations to which potential distributors are invited to learn more about the business opportunity.  See Exhibit S for explanation of HOMs by Herbalife in a company presentation on “How to grow a STRONG royalty check.”

Waldron speaks at Herbalife’s July 2012 “Super HOM” in Singapore, available at https://www.facebook.com/media/set/?set=a.447036778652787.94576.377627508927048&type=1#!/media/set/?set=a.447036778652787.94576.377627508927048.

• Members of Waldron’s downline repeat Waldron’s deceptive income claims in their efforts to recruit other distributors into the scheme.
  • President’s Team member Kris Bickerstaff tells an audience at an Herbalife event that “I sat in Dan Waldron’s house’s living room, and he showed me a picture of Shawn Dahl and his wife, and said, ‘You could be like them,” and then he told me how much money they make, and I said, I’m in, let’s do it.”  See https://vimeo.com/user24651359/review/85485784/932759df0a, at 1:27.
  • President’s Team member Tim Files, speaking from a pool at the “President’s Team vacation” in Costa Rica for a promotional video for the Northern California region, says, “my upline and mentor Dan Waldron said, ‘Every STS, if you can get ten people there, you’ll be Pres Team in one year.’  And listen, I hit five—I averaged five at every STS, and I hit Pres Team in two and a half years.”  See https://vimeo.com/user24651359/review/85486089/7a06cad89f, at 0:53.  Yet the 2012 Statement of Average Gross Compensation states that, among distributors who reached President’s Team in 2012, they averaged nine years with Herbalife before reaching that level, “with the longest being 20 years and the shortest being less than three years.”  See Exhibit P
  • Waldron features Bickerstaff and Files at his Dallas STS meetings.  See infra at 15-16.

Lead Generation Materials

• After his divorce from Carla Berg in 2000, Dan Waldron took over their lead generation website called “Work From Home!” (www.work-from-home.net).[2]  The Work From Home! site now links directly to Waldron’s official Herbalife Independent Distributor website (www.goherbalife.com/dwaldron/).  However, the older site can still be viewed at http://web.archive.org/web/20000510160902/http://www.work-from-home.net/.
  • The site promoted Waldron’s “proven Internet Marketing system,” and provided a link for potential recruits (i.e., leads) to order a $39.00 “decision pack (book, audio tape, and videocassette)” and then be put in touch with a “personal business coach” (i.e., an Herbalife distributor who would attempt to recruit the lead).  See http://web.archive.org/web/20000510221252/http://www.work-from-home.net/request.htm.  The Order Form page tells prospective buyers that “[a]ll you need is the courage to get started.  You can do this business, as long as you are teachable and have the desire to succeed.”
  • The site also featured articles with titles like “The Road to Success: Why this will work for you, too!” and “Build a Worldwide Business: How you can build a world-wide business from the comfort of your home.”

Recruiting Materials

• The 2-4-1 Plan is a plan that pairs new Herbalife distributors with an experienced “sponsor” and purportedly enables distributors to reach President’s Team status in under one year.^[3]  See http://www.the241plan.com/.  The site provides a presentation that outlines the plan.  See Exhibit T.
  • The presentation encourages the use of scripts to recruit new distributors into the scheme.  “Work with your sponsor— they have Scripts for you to use!  How to APPROACH your acquaintances . . . . What to say to them . . . .”

• The 2-4-1 Plan also puts forth deceptive income claims that a distributor can make “$8,000/Month” by his or her seventh month as a distributor.

 

• Dallas STS is a series of training seminars that similarly rely on deceptive income claims and encourage distributors to focus on recruiting new distributors into the scheme rather than making retail sales of Herbalife products.  The Dallas STS website, www.dallassts.com, which is registered to Waldron, also advertises Herbalife recruiting events and publicly lists “Top Producers” in the region.
• Waldron was also featured on a website called “3 Step Recruiting,” which purports to offer a “3 Step Home Business Solution . . . to Several Thousands of Dollars Every Month.”  See http://www.3steprecruiting.com/.^[4]