SAN DIEGO– LAWFUEL – The Law Newswire –The Fraud Discovery Institu…

SAN DIEGO– LAWFUEL – The Law Newswire –The Fraud Discovery Institute today posted on its website a new 19-page report on Usana Heath Sciences, Inc (NASDAQ: USNA) by noted multi-level marketing expert Robert Fitzpatrick. The report documents that Usana has operated under scrutiny of regulators for so long because Usana, like Enron, has “stolen the identity of a legitimate direct selling company when in reality it is nothing more than a glorified ‘chain letter’.” Fitzpatrick’s report, titled Usana Health Sciences: A Case of Corporate Identity Theft, was posted today at

Robert Fitzpatrick is president of Pyramid Scheme Alert, (, a non-profit, independent consumer education and advocacy organization begun in 2000. Fitzpatrick has provided expert witness services involving pyramid schemes and deception in multi-level marketing schemes; consultant services to the country of Sri Lanka, writing its first anti-pyramid scheme law; and been a featured speaker at national meetings of state and federal regulators, fraud specialists and ethics professionals. He is also one of the quoted experts in the original report issued by the Fraud Discovery Institute.

“Traditional frauds involve crooked transactions that are hidden inside an otherwise legitimate model. In the case of Usana, however, they conduct legitimate operations, such as making useful, though absurdly overpriced, products inside the flawed business model of a pyramid recruitment scheme,” Fitzpatrick said. “This is evident in that Usana has no end-users of any financial consequence. Their sales and growth really consists of replacing failed distributors.”

Fitzpatrick, who is neither a short-seller nor a seller of tools to Usana distributors, has testified or consulted on the multi-level marketing industry for four state attorney generals (Florida, North Dakota, Tennessee, and Kansas) as well as the United States Department of Justice.

“To put the corporate identity theft strategy of Usana in proper perspective, an analogy involving a better-known company that also employed a false identity will be useful: Enron,” Fitzpatrick stated. “Assuming the identity of an economic miracle, Enron grew to be America’s 7th largest corporation. But as was later revealed, Enron’s fraud involved false or misguided accounting, misleading publicity, falsely reported sales, phony subsidiaries, compromised and corrupted analysts, manipulated stock prices, and SEC reports that omitted or misrepresented material fact.”

According to Fitzpatrick, “Usana’s deception is larger than omissions in SEC filings, far more harmful than foisting overpriced products, more far reaching than lavishing stock options on its insiders, more significant than tax avoidance by its top executive, and much more serious than fake resumes of its directors, conflicts of interests by its medical advisors and gross misrepresentations to its distributors, though all of this occurs. The deception is even grander in scale than operating a product-based pyramid scheme.”

“After reading this document, nobody can claim with a clear conscience that the evidence cited by Mr. Fitzpatrick to corroborate and substantiate his points is persuasive and convincing,” said Barry Minkow, Co-Founder of the Fraud Discovery Institute.

Fitzpatrick’s report, Usana Health Sciences: A Case of Corporate Identity Theft, can be read in its entirety at

About Fraud Discovery Institute

Over the past 5 years, the Fraud Discovery Institute and Barry Minkow has uncovered and stopped over $1 billion in financial fraud. With experience on both sides of the law concerning financial fraud, FDI is uniquely positioned and qualified to help companies and individuals as it relates to maters of fraud.

Once a fraud does occur, the costs in earnings, manpower, possibly hostile litigation, higher insurance premiums, and corporate credibility are hard to contain. FDI’s proactive fraud detection and awareness program can save time, money, embarrassment, and potential damages in a class-action lawsuit.

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