Business

Vitamin sellers flagged by feds got coronavirus aid loans

A trio of supplements sellers snagged millions in coronavirus relief loans last spring — all within weeks of getting dinged by the feds for questionable claims about their products, The Post has learned.

The vitamin marketers joined the rush for Paycheck Protection Program aid in early 2020, even as their sales reps angled to cash in on the pandemic, government records show. The reps 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 stockpiling toilet paper, you need to do something to help you fight the virus!” a rep for Pruvit Ventures allegedly wrote in a post accompanied by an image of the Texas-based company’s products. “Boost your immune system with our Immunity Boost Pack!”

The claims of immunity boosting caught the feds’ attention in particular: While the pitches might seem sensible to health-minded consumers, the FTC says such claims are illegal because there’s no scientific evidence to back them up.

“Any coronavirus-related prevention or treatment claims regarding such products are not supported by competent and reliable scientific evidence,” the agency wrote in warning letters to Pruvit, Total Life Changes and Zurvita on April 24. “You must immediately cease making all such claims.”

Nevertheless, nine days before the FTC fired off its warning letters, Pruvit and Total Life Changes had been approved for PPP loans totaling almost $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, won its own loan of roughly $1.4 million on May 1 — about a week after the FTC’s letter raised red flags about two of its reps’ posts hawking Zeal, its supplement packed with botanicals and vitamins.

“Want to join me in drinking Zeal to combat the Corona Virus? Contact me . . . to learn how to be your own Corona Virus Super Hero!” one Zurvita rep’s post read, according to the FTC.

Yet another relief loan worth $565,402 went to supplement seller IDLife, which also got an FTC warning in April. The agency said the company’s representatives claimed people could earn “substantial income” selling its products during the pandemic-fueled economic crisis.

None of the four companies responded to requests for comment.

The loans come as critics gripe that the PPP program, meant to keep workers on payrolls during the pandemic, has ended up aiding businesses with checkered pasts and deep pockets.

The SBA opened applications on Jan. 11 for another $284 billion in PPP money authorized last month. Officials have imposed tighter rules for the latest round — publicly traded companies can’t participate, for example — and Congress gave the SBA additional funding to conduct audits and root out fraud.

But that doesn’t change the fact that sketchy businesses got a lifeline that many small firms missed, according to Kyle Herrig, president of Accountable.US, a left-leaning good-government group that tracks coronavirus relief spending.

“Shady MLMs were showered with PPP money because the Trump administration let banks approve taxpayer-backed loans to practically anyone, even if they didn’t need it,” Herrig told The Post.

Nutrition companies make up a significant chunk of the multi-level marketing industry. Known as MLMs, such firms can walk a thin line between being considered legitimate businesses and illegal pyramid schemes. In the latter case, firms reward reps for bringing in new recruits and often pressure them into buying the products they’re supposed to be selling, according to the FTC.

There’s 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 feds of running pyramid scams, records show.

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 lawsuit alleging that it pressed distributors to focus on recruiting new reps rather than making sales to customers.

The company also made unsubstantiated claims that one of its supplements could prevent brain diseases such as Alzheimer’s and Parkinson’s, according to the feds.

Neora — which “firmly” denies the FTC’s allegations — used the PPP money to retain its staff and cover other business expenses amid the pandemic, co-CEO Deborah Heisz said.

“As with almost every other business in the US, when the pandemic began there was a lot of uncertainty about what the future would look like and we were concerned for our approximately 90 full-time employees,” Heisz told The Post. “When the Paycheck Protection Program issued its guidelines, we reviewed them closely and determined Neora qualified for the loan.”

Vemma Nutrition Company — which got $227,500 in PPP funds — agreed to stop its pyramid-scheme practices under a 2016 settlement with the FTC. A federal court order in the case slapped the company with a staggering, $238 million penalty that was supposed to be “partially suspended” as long as Vemma paid about $470,000 and surrendered some of its assets, the agency said at the time.

Vemma did not respond to a request for comment.

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