The shareholders of USANA have filed a lawsuit against USANA Health Science citing

“the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them:

1. that the Company’s business model was unsustainable because it required the constant recruitment of new Associates due to a high level of attrition within the Company’s sales force
2. that USANA’s multi-level marketing model operated as a pyramid scheme
3. that the majority of the Company’s Associates did not actually sell to consumers, but rather to other Company Associates
4. that over 74 percent of the Company’s Associates were failing within the first year of joining the Company
5. that over 87 percent of the Company’s Associates were losing money instead of receiving compensation for their sales efforts
6. that USANA lacked adequate internal and financial controls; and
7. that, as a result of the foregoing, the Company’s statements about its future business prospects and projections were lacking in a reasonable basis when made.”

Here’s the source:
http://www.marketwire.com/mw/release_html_b1?release_id=235354

The truth about USANA Health Sciences according to Barry Minkow:

• 70% of revenue in 2006, went to the top 3% distributors
• 87% of distributors associated with USANA are losing money
• Overpriced products used to sustain pyramid structure voids USANA’s claim of a GEICO effect
• 74% of distributors fail within the first year

Watch the video from FraudDiscovery.net for the full story:

Approximately three months ago I was approached by an old friend with a job offer to work within his team at USANA Health Sciences.

“USANA? Who’s USANA?” I thought to myself.

In his messages he seemed very excited and adamant about getting me to meet with him and his director. Instead of turning down his offer, I asked him to tell me more about this company. This is some of what he wrote:

“Alright man… Well I started working for a Health Science company with a few of my close friends… and a few others that you may or may not know.
Things are really going great in this company and we are looking for some hard working individuals, and you are one of the people I thought of. I told my director a bit about you, and I know you being creative and a hard worker is something they are definitely looking for.
They are based out in Salt Lake City Utah but my director I am working with is in charge of expanding out to the California area. We have a few positions available now, so thats why Im talking to you. Most positions pay between a few hundred to a few thousand.”

When I read this I wasn’t too impressed. The first thing I decided to do was look the company up. After spending an hour or so looking at the company’s website and reviewing some news articles, I formed the opinion that USANA had a pyramid-like structure that I had no interest in learning anymore about. When I emailed my friend with my final decision, he was extremely offended and questioned my critique.

“Why would you judge something based on opinion instead of facts?”  He wrote.

The whole thing left me with a bad feeling, but that was the end of the correspondence.

This afternoon, I was reading the Wall Street Journal’s online edition and USANA Health Sciences made the news. According to Barry Minkow, a San Diego investigator, USANA is an unsustainable “Pyramid Scheme.”

In fact, many of the company’s executives are under investigation for misrepresenting their credentials. For example, Mr. Timothy E. Wood claims to have a Master of Science degree in Environmental Sciences and a Doctorate in Biology, both from the Yale University. According to Yale, Mr. Wood has two degrees alright… in forestry, not biology.

This is a major misrepresentation when you take into consideration USANA is a health science company and the Vice President of Research and Development does not have any background in biology.

Anyway, a big I told you so is in order. So… I TOLD YOU SO.

Anyone who is interested in reading the article, here is a link to it:
http://online.wsj.com/article/SB117529141088755047.html