Don Lapre Ordered to Stop Doing Business in Maryland
Stephen Barrett, M.D.
The Maryland Department of Securities has banned Don Lapre and his company The Greatest Vitamin in the World from continuing to do business in Maryland. The cease-and-desist order (shown below) notes that the company was not registered to sell business opportunities and had failed to give refunds to dissatisfied customers as promised.
SECURITIES COMMISSIONER OF MARYLAND
IN THE MATTER OF:
THE GREATEST VITAMIN
|Case No. 2007-0674|
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FINAL ORDER TO CEASE AND DESIST
WHEREAS, the Securities Division of the Office of the Attorney General of Maryland (the “Division”), under the authority granted under the Maryland Business Opportunity Sales Act, MD. BUS. REG. CODE ANN. §14-101 et seq. (2004 Repl. Vol. and Supp. 2007) (the "Maryland Business Opportunity Act") initiated an investigation into offers and sales of business opportunities by The Greatest Vitamin in the World, LLC and Don Lapre (collectively “Respondents”); and
WHEREAS, based on information presented by the Division, the Maryland Securities Commissioner (the "Commissioner") determined that grounds existed to allege that Respondents violated the registration, disclosure, and antifraud provisions of the Business Opportunity Act; and
WHEREAS, on February 1, 2008, the Commissioner issued a Summary Order to Cease and Desist and Order to Show Cause (“Order to Show Cause”) against Respondents, ordering them to immediately cease and desist from the offer or sale of business opportunities in or from Maryland pending a hearing in this matter, and further ordering them to show cause why a final order should not be entered ordering them to cease and desist from offering business opportunities in Maryland and ordering that they be permanently barred from engaging in the offer and sale of business opportunities in Maryland; and
WHEREAS, the Order to Show Cause gave Respondents notice of the opportunity for a hearing in this matter, if requested in writing within fifteen (15) days of service, and further gave notice that if Respondents did not file an answer, including a request for a hearing, the Commissioner would enter a final order directing Respondents to permanently cease and desist from violation of the Maryland Business Opportunity Act; and
WHEREAS, Respondents were served with a copy of the Order to Show Cause on February 19, 2008; and
WHEREAS, on or about March 5, 2008, an attorney who identified himself as counsel for Respondent The Greatest Vitamin in the World, LLC (“GVW”), filed a response to the Order to Show Cause on behalf of GVW but did not request a hearing, advised the Division that he was not licensed to practice law in Maryland, and further advised the Division that GVW would not be filing a formal answer to the Order to Show Cause, and, as a result, GVW knowingly waived its right to a hearing; and
WHEREAS, Respondent Don Lapre did not file an answer or request a hearing in response to the Order to Show Cause, thereby knowingly waiving his right to a hearing;
NOW, THEREFORE, pursuant to section 14-110 of the Maryland Business Opportunity Act, the Commissioner finds that it is in the public interest to issue this Final Order to Cease and Desist, and the COMMISSIONER FINDS, CONCLUDES AND ORDERS:
1. The Commissioner has jurisdiction in this proceeding and over Respondents pursuant to section14-110(a) of the Business Opportunity Act.
II. FINDINGS OF FACT
2. GVW is an Arizona limited liability company with a principal address of 14809 S 25th Way, Phoenix, Arizona 85048.
3. Don Lapre is an individual with a business address of of 14809 S 25th Way, Phoenix, Arizona 85048.
4. GVW offers and sells business opportunities in the form of Internet websites advertising GVW vitamins and associated marketing support and services. GVW represents to buyers that they can earn income from selling vitamins on their GVW website and from having people sample GVW vitamins.
5. GVW marketed its business opportunity through television “infomercials” featuring Don Lapre (“Lapre”), who is a well known sales personality on television who frequently promotes home based businesses.
6. Among the claims that Lapre makes on the GVW infomercial are the following:
“Our company will pay you $1000 up front or up to $200 a month for the rest of your life every single time you get just 20 new people to try our amazing vitamin!”
“Each week we pay you on all the revenue earned the week prior! This is the easiest way in the world to start generating $1000 checks over and over again!"
“Our top people have made thousands and thousands of dollars doing this!”
“Each month you get just 100 new vitamin clients, we pay you a $5000 bonus! And the top two Independent Advertisers who create under 100 new vitamin clients also get a $5000 bonus.”
7. GVW represented that it offers a 90 day full money back guarantee to buyers of the GVW business opportunity.
8. After buyers purchased a website from GVW, GVW or an affiliate contacted the buyers to purchase, for additional fees, additional services to promote the business, including a “client building program” that the sellers represented would direct prospective clients to the buyers’ websites.
9. GVW or its affiliated companies also solicited buyers to purchase other services, including web design services, that the sellers represented was necessary for buyers to be successful in their GVW business opportunity.
10. Maryland buyers paid more than $300 to GVW, or other entities referred to them by GVW, for the GVW business opportunity.
11. GVW did not honor refund requests from Maryland buyers who requested them.
12. Based on the foregoing, Respondents offered and sold in Maryland “business opportunities” as defined under section14-101(b) of the Maryland Business Opportunity Act.
13. Respondents never registered to offer and sell business opportunities in Maryland, as required under section14-113 the Maryland Business Opportunity Act. See Exhibit 1, Affidavit of Peggy D. Shanks, Senior Examiner, Maryland Securities Division.
14. Respondents never gave a business opportunity disclosure statement to Maryland buyers, as required under section14-114 the Business Opportunity Act.
15. Respondents represented that GVW provided a complete money back guarantee to buyers who requested a refund, but that representation was false.
16. Respondents made claims about the earnings and bonuses buyers have made with the GVW business opportunity, but Respondents did not provide substantiation of those claims at the time they were made.
III. CONCLUSIONS OF LAW
17. Respondents The Greatest Vitamin in the World, LLC and Don Lapre violated section 14-113 of the Maryland Business Opportunity Act by offering and selling GVW business opportunities in Maryland without registering the GVW business opportunity with the Commissioner as required under the Maryland Business Opportunity Act;
18. Respondents The Greatest Vitamin in the World, LLC and Don Lapre violated section 14-114 of the Maryland Business Opportunity Act by failing to give prospective Maryland buyers of the GVW business opportunity a copy of the disclosure document required under the Maryland Business Opportunity Act.
19. Respondents The Greatest Vitamin in the World, LLC and Don Lapre violated section 14-120 of the Maryland Business Opportunity Act by making false statements or omissions of material fact about the GVW business opportunity by representing that GVW provided a complete money back guarantee when GVW filaed to honor request for refunds.
20. Respondents The Greatest Vitamin in the World, LLC and Don Lapre violated section 14-122 of the Maryland Business Opportunity Act by making representations to prospective Maryland buyers about the earnings and bonuses that buyers have made with the GVW business opportunity, when the Respondents did not provide substantiation of those representations at the time they were made.
21. IT IS HEREBY ORDERED THAT Respondents The Greatest Vitamin in the World, LLC and Don Lapre permanently cease and desist from violating the registration, disclosure and antifraud provisions of the Maryland Business Opportunity Act.
22. IT IS FURTHER ORDERED THAT Respondents The Greatest Vitamin in the World, LLC and Don Lapre are permanently barred from engaging in the offer and sale of business opportunities in Maryland.
V. JURISDICTION RETAINED
23. Jurisdiction is retained by the Commissioner for the purposes of enabling any party to this Final Order to Cease and Desist to apply for such orders and directions as may be necessary or appropriate for the construction or enforcement of this Final Order to Cease and Desist.
VI. NOTICE OF APPEAL RIGHTS
24. Pursuant to the Code of Maryland Regulations, COMAR section 02.02.06.24, each Respondent has the right to file an appeal of this Final Order to Cease and Desist with the circuit court of Maryland. Any appeal must be filed within 30 days from the date this Order is mailed by the Division.
Commissioner’s Signature is on File with Original Document
Dated : April 4, 2008
MELANIE SENTER LUBIN
CERTIFICATE OF SERVICE
I hereby certify that I have this day served the foregoing Final Order To Cease and Desist by causing a copy to be sent by United States Mail, prepaid, certified delivery, return receipt requested, addressed to:
The Greatest Vitamin in the World, LLC
c/o Don Lapre
14809 S 25th Way Phoenix, AZ 85048;
Mr. Don Lapre
14809 S 25th Way
Phoenix, AZ 85048; and
Brian M. Mueller, Esquire
Mariscal, Weeks, McIntyre & Friedlander, P.A.
2901 North Central Avenue Suite 200
Phoenix, Arizona 85012-2705;
and by delivering a copy to Melanie Senter Lubin, Securities Commissioner, Maryland Division of Securities, 200 St. Paul Place Twenty-fifth Floor, Baltimore, Maryland 21202.
Dated: , 2008
Dale E. Cantone
Assistant Attorney General
Maryland Division of Securities
200 St. Paul Place - 25th Floor
Baltimore, Maryland 21202-2020
This page was posted on November 25, 2005.