The Federal Trade Commission on October 2, 2019, fined AdvoCare and its former CEO Brian Connolly $150 million, banning them permanently from multi-level marketing. The agency declared the company an illegal pyramid scheme that deceived hundreds of thousands of consumers into its "distributor" program for health and wellness products.

AdvoCare had announced in May that it would end its multi-level marketing operations, citing confidential discussions with the FTC. The commission's subsequent public statements clarified these discussions were part of an enforcement action. The FTC's investigation found AdvoCare and Connolly had swindled participants by structuring compensation primarily around recruitment rather than genuine retail sales.

AdvoCare operated as a classic pyramid scheme. It pushed distributors to recruit new participants instead of selling products to actual customers. The compensation plan rewarded distributors for purchasing large amounts of AdvoCare products themselves, often to qualify for higher ranks. It also incentivized them to build downlines of other participants who faced the same purchasing pressures.

Distributors earned income based on their success in recruiting others. The highest payouts went to those who brought in the most new advisors and generated the largest purchase volumes from their downline networks. AdvoCare's internal policies for verifying retail sales proved to be superficial, serving largely as a facade.

Recruitment tactics also drew regulatory scrutiny. AdvoCare and its associated defendants instructed distributors to make inflated claims about potential earnings. They suggested average individuals could earn hundreds of thousands or even millions of dollars annually. Distributors were trained to craft emotional stories of financial hardship before AdvoCare, followed by significant financial success once they joined.

Recruiters also instilled fear in potential participants, suggesting they would regret not investing in AdvoCare. They told consumers that earnings were limitless, constrained only by effort. This promise of financial freedom rarely materialized for the vast majority of participants.

In 2016, 72.3 percent of AdvoCare distributors received no compensation. Another 18 percent earned between one cent and $250. Just 6 percent earned between $250 and $1,000. This distribution of annual earnings remained largely consistent from 2012 through 2015.

AdvoCare and Brian Connolly did not contest the FTC's findings. They consented to the $150 million judgment and the permanent ban from operating any multi-level marketing business. This settlement allowed the company to avoid a protracted legal battle over the pyramid scheme allegations.

The FTC also pursued charges against top AdvoCare distributors Danny and Diane McDaniel, and Carlton and Lisa Hardman. These individuals faced allegations of unlawfully promoting a pyramid scheme, making deceptive earnings claims, and providing others with the tools to do the same.

The Hardmans settled their case on October 2, 2019, agreeing to a $4 million judgment and a $100,000 fine. Their Alabama residence was ordered liquidated as part of the settlement. Information regarding the McDaniels' settlement status remains unavailable in public records.

The $150 million fine levied against AdvoCare will go towards providing restitution to victims. AdvoCare must also honor a 100% refund offer for any unused products. Despite the consented settlement, AdvoCare CEO Patrick Wright publicly denied the FTC's pyramid scheme allegations shortly after the order was announced. On May 5, 2022, the FTC announced it had returned over $149 million to AdvoCare victims.