Jay Noland raised almost $600,000 in legal fees, lied to get it

Earlier today we covered the
appointment of a replacement Success by Health Receiver
.

A paragraph in Judge Lanza’s order caught my attention.

The Receiver’s most recent report, issued earlier today, accuses the Individual Defendants of violating the terms of the preliminary injunction (by failing to provide a detailed description of the intended activities of their new business venture, “SBH Products, Inc.”), of operating this new business venture in an illegal manner (by, among other things, using SBM’s proprietary formulas and goodwill without permission), and of defrauding affiliates in an effort to raise legal defense funds for this case (by making false statements about the supposed existence of a bank account filled with withheld commissions, when in fact “there is no such account”).

In this article we take a look a the Receiver’s report and the quoted accusations in detail.

Before we get into the accusations cited by Judge Lanzo, we need to cover Success by Health’s product sales.

The Receiver reports that Success by Health’s

product sales have continued their downward trend in the last three months, with a sharp decline in July 2021.

The Receiver increased the discounts offered on products substantially in response to the low sales in July 2021.

Effective July 30, 2021, all product is offered at discounts of between 25%-50%.

The discounts appear to be spurring additional sales, with $2,243.65 in sales since the implementation of the discounts (as of August 10, 2021).

The Receiver notes that Jay Noland and his fellow defendants, together the “Noland defendants”,
‘continue to object to any discounting of product.’

Despite sales increasing at the discounted rate;

The Company continues to have large volumes of inventory available for sale.

However, if sales do not increase, the expense of continuing sales may be higher than the money received.

At that point, the Receiver’s replacement may opt to request permission from the Court to cease product sales.

On July 14th the Noland defendants’ attorney notified the Receivership that

he had advised his clients to contact the manufacturers of Success By Health’s products and arrange to sell the products themselves.

The following day, on July 15, 2021, counsel for the Individual Defendants notified the Receiver and the FTC that the Individual Defendants intend to immediately commence a new business under the name “SBH Products, Inc.,” and that the business will engage in the sale of products previously sold by Success By Health.

There is no clarification whether SBH Products would be an MLM company or straight product company.

In light of the Noland defendants objecting to selling SBH products at a discount and the continuing decline in sales, selling the products through a new entity would seem pointless.

That aside, the Noland defendants’ plan was also in violation of the granted preliminary injunction.

The Receivership is in charge of Success By Media Holdings and Success by

🤖 Quick Answer

What legal violations did Jay Noland's group face according to the Receiver's report?

How did the defendants allegedly deceive affiliates regarding legal fees?
They falsely claimed the existence of a bank account filled with withheld affiliate commissions to solicit funds for legal defense purposes, when no such account actually existed, thereby committing fraud against their business partners.

What was the unauthorized business venture mentioned in the case?
The defendants established SBH Products, Inc., operating it illegally by utilizing Success by Health's proprietary formulas and business goodwill without permission, constituting a violation of the preliminary injunction order.

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