Huiqin Xiong, a Jeunesse distributor since August 2015, filed a class-action lawsuit in California on August 10th, alleging the company operates as an illegal pyramid scheme. Xiong claims she lost approximately $10,000 pursuing her Jeunesse business.
The lawsuit names Jeunesse Global and top distributor Kim Hui as defendants. Xiong asserts that Hui, who reportedly earns over $6 million annually, derives her income not from selling products to retail customers, but from recruiting new distributors. This recruitment-based compensation structure, Xiong contends, is the company's primary revenue generator.
Xiong cites a video where Hui apparently admits that retail commissions represent the smallest portion of distributor earnings. Hui is quoted as saying, "I forget about retail commissions for me – I’m in this not to sell product. I’m here to build a global distribution. I’m not a salesperson; I’m a business builder." This statement, according to the lawsuit, confirms that Hui's substantial income stems from building a downline rather than genuine product sales.
The complaint alleges that Jeunesse's business model requires a constant influx of new distributors because the majority of products are sold to these distributors, who then become the primary consumers. This creates a dependency on continuous recruitment to sustain the operation. Xiong further claims that even distributors attempting to make retail sales are hampered by others selling products on platforms like Amazon at prices below wholesale. Within certain communities, like the Chinese-American demographic, distributors are allegedly encouraged to sell at wholesale prices and rely solely on commissions from downstream recruits.
Xiong joined Jeunesse believing she could achieve significant wealth by recruiting others. The lawsuit states that despite her commitment and effort, she ultimately failed because the company's marketing plan inherently rewards recruitment over actual product sales to external customers. This structure, she argues, dooms most distributors from the outset.
The lawsuit also points to claims made by Jeunesse board members regarding the supposed benefits of the company's products. The core allegation remains that Jeunesse takes money from individuals in exchange for the right to sell products and gain rewards for recruiting more participants, the defining characteristic of an illegal pyramid scheme.