The FTC has revealed the Success By Health defendants, upon learning of the regulator’s investigation, set about plans to conceal and delete evidence.

As retold by the FTC in a November 4th opposition filing;

On May 15, 2019, months before the FTC filed its case, the Individual Defendants learned the FTC was investigating SBH.

The next day, at Jay Noland’s direction, they each downloaded and installed the “Signal” encrypted messaging application on their phones.

Signal only stores messages locally on users’ phones rather than in any central sever or cloud-based storage.

The Individual Defendants subsequently instructed other SBH officers and employees to download and use Signal for SBH business.

From May 2019 through entry of the Court’s TRO in January 2020, the Individual Defendants used Signal to communicate with each other and other SBH officers and employees about “important things”.

As per the January 2020 TRO, Noland and his co-conspirators were ordered to turn over “documents or communication” to the Receiver.

Defendants chose not to comply with these orders, failing to provide any Signal communications to the Receiver.

Instead, in August 2020, right as they were about to have their phones imaged, all four Individuals Defendants uninstalled the Signal app within 12 hours of each other, irreversibly deleting all of their SBH-related Signal communications since May 2019.

The FTC states it is “likely … thousands of messages” were exchanged between the SBH defendants. What did Jay Noland want to hide from the FTC?

Perhaps that’s a rhetorical question given the
pyramid scheme allegations
leveled at SBH.

Particularly damning is that the SBH defendants thought they’d pulled a fast one over the FTC.

Their use of Signal and deletion of evidence was of course not disclosed to the FTC or the court.

The FTC only learned of Signal at all, and the Defendants’ deletion of texts and emails, because of its independent investigation.

Days after the Defendants’ belated, Court-ordered September 30 production, the FTC identified several mentions of Signal, which prompted the Individual Defendants’ admissions to its use.

The FTC’s investigations also revealed deleted emails, again in violation of the court-ordered injunction.

The Individual Defendants admitted to deleting emails only after the FTC independently obtained a copy of a May 29, 2020 email in which Mr. Noland instructed former SBH Director of Sales, Robert Mehler, regarding what SBH Affiliates should say in their declarations for use in these proceedings.

The email is clearly relevant and hits on the parties’ agreed search terms, but Defendants never admitted its existence—or the existence of any post-TRO emails with Affiliates— until confronted by the FTC.

In the wake of the Individual Defendants’ shocking spoliation, they now request a stay.

After admitting their use of Signal, a few weeks later the SBH defendants claimed

they had been using Signal’s “auto-delete” function to

🤖 Quick Answer

What evidence destruction allegations has the FTC made against Success By Health defendants?
The FTC alleges that Success By Health defendants deliberately concealed evidence upon learning of the regulatory investigation. Following Jay Noland's directive in May 2019, defendants downloaded Signal, an encrypted messaging application storing data locally rather than on servers, and instructed company officers and employees to use it for business communications until January 2020.

Why did the defendants choose the Signal messaging application?
Signal was selected specifically because it stores messages locally on users' phones rather than maintaining records on central servers or cloud-based storage systems. This characteristic prevented message retention and accessibility, facilitating the concealment of communications from regulatory authorities investigating the company's practices.

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