An Arizona court has ruled Success by Health was a pyramid scheme.

Having now considered the disputed evidence in its capacity as finder of fact, the Court concludes that the FTC should also prevail on its pyramid scheme claim as to SBH.

The decision marks the first significant MLM related win for the FTC since the Supreme Court’s AMG ruling in 2021.

The Success by Health bench trial kicked off earlier this year, spanning January 25th to February 8th.

The court’s
May 11th order
comes in at one hundred and thirty-one pages. I’ve gone through it and grouped the important points below under various headers.

Witnesses

During the trial each side presented its case. The court noted that while it found the FTC’s witnesses “credible and persuasive”, Success by Health’s witnesses were “a mixed bag in terms of credibility”.

During the bench trial Success by Health presented affiliate, employee/affiliate and defendant witnesses.

As noted by the court, here are some of the credibility issues with Success by Health’s affiliate witnesses.

The Court was not persuaded by one witness’s contention that SBH’s nutraceutical products literally caused his cranial plates to shift back into place 36 hours after he began taking those products.

One affiliate witness denied ever telling consumers that joining SBH would help them earn over $100,000, only to be confronted with a Facebook post where he made that representation.

This witness then denied ever offering cash bonuses to affiliates for recruiting someone into SBH to buy an accelerator pack, only to be confronted with a Facebook post where he made that representation.

This witness then denied ever making the representation that “SBH is delivering people every day to financial freedom,” only to be confronted with a Facebook post where he made that representation.

Similarly, another affiliate witness initially testified that retail sales were “kind of the backbone of everything [SBH] did” and “the backbone of the industry really, but especially the company” and denied that Noland had ever suggested that recruitment commissions (rather than retail sales) were the backbone of the company.

During cross-examination, however, the FTC played a video in which this witness was shown telling affiliates that, according to Noland, a particular recruitment commission was the heart and soul and backbone of the company.

This witness also testified, during his direct examination, that he never bought products just to achieve or maintain a certain rank within SBH.

However, during cross-examination, this witness was confronted with a depressing text-message exchange in which he reached out in a panic to Sacca on the last day of the month because “the bank declined [his] SBH auto-order for insufficient funds” and he was fearful he would lose his SBH rank if he did not place a qualifying order by the end of the month.

The court also gave weight to Success by Health’s affiliate witnesses contributing to its legal defen

🤖 Quick Answer

What was the outcome of the FTC case against Success by Health?
An Arizona court ruled that Success by Health operated as a pyramid scheme, ruling in favor of the FTC. This decision represents the first significant MLM-related victory for the FTC following the Supreme Court's AMG ruling in 2021. The bench trial occurred from January to February, with the court's comprehensive 131-page order issued on May 11th.

Why is this FTC victory considered significant in MLM litigation?
This case marks the first major MLM-related win for the Federal Trade Commission since the 2021 Supreme Court AMG decision. The ruling establishes important precedent in pyramid scheme enforcement and demonstrates the FTC's ability to successfully challenge multi-level marketing operations through federal court proceedings and comprehensive evidence evaluation.

How did the court assess the credibility of evidence presented during the trial?
The court found the FTC's witnesses

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