Video of former A. G. Mark Shurtleff to be used against company
It was 2009, and there was Mark Shurtleff, touting his forthcoming book about Dred Scott, praising the healing powers of a Lehi company's products and lauding the multilevel-marketing model.
"That's a great business model, and I support it 100 percent," Utah's then-attorney general told a Green Tea Co. gathering at Salt Lake City's Alta Club.
"You have to have a really good product, that's key to me in law enforcement, and you do, you've proven that," added Shurtleff, crediting Green Tea products with helping him focus his writing while recovering from leg surgery after a nasty motorcycle crash. "I'm convinced it helped me be more lucid."
Now, more than three years later, a YouTube video of Shurtleff's speech will be used as evidence at a Tuesday hearing in which state regulators will argue that the company broke Utah laws.
It's the latest case in which Shurtleff Â whether through speeches or campaign donations associated with a company that later came under scrutiny from regulators.
Green Tea and its affiliated companies owned and operated by Roger Hendrix Sr. and son Roger Jr. sell 36 flavors of green tea that they say promote health, beauty and fitness. The company website, greenteahp.com, includes testimonials about weight loss "I'm so excited! I've lost 80 pounds" and help with arthritis and lack of energy.
Emails to a company attorney and a call to Green Tea's Lehi headquarters were not returned.
The company offers several types of business opportunities. People can sell the products through kiosks at malls or recruit others to do so. Green Tea promotes its management and consultants as experienced in multilevel marketing (MLM).
MLM operations sell products to independent distributors, who then peddle them to consumers. Typically, though, such companies try to attract new distributors with yarns of sometimes-fabulous commissions to be had by recruiting other distributors. That aspect is controversial because many of the companies' disclosures show few ever earn much income and only a tiny percentage get rich.
Shurtleff appeared before the Green Tea meeting in late 2009 to discuss his historical novel, Am I Not a Man? The Dred Scott Story, due to be released later that year. At the time, he was mustering support for a potential bid against then-U.S. Sen. Bob Bennett.
The state's top cop also took the opportunity to praise MLM companies for giving chances to those with little education or experience to build their own businesses a line such companies use in their promotions.
"If you do it right, you can be wildly successful," he told the group. "That's what makes America great."
Shurtleff, now in private practice, said in a text message he was speaking in general about multilevel marketing.
"I do NOT tout Green Tea's specific business model," he wrote, "rather MLMs in general (if they follow rules, have a solid product and people do it right)."
Even so, the Utah Division of Consumer Protection plans to use the Shurtleff video Tuesday after investigators cited Green Tea for allegedly violating Utah business-opportunity laws.
"Last spring we received numerous complaints," said Utah Department of Commerce spokeswoman Jennifer Bolton, "so we opened an investigation, which has led to the action and now a hearing."
According to the administrative citation obtained though an open-records request Green Tea has entered into at least 83 agreements to enable people to start businesses that sell its products through, say, mall kiosks, carts or booths.
While the dealer agreements say Green Tea is not selling a franchise, the citation alleges that the company is providing services that make it a franchise operation as defined by Utah and federal laws. Under the Utah Business Opportunity Disclosure Act, the company must either register with the state or file for an exemption, neither of which it has done, the citation says.
The act also requires that a franchise seller comply with Federal Trade Commission regulations. According to the citation, Green Tea told its retailers that, for an initial investment of about $22,000, they could expect a profit of about $64,000 within six months.
Green Tea, which faces a possible fine of $207,500, allegedly provided no proof of those numbers, as required by federal law.
Twitter: @TomHarveySltrib Also known as â¦
Other names under which Green Tea Co. LLC of Lehi also does business:
• Green Tea Stand
• Green Tea Store
• GrÃ«nX Operators LLC
• Green Tea Company Consulting
• GrÃ«nX Company USA LLC Shurtleff business ties
Then-Utah Attorney General Mark Shurtleff's business ties have come under scrutiny:
Protection for cash? • Three Utah businessmen, speaking anonymously, recently said they were approached by John Swallow the current Utah attorney general and formerly a top Shurtleff aide and fundraiser with the suggestion that campaign contributions would buy them some level of protection in the Attorney General's Office. All three were in direct sales also known as multilevel marketing or Internet sales businesses.
Fraud claim • The Tax Club and associated businesses had kicked in more than $165,000 in political donations to Shurtleff since 2008 but was shut down by the Federal Trade Commission last month and accused of defrauding consumers.
Johnson case • Shurtleff was a friend of Jeremy Johnson, who, along with affiliated business interests, partners and family members, contributed more than $230,000 to Shurtleff from 2008 to 2010, when the FTC sued Johnson's I Works Inc., accusing it of improper marketing and making unauthorized charges on credit and debit cards. Johnson also faces a federal felony charge, and a new indictment is expected this week.
FTC allegations • In September, Google Money Tree which is not affiliated with the search engine agreed to return $2 million to customers after the FTC alleged it had made unauthorized charges to customers' credit cards. The company behind the alleged scam had given $30,000 to Shurtleff's campaign.
"Get-rich-quick" scheme • A month earlier, a federal judge had issued a $478 million judgment against a group of companies, including Mentoring of America, that had marketed a fraudulent "get-rich-quick" scheme. Mentoring of America had given $30,000 to Shurtleff as well.