Alex Morton can still remember the day when he decided that academics weren’t for him. He was a freshman at Arizona State University, sitting in biology class, when it clicked. “My professor starts talking about biomes,” he says. “I’m like, ‘My major is communications, and this guy wants me to memorize all the animals in the rainforest? I gotta go.'”
Morton is recalling this catalyzing moment while in the front passenger seat of a white Mercedes sedan speeding down an Arizona highway. To his left sits his unofficial bodyguard and driver, Joe Smith, whom everyone knows by the nickname “Sloppy.” Behind him sits Claudia Chiarelli, Morton’s girlfriend, a 20-year-old aspiring dental hygienist from a Chicago suburb, currently in the midst of an existential crisis caused by Instagram. “OK, seriously, picking a filter is a struggle,” she says.
She is uploading pictures from the previous night, a boozy affair that ended at 6 a.m., after Morton had signed for a $600 bar tab and Sloppy had slept on the stairs of his own house. “I’m so done with clubs,” says Morton, wearing sunglasses on a cloudy late-spring day.
Sometimes referred to online as “King Douche,” Morton is a few months shy of his 25th birthday, has expertly manicured eyebrows and is handsome in the same way that people on TV are handsome: smaller than you expect in real life and with a head just slightly larger than normal. Despite the fact that he walked out of biology class that day, Morton (who did eventually graduate) has claimed to be a millionaire, and the spoils of his recent success are evident wherever you look. The watch on his wrist is a diamond-studded Rolex; his belt and shoes are Louis Vuitton. To discover what’s afforded him these indulgences, one only needs to look at the body panel on the luxury car he’s riding in, which is outfitted with a decal that says VEMMA.
Morton is the public face of one of the fastest-growing multilevel-marketing companies in the country. His title is “Royal Ambassador,” and only nine other people in the company make more than him. “This is like hearing about Facebook when Mark Zuckerberg was still in his dorm room at Harvard,” Morton says.
To Morton and founder BK Boreyko, Vemma isn’t just the quickest route to financial freedom, it’s also a savior for a lost generation of millennials in the aftermath of the Great Recession. Though it is merely the latest hot commodity in the most controversial corner of American business, to them it’s not just an alternative to corporate America but the answer to it – a certainty that produces as a side effect an almost religious zeal; salesmanship as performance art, played out on any number of social-media platforms. A decade ago, Boreyko, an entrepreneur and son of an Amway salesman, started Vemma after his previous company, the diet supplement supplier New Vision International, ran afoul of the Federal Trade Commission because it claimed a regimen of its pills, collectively known as “God’s Recipe,” could cure children of attention-deficit disorder. From the ashes of New Vision rose Vemma, which sells energy drinks and weight-loss shakes, and which was just another company before Morton and scores of other millennials came along.
Vemma is the latest mutation of an American invention. Multilevel marketing began in the middle of the past century with one company, a predecessor of Amway. The idea was simple: Instead of just selling a product, you could recruit people to sell it, too. Then, when they made a sale, you both shared in the profit. Recruiting soon became a lot more profitable than merely selling, a shift in incentives that produced a first in American consumerism: Suddenly the pitch was more important than the product. In some cases it wasn’t necessary to even have a product. For some 50 years, lawmakers, consumer advocates and lobbying groups have argued over whether this unique setup constitutes a legitimate business or something more sinister, like an illegal pyramid scheme.
Today, there are an estimated 600 to 800 multilevel-marketing (MLM) companies in America alone, with roughly 15 million distributors, $150 billion in annual revenue and the political clout that comes with all that cash. The DeVos family, co-founders of Amway, are influential backers of conservative causes; former Secretary of State Madeleine Albright’s consultancy has made a reported $10 million working for Herbalife; and various politicians with deep ties to Utah, from Jon Huntsman to Mitt Romney, have lobbied publicly for multilevel-marketing companies, in keeping with the acronym’s most common bastardization: Mormons Losing Money. What sets Vemma apart, however, is that it has found success where others have failed by attracting younger people like Morton. And his pitch offers a clue as to how it has succeeded.
Sloppy pulls the Benz into a run-down neighborhood in the shadow of a Tucson-area Air Force base. “This is a, how should we say, more diverse crowd than the one we normally talk to,” Sloppy says. The street is packed with cars, and the front yard of the modest ranch house where today’s “home event” is taking place is crowded with a mix of mostly young black and Latino men eating barbecue off plastic plates.
The home event is the backbone of Morton’s business. Technically, he lives in Las Vegas with his parents, who he says made a fortune selling life insurance, but really he spends most of his time on the road. Last month he was gone for 27 days on a trip that saw him visit half a dozen European countries. When he made his inaugural trip to Colombia, to initiate Vemma’s push into South America, a ticket agent in Bogotá recognized him from his sales videos. “A high school teacher and a college professor can’t teach you how to make money,” says Morton to his audience in his signature rapid-fire patter. “You can’t teach what you don’t know.” Morton’s pitch is built around the idea that college, and the debt that comes with it, isn’t worth the risk. It’s landed him some 13,000 recruits, many of them around his age, whose every sale earns him a cut. “What’s another synonym for ‘employee’?” he asks the crowd. A young woman in the audience gives the answer – “slave” – at the exact moment that Morton says it. Then she lets out a self-congratulatory “whoo!” as if she were the only one at the concert to recognize the first few bars of the band’s deepest cut. “We’re living in the worst economy since the Great Depression,” says Morton, wrapping it up. “We need to find a new model. This is that new model.”
In the beginning, BK Boreyko didn’t set out to find anything new. Nine years ago, after New Vision was dissolved, the avuncular father of six turned an old idea into his next company. Whereas before he sold vitamins, now he decided instead to try to sell a beverage, called Vemma, that already had them. Vitamins you can drink! Then one day, spurred by what he saw as a glut of unhealthy energy drinks flooding the market, Boreyko put those same ingredients into something he called Verve, a highly caffeinated product like Red Bull, but, in his mind, just as healthy as his flagship drink. What came next he didn’t expect, but maybe should have: Kids who liked the energy drink but had never given multilevel marketing a second thought started buying Verve and reconsidering. Kids like Morton. “Alex and one of his mentors are really the ones who started this whole YPR movement,” says Boreyko.
YPR stands for “Young People Revolution” or “Young Professional Revolution,” and it’s part of the reason Vemma has attracted an inordinate amount of attention. YPR is the easily hashtagable acronym Vemma uses to describe the tidal wave of young recruits coming into the company, in part thanks to Morton. Today, Vemma claims to have roughly 350,000 distributors and customers, many Morton’s age or younger. Last year, the dean of a business school sent a letter to administrators at more than a dozen other colleges warning them about what he saw as a possible pyramid scheme aimed directly at impressionable undergrads. “I learned that Vemma is looking for MLM distributors among students,” he wrote in an e-mail accompanying the letter. “I have no doubt that this is happening all over the country.”
The dean was right. Back in Sloppy’s car, on his way to a McMansion in a Phoenix suburb filled with another hundred waiting kids, at least one as young as 15, Morton is trying to think of a way to get himself and his 50,000 Facebook followers excited. “I should pay someone to do this for me,” he says, while scrolling past a friend request from someone in Indonesia. Morton settles on a hype video, which has clearly defined criteria: 40 seconds of atmospherics – usually a shot of an open road with music playing in the background – and then a minute or two of frenzied talk, in this case about the upcoming annual convention in Las Vegas. “Y-y-y-y-y-y-yooooooo! Vemma world, YPR world, wassup, baby!” he says, his phone held a foot in front of his face. “Twenty-five days till convention, man. Twenty-five days to make the rest of your life the best of your life. . . . We’re gonna make so much money. We’re gonna go down in history as the kids that saved the entire generation, guys. It’s time to be proud. It’s time to step up, baby! And let’s go all the way.”
Along with the 250,000 frequent-flier miles he racked up last year, staring into a camera and acting excited has been one of the keys to Morton’s success. After leaving Arizona State, he worked in real estate for a year before being introduced to Vemma when he was 21. Just a year later he was preaching the gospel onstage in a YouTube video that’s now been viewed almost a half-million times. “Salaried jobs should be illegal, dude,” he says in the clip. “You’re God’s highest form of creation. Why on Earth would you let somebody else tell you when to show up to work, when to eat lunch, when to pee, when to go home?” That contempt for traditional careers has meant a very lucrative one for Morton, though how lucrative depends on who you ask. Vemma insists Morton is not a millionaire. Morton’s own website, not to mention just about every one of his speeches, insists that he is. What’s not in dispute is his willingness to offer a near constant stream of encouraging words, both online and off. At the end of a very long Sunday, after talking in front of more than 200 people at two different home events, to dozens of others on Skype calls, and exchanging an unknown number of text messages, Morton takes out his phone to tap out one last note on his Facebook page before going to sleep, which he’ll do while listening to audio of his favorite motivational speakers. “You beat 40,000,000 sperm to be alive therefore you’re a CHAMPION,” he types. “Start acting like a CHAMPION. Act like you DESERVE to WIN. The universe doesn’t give you what you want, the universe gives you what you DEMAND. #YoungPeopleRevolution.”
Roughly a month later, in a suite on the 25th floor of the Mirage, overlooking the Las Vegas Strip, Morton takes a sip of Vemma’s newest energy drink. He scrunches up his face. “Tastes too much like pineapple,” he says. As it’s grown, the company has expanded its line of products, including a hair-and-nail tonic introduced just a couple of weeks earlier at a press event in New York City headlined by Jenny McCarthy. The former View co-host is but one of a handful of celebrities tied to Vemma. Dr. Mehmet Oz, recently called to Congress to be questioned for promoting “miracle” weight-loss products, has featured cans of Verve on his show and lists the drink among recommended fatigue fighters on his website. (Boreyko says Vemma has donated nearly $1.1 million to a charity founded by Oz.) Perpetually chipper weight-loss reality-TV-show hosts Chris and Heidi Powell are paid spokespeople, as are the NBA’s Phoenix Suns, who get $450,000 a year for the privilege of calling Verve the team’s “official energy drink.”
Morton sits at the Vemma suite’s dining–room table with two of his cousins, Brock and Case, who are also distributors of the energy drink. So is Morton’s only sibling, his sister (women in Vemma are often referred to as “ladybosses”), along with his mother and father. This family-oriented focus is seen as a benefit of multilevel marketing within the industry, and a detriment to those outside it. When G. Robert Blakey, the principal draftsman of the RICO statutes used to prosecute mob members, was hired to study Amway’s business by a group suing the company, he wrote that it “is run in a manner that is parallel to that of major organized-crime groups, in particular the Mafia.”
Morton’s girlfriend, Chiarelli (with whom he will soon part ways), is also in Vemma, but she’s in the room only briefly before a new crisis arises. “Oh, no!” she says. “The piercing in my bellybutton just closed.” While she runs to the bathroom, Morton and his cousins begin spitballing the upcoming talks they’re going to give at the convention. Tonight is YPR night, and Morton is a keynote speaker. He sent a shock through the social media accounts of Vemma’s young, self-professed entrepreneurs a few weeks ago by posting a clip from The Wolf of Wall Street on Instagram as a way of announcing that the infamous stock swindler Jordan Belfort was going to speak at the convention. Belfort is a folk hero for some within Vemma. “I’ve seen that movie more times than I can count,” says Morton. Unfortunately, the rumor wasn’t true.
Despite openly admiring a convicted felon – who in Morton’s eyes is merely a great salesman – the YPRers feel they get treated unfairly by the press. “I’ll give you an analogy,” says Bryce Majdick, a blond former frat boy from San Diego State University and one of YPR’s leading spokesmen. “You’re on the highway and everyone’s rubbernecking, looking at an accident, but missing the beautiful sunset behind it. A lot of the attention on Vemma gets drawn to negative aspects of what we do. If you look at anyone who’s great – Gandhi, Jesus, whoever – there’s insecurity. People are afraid of them. We’re shifting our generation’s mindset away from partying, smoking weed seven days a week, to doing something more with their lives.”
Yet according to Vemma’s own federal income disclosures, that “unfair” coverage has more to do with the reality on the ground than any squeamishness with a new generational mindset. More than 97 percent of the people who sign up for Vemma never advance past the rank of Diamond, which means that 97 percent average less income than someone who works 40 hours a week at a minimum-wage job, without even accounting for expenses. Sloppy is a member of that fortunate three percent. But he’s also Exhibit A for why there’s so much distrust of the income claims made by multilevel marketers. Sloppy says he spent every last cent he made last year on travel and the costs of “helping my team.” That doesn’t include the multiple surgeries he had to pay for when he broke his ankle. (Vemma, as is typical of multilevel marketers, does not offer health insurance to its distributors.) Morton’s rank alone should make him almost a millionaire, a dollar figure he never fails to share in his pitches. But this weekend’s trip to Las Vegas has already cost him a small fortune. “I’ve spent probably $40,000 on hotel rooms and flights for my team,” he says. And in the smoke-and-mirrors world of multilevel-marketing incomes, “millionaire” means something different to everyone. “Some people say they’re millionaires just because they’ve made seven figures over the course of their lifetimes,” says one Vemma member who’s critical of YPR’s boasting. “They don’t even take into account the fact that they spent that much or more. It’s all bullshit.”
That tendency toward extreme exaggeration is why an anonymous figure named YPRPariah first started blogging in the spring of last year. Pariah’s identity is a hotly debated mystery to those within Vemma. “I think he’s a girl,” says Chiarelli. “I think he’s Canadian,” says Sloppy. But in a couple of anony-mous Gchat conversations, Pariah insists he is neither. He first encountered Vemma on the campus of the Midwestern university he attended after a friend of a friend invited him to a dorm room and played a video featuring Morton. Impressed by Morton’s claims of wealth, he signed up online, paying $560 in order to get a variety pack of products. The drinks were fine, he says, and persuading others to buy the product was easy. “I pretty much got my first 200 people in a hurry,” he says. His network began with a few friends on campus before branching out among several states. Some months he made $800, minus the $160 he spent constantly reupping products. It wasn’t bad money for a full-time college student, but he had reservations. Some of the people he signed up were unable to make money. Pariah shared his problem with a fellow Vemma distributor over lunch, someone more successful than him, and that’s when he heard the line that persuaded him not only to quit but to become the company’s most outspoken critic: “People have to fail for us to make a profit,” he says his friend told him.
That line cuts to the heart of the multilevel-marketing industry. Robert FitzPatrick, the crusading owner and operator of PyramidSchemeAlert.org, says that who the companies target and what they sell may change – the derisive catch-all for the industry is “potions and lotions” – but the underlying structure never does. “Vemma’s ingenious lures for young people are nothing more than a natural adaptation of multilevel marketing to the student market,” he writes. “MLM’s focus on young people is not special or more significant than its attacks on blue-collar (Amway), Latinos (Herbalife), African-Americans (Pre-Paid Legal, ACN), women (Mary Kay, Avon, Arbonne, etc.) and many others.” What really matters, say FitzPatrick and critics like him, is the fact that Vemma’s own disclosures prove that the claims made over and over again by distributors like Morton can’t actually be true. Not everyone can “retire their parents,” a goal Morton preaches constantly in his talks. What Pariah’s friend told him that day was a distillation of a fact that has been known for years, says FitzPatrick, but seems to be forgotten each time a new company appears on the scene: When a small number make money, many, many more lose.
Pariah became an unexpected resource for exasperated parents who’ve watched their kids become swept up in Vemma, and for the kids themselves. Payton Carlucci was a tall, shy freshman at Pennsylvania’s Grove City College when a friend introduced him to the company. What came next followed a pattern that would be familiar to many who have been exposed to Vemma.
Carlucci was first teased with a vague idea. “My buddy said, ‘I wanna tell you about this opportunity that’s bigger than ourselves,’ but he didn’t actually tell us what the name was.” Morton and his fellow acolytes preach that no new prospect should ever be told too much too fast, a strategy meant to avoid what the organization has called “Vemma vomit”: the attempt to explain what the company does in one sitting. The first goal is to get a target like Carlucci to come to a meeting, without actually calling it a meeting. To do that, Morton says, “always be in a hurry.” He adds, “Your friends and family are going to tell you it’s a scheme, it’s a scam, these things don’t work.” Avoid telling them what the meeting is about, and you avoid having that conversation too early, before you’re properly equipped with a counterargument.
Carlucci heard enough to be intrigued by the pitch. So the following evening, he and three friends he’d invited went to an off-campus apartment, watched a presentation and joined. His sudden success – three recruits in 24 hours! – impressed Vemma so much that within a couple of days of signing up he was given the ultimate reward: a Skype call with Morton.
“I heard about you out in Pittsburgh,” Carlucci says Morton told him. “You’re exactly the kind of leadership we need.”
Carlucci was encouraged to make a list of everyone he knew. Each and every one of them would become a potential recruit. He went to local home events, where other leaders singled him out in the crowd. “They would point me out and say, ‘This kid is on the path to making big money,’ ” says Carlucci. “Which felt great, but then I would think, ‘I haven’t even made $5 yet. This is all just a lie.’ ”
Carlucci would give out free drinks on campus in an attempt to get people to come to meetings. He constantly texted – he now says harassed – people he barely knew, in an effort to get them to join. As it became apparent that he wasn’t replicating his early success, the encouragement he’d received from his Vemma friends soured into something else. “You suck at this,” was a message he received more than once.
All the while, Carlucci had been advised to avoid telling his parents what he had been up to. But he couldn’t hide it forever. After five months, Carlucci was flat broke. In total, he was out $1,500, or everything he had. That was bad. What was worse was what had happened to his reputation on campus.
“I had become extremely cocky,” he says. He had also spent months treating potential friends as potential prospects, which meant that even though he was now out of Vemma, his calls and texts still weren’t getting returned. “Losing money was the easy part,” he says. “It may take a lifetime to win those friends back.”
In some ways, Carlucci is lucky to have run out of money. Quitting is seen by Morton and others in Vemma as the ultimate failure. Yet for families torn apart by a son or daughter’s insistence on sticking with the company, it also seems like the only possible solution. Diane’s son underwent a similar transformation while away at school. Diane, who requested a pseudonym for fear of alienating her child, says she’s tentatively hopeful that after her son spent $9,000 chasing the Vemma dream, he may have finally realized that pitching friends, trash-talking school and blowing through a savings account may not be the right way to spend his final year as a teenager. But she also doesn’t think that it will occur to him that it wasn’t his fault. “That’s the genius of these companies,” she says. “They convince these kids that if they fail, it’s because they didn’t try hard enough.” A decade ago, the Federal Trade Commission discovered much the same thing when it found that victims of multilevel marketing were the least likely to complain to authorities. “When he went off to college,” says Diane, “we made sure to warn him about drinking, drugs, disease, all those sorts of things. We didn’t think to warn him about this. I wasn’t talking to my son anymore. It was as if I was talking to someone in a cult.”
Because it has such a strong foothold on college campuses, Vemma has also become a test case for some professors. Kim Clark, a lecturer in the University of New Hampshire’s economics department, says her students began studying Vemma after a few “muscly, frat-boy guys” started pitching it on campus. That’s when she discovered that the lease of the fancy BMW a Vemma student distributor was driving was put in the student’s own name, and “if you don’t hit your sales goals, then you get stuck with the bill,” she said.
The parody Twitter account @YPR-broYPR, run by five or six anonymous college students, is more proactive in its anti-Vemma advocacy. Every seven days, it nominates a “Vemma Douchebag of the Week,” someone who the feed’s operators think best embodies all the worst qualities they’ve come to associate with the company. Its members have also attempted to classify the ways in which their fellow college students change once they join the company. “The stereotypical Vemma Douche can be recognized by the following characteristics,” one of the account’s owners writes. “Brags about wealth . . . refers to those who won’t join as ‘broke-minded haters,’ ‘slaves or peasants’ . . . wears bro tanks, fake jewelry and hair gel (optional) . . . constantly posts inspirational quotes implying that they have somehow become enlightened . . . constantly bothers friends after they were told no the first time.”
In response to this wave of criticism, Vemma affiliates have started an online counteroffensive. Some have created websites in an attempt to ensure that a simple Google search, often the first line of defense for worried parents or skeptical college students, returns more positive results. They’ve also managed to silence their biggest critic. In late August, the entirety of YPRPariah’s website was scrubbed save for a single message that suggested he had either been spooked by a cease-and-desist letter from the company, received a settlement or something in between. “The blog you are looking for has ceased publication,” wrote the “Vemma Home Office” on his site. “Any disputes or misunderstandings between the publishers or authors of this blog and Vemma Nutrition Company have been resolved to the satisfaction of all involved.”
At the table with his cousins and Chiarelli, who’s back from the bathroom with the piercing in her belly-button fixed, Morton asks a question: “Did you see what the president of Amway said the other day?” Everyone shakes their heads no. “He said, ‘Right now is the scariest time ever to be in our business.’ People in my hometown think I’m Bernie Madoff.”
Morton is referring to the fact that in March, the Federal Trade Commission began an investigation into Herbalife, the world’s third-largest multilevel-marketing company. Herba-life is the regulator’s biggest target since a case was brought against Amway nearly 40 years ago. “People wonder how Amway and Herbalife can be in business for 30 years,” says one agency lifer. “There’s one answer: The FTC hasn’t done its fucking job.” The inquiry comes on the heels of a $1 billion bet against Herbalife stock made by Bill Ackman, a celebrity in the finance world who runs the hedge fund Pershing Square Capital Management, and whose three-hour presentation railing against Herbalife shook the industry. “This is the best managed pyramid scheme in the history of the world,” Ackman said of the company.
Herbalife’s loss has been Vemma’s gain. Last January, one of Herbalife’s most notorious distributors encouraged 16,000 of his followers to come with him to Vemma, a switch Boreyko welcomed despite the fact that the distributor had been named in a class-action lawsuit alleging predatory sales practices that Herbalife, while admitting no fault, settled for $6 million. The response from Vemma to Herbalife’s troubles has been a semantic shift. This year, Boreyko announced that his company would no longer be known as a multilevel marketer, but as an affiliate marketer instead. “We want to be more like Amazon and less like Amway,” he says. “We want to stay off the regulators’ radar, because they’re the guys with guns.”
Part of the difficulty with staying out of the FTC’s cross hairs is that the multilevel-marketing arena harbors companies that some consider even more controversial than Vemma. Tonight, Morton stands at the floor-to-ceiling windows overlooking the Strip, his jaw clenched, as he talks about one company in particular: Wake Up Now. It’s currently the biggest thorn in his side. Allegiances in multilevel mar-keting can change in an instant. And Vemma’s success at luring younger, more fickle, people into the business has led to an arms race of recruiting between companies. “If they’re your introduction to the business,” Morton says, pacing the suite, “then I understand why you think it’s a scheme.”
Later, downstairs in the main hall, Morton sits backstage, waiting his turn to give what will be the final speech of the weekend. Amid a legion of production people working silently on laptops to keep the spectacle moving, Morton watches as dozens of fellow YPRers, many of whom were inspired to join because of his example, climb the steps leading to the stage and transform from nervous kids to world-beaters, taking selfies with the thousands in attendance as a cheering backdrop.
Morton watches the speeches in near silence. He can tell what’s happening. And for the first time he seems willing to acknowledge that the performances onstage are just that. “See this kid?” he says, whispering and jutting his chin toward the big screen where a young bro pogos across the stage. “Last year, his business cratered.” The bro’s Instagram page is filled with aspirational shots of him wakeboarding and walking on the beach with half-naked girls. He describes himself as “Blessed. Retired Young. Living Free.” Here onstage, it looks as if he’s leading a life that would be the envy of any other millennial in the country. Yet, according to Morton, who knows more about Vemma’s internal workings than most in the room, the kid is actually not the superstar the klieg lights and pounding music make him out to be.
If the cognitive dissonance playing out in front of him bothers Morton, he doesn’t show it. And he may have good reason to ignore those kinds of glitches in the system. In a few months, it will be discovered that a now-shuttered website featured testimonials claiming that Vemma can do everything from cure Crohn’s disease to treat autism to, most remarkably, revive a nearly dead dog. It will be an unwelcome call back to the event that ended Boreyko’s last company and led to the creation of Vemma. But it won’t do anything to slow Vemma’s momentum.
His turn onstage nearly here, Morton stands up and puts on his suit jacket, as one friend after another walks by to offer words of support. “Game time, baby,” he says in response. With that, the boy who walked out of biology class strides out onto the stage. Ready to tell his story once more. Ready, finally, to perform.