Posted: Feb 27, 2012 2:52 PM
Updated: May 21, 2012 10:48 AM
WESLACO - Several people gathered in a room filled with high energy and charismatic speakers. The message had a cult following so passionate one might think they're sitting in a church.
The message was simple: "Change your coffee. Change your life."
Organo Gold brands itself as a "healthier coffee." In a packed house in Weslaco, representatives were recruiting others to sell the instant coffee.
The crowd was told about the magnificent opportunity being offered.
"Would you guys like to win seven times," one of the speakers asked the excited group.
The crowd of Spanish speakers was pulled in by the potential payout. A man identified as "Benjamin" explained, "You get two people to sell coffee. They get two people to sell coffee. You make money on all those people who sell coffee under you."
The pitch explained that someone could become a distributor and build a sales team. The business venture was amplified with a visual of a pyramid built of people.
"To go into it, as a distributor, you pay $500, close to $600," explained Janie Esparza.
She bought in to the pitch. She said the perks drew her in: big paychecks, bonuses and if she sold enough, entry into a Benz club.
Esparza told us she also believed in the ganoderma product, which comes from a mushroom. Pharmacists say it's been used as a strengthening supplement for thousands of years. Organo Gold claims the drinks are infused with ganoderma.
"Supposedly, it's good for your high blood pressure, cholesterol, asthma," said Esparza.
She was told the coffee would relieve her foot pain.
"I'm going to say maybe about 15 minutes later, I was having pain in my feet, because I have heel spurs. And my pain went away," she said.
She isn't the only one who felt results. Maria Luisa Gonzalez said she's been feeling much better. The 64-year-old spent more than $100 for two boxes of Organo Gold. She also stopped taking her doctor-prescribed medication.
Ganoderma isn't listed under the nutrition facts. It's unclear how much the signature ingredient is in a single serving, based on the labeling. The company also sells Organo Gold capsules.
Representatives we spoke to didn't know how much ganoderma was in either of the products or how much a person needs. The company's website doesn't mention it either.
CHANNEL 5 NEWS asked pharmacists at Knapp Medical Center. They say the recommended daily dose of ganoderma is 1,200 milligrams. We're told large and extended doses of ganoderma may increase the potential for harmful effects.
People with certain medical histories shouldn't take ganoderma. Pharmacists say it doesn't mix well with some medications, like aspirin. The supplement could trigger things like nausea, vomiting and an upset stomach.
Dr. Guillermo Ramirez of Knapp Medical Center said, "My recommendation is: Don't buy anything over the counter. Don't believe everything you hear. Consult with your doctor."
Esparza told us she was unaware of the risks. "Scary," she said.
Organo Gold representatives made no mention of the health warnings. They claim their products are helping people.
"We sell chocolate. The chocolate is incredibly popular with the children. It opens their mind, helps them focus and lowers their hyperactivity. We have autistic children, who today, are focusing better," said Ramon Ruiz, an Organo Gold representative.
Another representative, Blanca Prado, said, "If you drink this coffee, I mean, it's going to help you with your high blood pressure and sugar levels. Why? Because it adapts. It's an adaptator."
Prado says that information came from the company.
She added, "It's not necessarily the ganoderma that we're taking out to the public. It's the coffee. Change your coffee, because it's a healthy coffee."
CHANNEL 5 NEWS sent a registered dietician at UTPA nutrition facts for black coffee from Organo Gold, Starbucks, McDonald's and Folgers.
The dietician reported back on all four brands. The conclusion was "there is not enough information to determine the degree of healthiness."
One of the Organo Gold representatives said, "If you want more information, you can visit the FDA's web page. All of our information is on the FDA's website. We have four million testimonials on the Internet."
The Food and Drug Administration investigated Organo Gold's CEO in 2004. Bernardo T. Chua was president of another company. Gano Excel also sold ganoderma products. The FDA warned Chua then that his company was breaking the law by making medical claims that could not be verified.
"If there are claims that sound too good to be true, they likely are," said Dr. Daniel Fabricant, the FDA's Division Director for Dietary Supplements.
CHANNEL 5 NEWS told Dr. Fabricant the claims we captured on camera.
"If you are mis-branding the product, by making disease statements about it, yes, you could potentially be liable under the law for making such statements," he replied.
The FDA does not approve any dietary supplements before they go to market. The FDA also does not vouch for the safety or effectiveness of Organo Gold.
"We have certificates from the USDA. It's patented," said one of the company's representatives.
We learned the U.S. Department of Agriculture has an open case against Organo Gold, which is headquartered in Canada.
The USDA issued a civil penalty against the three-year-old company in 2010. The federal government wants Organo Gold to stop using its USDA organic seal.
Prado, one of the company's representatives at the packed meeting room, called the product miraculous.
"Our thing is not to sell it. It's like to let other people know what this product is," she said.
She claimed she didn't sell any of products. Pardo said she makes money by "introducing to the people, a healthy coffee."
Organo Gold is a multi-level marketing plan. Texas Attorney General Greg Abbott says some multi-level marketing plans are legitimate, if a person is paid only for the product sold.
It's illegal if payment is calculated on the number of distributors recruited.
Two people complained to the state about Organo Gold and its business practices.
Ruiz said, "This is not a pyramid scheme. This is a multi-level business. Everything is legal."
CHANNEL 5 NEWS called Organo Gold for answers. We were placed on hold for 20 minutes before our call suddenly ended.
We went to a second meeting for more information.
John Sachtouras was the keynote speaker at a gathering in McAllen. He's listed as one of the top sellers of Organo Gold.
People paid least seven dollars a piece to hear him speak. It was standing room only. CHANNEL 5 NEWS wasn't allowed to stay.
Two hours later, Sachtouras emerged with an entourage. He refused to talk on camera. He said he would give our phone number to someone with Organo Gold. No one called us.
Ruiz said, "The only thing we do is offer coffee to people with the hope that it relieves their ailments."
Maria Gonzalez was one of the people hoping for relief. We also met another, a man from Mission. He said he quit his job to sell the Organo Gold.
Six months in, he's still waiting to strike gold.
"I earn very little," he tells us.
He said he'll continue to sell the coffee and build his team.
But Janie Esparza has stopped selling it after hearing what pharmacists said about ganoderma.
"When I saw the side effects, I couldn't sell it," she said.
Now boxes of the coffee are tucked away in her car. With then is the motto Esparza once believed. "Change your coffee. Change your life."
The USDA and FDA are now taking a closer look as trouble for Organo Gold begins to brew.
Several products with ganoderma are on the market. Talk to your doctor about which is right for you.
Documents mentioned in the investigation:
Complaint filed with Texas Attorney's Office in April 2010
I was solicited on facebook to come to a business opportunity that was touuted as having the government of Chinas backing. This peaked my curiosity and went to the meeting. After the meeting I was handed a enrollment form and pressured to buy in to the program at the 1195 buy-in. After being presured and persuaded over the next 20 minutes, I signed up. There were alot of professionally dressed rather well groomed ladies standing around co-signing and edifying Mr. Craigs accomplishments in the business, his achievements etc. I buckled under and signed up. After leaving the event I knew something was amist and started doing research on the organization, the up lines high producers and Mr. Buggs, Mr. Chua, the supposed owner of the ganoderma factory in china, and others. I also took the time to inquire of other members as to how they were doing and if they were making money. 11 of the 12 people that I asked responded similiarily that they had sold very little coffee but were making money on signing up family members, friends, church members and the like. This immediately coupled with the fact that addresses and names on state and locally filed documentation dont
match. Also the tell-tell signs insulating layers of Organo Gold, the marketing arms, the focus on recruiting new members as opposed to selling product. Furthermore Mr. Bernie Chua has been issued a warning letter by the FDA for making outlandish claims that his supplement products "coincidentally" helps those with cancer, aids and other ailments and not labeling products appropriately. From the short time ive been involved Ive seen a substantial number of hopefuls lay down more often than not $499-1200 to join and then inspired to have them to tell their friends of the "great opportunity". If this pyramid scheme is not stopped by injunction alot of people will loose alot of money, receive nothing or very little and your office will be flooded with complaints for the months and years to come.
Complaint filed with Texas Attorney's Office in June 2009
You need to check out this company. Their corporate office is in Richmond BC Canda. The office is a ice cream shop. This company is saying they are doing $1 million a month in revenue and their top distributor is saying he makes $138K per month. I have documentation that the company only did $113k last month is total revenue...so how can he make $138. He is using this to recruit people. It is very easy for a company to fudge documents and checks for reps. They are misleading people by creating fake checks for their leaders. Holton Buggs is one of the biggest con artists in MLM. Most of their reps are from Texas(Houston). I've been in this indsutry for 12 yrs and Ive never seen such fraud and flat out lies to recruit people. You need to take care of this before alot of people in Texas and the US get burnt.