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The Latest Barry Minkow USANA Attack

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AN DIEGO/EWORLDWIRE/May 22, 2007
— When Brian Mohr, owner of Nutrimart Nutrition – a retail vitamin
store in San Diego, California – first received a letter from Usana
Health Sciences Inc. (NASDAQ: USNA) demanding that he contact Barry
Minkow, co-founder of the Fraud Discovery Institute (FDI), and
immediately insist that Minkow remove the YouTube video which compared
the prices of Nutrimart’s products to the Usana Health Pak 100 (TM), he
was shocked. "Usana told me that my employee misrepresented to the
public that the daily vitamin packs that we sell for substantially less
than Usana’s products were really not comparable at all because our
products, although less expensive, were inferior," said Mohr.

"The
only one guilty of misrepresentation is Usana," said Manfred Kroger,
Professor Emeritus of Food Science at Pennsylvania State University and
current Associate Editor for the Journal of Food Science and the
Scientific Editor for Comprehensive Reviews in Food Science and Food
Safety. Professor Kroger was brought in by FDI to examine the products
compared in the original YouTube video, and his findings, now posted on
the FDI Web site (‘http://www.frauddiscovery.net’),
indicate that "neither Nutrimart nor Mr. Minkow should be accused of
misrepresentation, but Usana should be when it attempts to justify the
substantially higher price and superiority of their products through
pseudoscience and innuendo appealing to some scientific criteria which
do not exist."

However, the Usana intimidation had only just
begun as Mohr went on to explain in the video. "After receiving the
threat letter from Usana and calling the company, its in-house counsel
called me back and left a voicemail message (also now available in the
FDI Web site) stating that the company had changed its mind about its
approach, and rather than me going to Minkow demanding that the YouTube
video containing the price comparisons be taken down, Usana instead
asked me to sign a letter prepared by the company stating that my
employee was manipulated by Minkow into the price comparison, because
Minkow supposedly did not disclose the context in which the video would
be used. Usana is going to be really surprised to learn from this new
YouTube video that I was the employee and the person in the original
video," said Mohr.

"Desperate people and desperate companies do
desperate things," said Minkow. "For a publicly traded company to lie
and bully a local retail store for doing nothing more than being proud
both of the quality and the value of the products it sells is simply
deplorable."

Also on the newly released YouTube is San Diego
air traffic controller Doug Boelter who, only two days earlier had
attended the Usana "Super Saturday" opportunity meeting held at the
DoubleTree Hotel in San Diego, where medical advisory board member Dr.
Ladd McNamara explicitly stated that the 75 percent savings presented
on the company Web site and in the opportunity meetings was savings off
the cost of the products – Usana’s founder, Dr. Wentz, chose the multi
level marketing approach for his products over traditional retailing;
in traditional retailing the price of the product would be prohibitive
because of the costs associated with that method which would in turn
force Usana to cut back on quality, which Dr. Wentz refused to do.

Instead,
and according to Boelter’s account of the explanation, multi level
marketing reduces by 75 percent the cost of the product, by eliminating
the typical national distributor, wholesaler, and other middle men.
According to Boelter, who is preparing an affidavit to the SEC stating
what he and his wife heard first-hand at the meeting, this will once
and for all settle the Usana diversion and ambiguity surrounding the 75
percent savings which the company represents to potential distributors
is off of the cost of the products.

In the original FDI report,
the contention was that this 75 percent savings was evidence of an
untenable business model. "Despite arguments to the contrary that Usana
never meant that this alleged 75 percent savings was savings realized
off of the product price, the evidence is conclusive that this is
exactly what they say and what we represented in our original report,"
said Minkow. "The reality, however, is much worse because the 75
percent is neither saved off of the hopelessly overpriced product – as
evidenced by Professor Kroger – nor is it seen in compensation to the
thousands of Usana distributors who never earn a dime in from their
Usana distributorships."

 

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CONTACT:

J Barry Minkow
FDI
9919 Carroll Center Road
San Diego, CA 92126
PHONE. 619-992-7729
FAX. 858-547-6359
http://frauddiscovery.net

SOURCE: Fraud Discovery Institute

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