A U.S. district court in Utah has frozen the assets of several Internet business coaches accused of lying to customers about their potential earnings after signing up for the services, the Federal Trade Commission said on Monday.
The companies are Essent Media LLC, Net Training LLC, YES International, Coaching Department, and Apply Knowledge, the FTC said in a statement. The commission, which voted 4-0 to sue the Utah-based defendants, filed a lawsuit against them this month.
"This case halts a massive scam that bilked consumers out of millions for useless work-at-home kits and business coaching services," said Jessica Rich, director of the FTC's Bureau of Consumer Protection. "The defendants duped consumers into thinking they could earn thousands working from home."
Jonathan Hafen, the lead attorney for the defendants, had no comment on Monday.
The commission said the companies lured customers by offering a "proven and guaranteed home job to make $379 a day from home." But consumers earned little or no money and ended up heavily in debt, the FTC said.
The legal action came days before a deadline for the FTC and the Securities and Exchange Commission to respond to a request for an investigation on Herbalife by U.S. Senator Edward Markey, a Massachusetts Democrat.
The nutrition and weight loss company faces accusations from several of Markey's constituents, some civil rights groups and billionaire investor William Ackman that some Herbalife distributors promised business coaching to get rich quickly.
Herbalife has said it told distributors that their results depend on time, energy and dedication.
The two regulators have until the end of the month to respond to Markey's request.
(Reporting by Svea Herbst-Bayliss in Boston; Editing by Amanda Kwan)