Debate

Did These Utah Multi-Level Marketing Companies Really Need Giant PPP Loans?

Utah multi-level marketing companies thrived during the pandemic, so why did they need PPP loans?

|


Utah multi-level marketing companies thrived during the pandemic, so why did they need PPP loans?

The following story was reported by The Utah Investigative Journalism Project in partnership with Utah Stories.

While many U.S. industries have gone under or struggled during the COVID-19 pandemic, many multilevel marketing businesses appear to be bounding through it without a scratch.

On May 26, 2021, the Direct Selling Association, representing predominantly multi-level marketers, proudly announced the industry not only survived the pandemic but profited handsomely through the global crisis with $40.1 billion in sales in 2020 — a 13.9% increase from the year prior.

“The results are clear,” the association press release announced. “A record breaking year and an unequivocal demonstration that direct selling is dedicated to serving America.”

Nevertheless, at least two prominent Utah multi-level marketing companies sought and received millions in government loans from the U.S. Paycheck Protection Program in early 2020.

When the Treasury Department began distributing $659 billion in PPP funds, the immediate goal was rapid relief, and so bureaucratic red tape was kept to a minimum. The program’s only major requirement was that the applicant check a box stating that “Current economic uncertainty makes this loan request necessary.”

Lehi-based Nature’s Sunshine Products, a publicly traded company distributing herbal supplements, received $5.3 million and ASEA Global, headquartered in Pleasant Grove, and also selling health supplements, landed a $5 million loan. 

Given the bonanza crowed about by the industry at large, critics are skeptical of MLM companies’ legitimate need of government loans. Nature’s Sunshine Products released its third quarter earnings on Nov. 4, announcing that compared to the same period in 2020, the company’s net sales increased 14% to a record $114.7 million. In the statement, CEO Terrence Moorehead proclaimed “we delivered the largest sales quarter in the 49-year history of the company.”

‘Our Strong Balance Sheet’

When asked about seeking the loan, a spokesperson for Nature’s Sunshine Products referred to a statement from the company’s filings with the Securities and Exchange Commission.

“We applied to receive the Loan based on, among other considerations, the significant economic uncertainty facing the Company and its supply chain worldwide as a result of COVID-19. On December 28, 2020 we repaid the outstanding principal and interest amounts of Loan.”

While the company repaid the loan, the spokesperson did not specifically address why the company sought the loan when it had significant liquid assets — $53.6 million in cash and cash equivalent assets — on hand at the end of 2019.

While numerous industries are now struggling to deal with the pandemic’s impact on the global supply chain, Nature’s Sunshine’s CEO brags about its moves to avert similar problems. “We used our strong balance sheet to increase product availability and leveraged our in-house production capabilities to be more agile to customers’ needs,” Moorehead said in the company’s recent news release.

ASEA Global, is a private company and as such is not required to disclose company sales and growth metrics. The company also did not respond to multiple requests for comment for this story.

While ASEA would not explain why its $5 million loan was necessary, public records show the company appears to have come out of 2020 with enough funding to not only keep the lights on but to move forward with a major expansion to its Utah County facilities.

State construction records showed the company contracted for roofing work at the end of 2019, and in the same time period was cleared by local leaders to expand its corporate headquarters. A Pleasant Grove City community development document from March reported that ASEA was preparing to begin construction on its new four-story, 96,000-square-foot office building.

A few months later, on June 11, 2021, ASEA’s entire $5 million PPP loan was forgiven by the federal government, according to Treasury Department records.

‘Opportunistic Behavior’

Robert Fitzpatrick has been following the multilevel marketing industry for more than 20 years through the site PyramidSchemeAlert.org. He’s provided expert testimony in 45 court cases and is the author of Ponzinomics, a book chronicling the multilevel marketing industry’s history and evolution over the decades.

He notes that while it’s hard to get data from the private companies in the industry, there is a discernible pattern of these companies increasing sales during public health crises and times of economic uncertainty.

“MLMs do well when times are hard because they are selling something when there’s more demand for it — and I’m not talking about face cream, leggings or vitamin pills — I’m talking about hope for income or a need for income that becomes extremely acute during a recession,” he says. 

It’s also the case that many multilevel marketing companies have been cited or warned about aggressive marketing practices during the COVID-19 pandemic. In 2020, the Federal Trade Commission warned 16 different MLMs about deceptive promises of their products being used to treat COVID-19. 

Similar warnings go back even to the last pandemic, when the FTC warned operators of 10 websites in 2009 about making illegal health claims about their products’ ability to treat the H1N1 “Swine Flu” virus. One of those sites forced to take down misleading marketing was operated by a Nature’s Sunshine Products distributor.

Fitzpatrick is skeptical of the idea that the pandemic would be anything but an opportunity for a multilevel marketing company that already capitalizes on a work-from-home model.

“Global supply chains affect everyone but the pandemic furloughed jobs,” Fitzpatrick says. “It forced [employees] back home and this was the perfect environment for MLMs to flourish.”

William Keep, a marketing professor at the College of New Jersey who has extensively studied the industry, says if these sorts of companies abused the Paycheck Protection Program, it’s not really that surprising given the program’s rollout. 

“When you push a lot of money out quickly, you’re going to find people engaging in opportunistic behavior, especially if there’s not a strong enforcement arm behind it, and the Paycheck Program Program did not have that,” Keep says.

What’s astounding to Keep is the MLM industry’s overall resiliency given so many studies showing only a tiny fraction of distributors ever make a profit from the supplements, oils, cosmetics and other products they try to sell to family, friends and neighbors.

“It seems almost unbelievable that a business model that purports to present a business opportunity thrives when what it largely provides is the opportunity to fail,” he says.

MORE ON UTAH’S MLM COMPANIES

Slippery Sales: Utah’s MLM companies push high volumes of “immunity boosting” essential oils during pandemic scare despite lack of scientific support

Big MLM trouble in Big China

Young Living Oils in hot water

The Essential Facts: An expert reveals the slippery science behind essential oils

Lavender Fields of Deceit?

Subscribe to Utah Stories weekly newsletter and get our stories directly to your inbox

* indicates required



, , ,

Join our newsletter.
Stay informed.


  • Left in a Box as a Baby: Trauma, Alcoholism, and Addiction

    A man abandoned as a baby builds a structured life in law enforcement, but unresolved trauma and alcoholism slowly begin to unravel it. His story raises a harder question about how change actually happens.


  • Utah Official’s $36K Travel Reimbursements Raise Questions About Use of Taxpayer Funds

    The trek into the office is a necessary evil for many employees; unpaid time that could be spent elsewhere. But some state employees are able to cash in on their commutes.

    That includes one member of Gov. Spencer Cox’s cabinet who heads the Utah Department of Cultural & Community Engagement. The department oversees a number of civic and social programs ranging from museums, libraries and the state historical society, to volunteerism efforts and multicultural affairs. 

    The employee’s in-state travel expenses made up a large chunk of the department’s employee reimbursements in recent years, according to documents obtained by The Utah Investigative Journalism Project obtained through a public records request. 

    The UIJP reviewed spreadsheets detailing the reimbursed expenses of the department’s 17-person leadership team over the 2024 and 2025 fiscal years. 

    The analysis showed one employee, Executive Director Donna Law, accounted for nearly a third of the team’s reimbursements in 2024 and 43% in 2025. Law, who lives in Cedar City, spent more than 11 times the average amount spent by all other employees included in the analysis. 

    The majority of Law’s expenses were categorized as in-state travel, which includes mileage and lodging. Between the two years, she spent $21,607.94 on lodging, $10,135.42  on auto mileage, and $1,455.00 in miscellaneous travel expenses and meals for a total of over $33,000. 

    The next highest amount spent on in-state travel was $3,385. Law’s overall spending far exceeded any other employee.

    The nearly $36,000 Law spent on travel and other items wasnearly three times that spent by the employee with the second highest amount in reimbursements. His expenses, in contrast, were largely out-of-state travel.

    Continue reading and support independent Utah journalism with a purchase of Utah Stories (Digital + Print) or 3 month free trial (Digital).


  • The $7 Million Recruit: How NIL Changed College Athletics Forever

    In 2012, Jabari Parker, a top high school prospect and member of the Church of Jesus Christ of Latter-day Saints, was facing his biggest decision to that point in his life: where to play college basketball. 

    Fans of BYU athletics hoped and perhaps prayed that Parker would pick the school owned by the church he was raised in. BYU was listed as one of his final choices. But he ultimately chose to spend his college years at Duke before attempting a career in the NBA. BYU fans were disappointed, but no one was truly surprised. Duke over BYU was the best choice for a young prospect in 2012. 

    A.J. Dybantsa.

    What changed between 2012 and 2024 when A.J. Dybantsa, the number one high school prospect, chose BYU over every other school? The answer is roughly $7 million dollars. That is what Dybantsa is reportedly making to play basketball at BYU. 

    The deal was supported by Utah Jazz owner Ryan Smith, who met multiple times with the Dybantsa family in multiple attempts to bring the young player to Provo. 

    According to Smith, he had no financial role in bringing Dybantsa to BYU, but the influence of Utah’s most famous billionaire acting as a “booster” or unofficial recruiter certainly swayed the decision.

    Prior to 2021, boosters acting as recruiters was taboo to the NCAA governing body. It was called improper recruiting. But in 2021, California began the modern era of NIL, or the ability of a college athlete to benefit from their name, image, or likeness, when they passed the “Fair Pay to Play Act.” 

    This new law gave college athletes in California the ability to benefit from their NIL, something that was banned in the rest of the country to that point. The NCAA saw that this law would create an unfair advantage for California schools that could now give young athletes the chance to make money off their talent and image while still in college. 

    The NCAA knew they needed to do something quickly, so they rushed through a policy that opened up NIL to all college athletes in the country, and it has been expanding and evolving over the last four years. 

    Grant Duff, who has coached at the University of Utah, Weber State University, and is now the defensive coordinator for Idaho State University, says, “The best part of NIL is that athletes have an opportunity to make good money. The downside comes with the free-for-all that money causes.”

    Dybantsa confers with BYU Head coach, Kevin Young.

    One of the biggest current examples of what a school can do when the boosters are willing to pay for success is Texas Tech University. From 2020-2024, Texas Tech had 34 wins, which works out to 6.8 wins per year with a low of 4 wins and high of 8. Then Texas Tech’s boosters got involved, led by Cody Campbell, an oil industry businessman and Chairman of the Texas Tech board. The football program was given 28 million dollars for NIL with a simple message attached to the large pile of money: Win. And win now. And win they did. 

    By signing NIL deals with athletes in the transfer portal, Texas Tech went from a middle-of-the-pack school in their conference to one of the top 12 teams in the country. They didn’t just win games in 2025, they made many of their opponents look like they didn’t belong on the same field, including the University of Utah and BYU twice. That is what money can buy.

    Continue reading and support independent Utah journalism with a purchase of Utah Stories (Digital + Print) or 3 month free trial (Digital).


  • Cottonwood Heights Corruption Allegations: A Case That Never Reached a Courtroom

    A year ago, we here at Utah Stories recorded a podcast episode that we never published. We were revisiting corruption allegations from ten years ago. We decided not to publish the video, so it sat there on YouTube for nearly 12 months.

    Then somehow the video was published. How? We are not sure, but once it got out there, the comments came pouring in.

    Dozens of viewers, then hundreds, supported the video with their comments on our examination of allegations of police misconduct in Cottonwood Heights. The video recounts how the Police Department was reported by business owners as focusing enforcement on customers of the former Canyon Inn bar. These allegations did not result in a publicly documented, full investigation by Utah’s Justice Department nor the FBI (at least to our knowledge). So why rehash the past?

    We believe the story of The Canyon Inn (and other area business owners) vs. CHPD and Cottonwood Heights Mayor Kelvin Cullimore raises questions about what can happen when allegations surface and do not move forward through a formal legal process with state or federal oversight.

    In 2012, Cottonwood Heights business owners at the mouth of the canyons began publicly objecting to police activity whereby up to seven cruisers were pulling over 711 and Canyon Inn bar customers on their busiest evenings.

    According to those accounts, drivers leaving the bar were frequently pulled over by police and were given DUI tickets, sometimes even after passing a sobriety examination. The volume and concentration of those stops led residents and business owners to complain about the “heavy-handed treatment” of CHPD toward motorists, especially in and around the Canyon Inn and neighboring 711, and eventually the Porcupine Pub.

    Customers responded in predictable ways. Some chose not to return and avoid the area. Others went to different establishments. Over time, the owner of the Canyon Inn, Jim Stojack, stated that his revenue declined by 70% and that he believed police activity near his business was the main contributing factor.

    Utah Stories reported on these concerns by conducting interviews; gathering video documentation provided by those involved; and making public records requests. Through our GRAMA requests, we reviewed DUI citations issued by the Cottonwood Heights Police Department and examined how those cases were resolved in Holladay Justice Court. During that period, we observed a higher number based on our review of DUI cases dismissed in court due to lack of evidence compared to other jurisdictions. One DUI attorney, Tyler Ayers, went on record saying that CHPD was issuing a high volume of DUI citations that were later dismissed.

    That observation raised questions about how cases were being documented and prosecuted. It did not, on its own, establish intent or misconduct, but it became part of a broader set of concerns raised by multiple sources.

    Continue reading and support independent Utah journalism with a purchase of Utah Stories (Digital + Print) or 3 month free trial (Digital).