Column: 15 minutes of fame flies by. [9][10] As a result of the complaints, the company modified its product claims and reformulated the product. Marconi also told Hughes about Pairs multiple acts of sexual harassment at Herbalife, according to the lawsuit. [126] In August 2020, Herbalife agreed to pay $123 million to the US Department of Justice and the U.S. Securities and Exchange Commission. A 2010 article in the Los Angeles Business Journal claimed that Herbalife Nutrition was one of the most profitable companies in Los Angeles County and directly benefited from its business model. We are delighted that you'd like to resume your subscription. Because Merv found out that the largest estate in Los Angeles at the time was Aaron Spelling's 56,000 square foot house. It turned out that Marconis degree was a mail-order doctorate from Donsbach University School of Nutrition, a non-accredited correspondence school in Huntington Beach. He founded the company 20 years ago. Pretty soon, thousands of sales people were selling Herbalife products door-to-door around the country. Mark R. Hughes Herbalife Nutrition/Founders [14], In September 1987, Hughes married Suzan Schroder, a former actress, court reporter and Miss Petite U.S.A.[14] In December 1991, Hughes' and his wife, Suzan Hughes, had his sole son, Alexander Reynolds "Alex" Hughes. Mark Hughes was an extraordinarily unique person who lived an extraordinarily unique life. Already a member? Herbalife profits enabled Marconi to expand his company, finance his Marconi Automotive Museum in Tustin, a charitable foundation for children and commission Italian sculptors to make full-scale replicas of Michelangelo works for his San Juan Capistrano ranch. Hughes relatives discovered his body, and they notified authorities, Thomas said. Hughes then sought out Marconi, who had supplied weight-loss products to Seyforth. In addition, the complaint charged that one of the fundamental principles of Herbalife's business modelincentivizing distributors to buy products and to recruit others to join and buy products so they could advance in the company's marketing program, rather than in response to actual consumer demandis an unfair practice in violation of the FTC Act. [38], Herbalife's products are produced at the company's five manufacturing facilities in the U.S. and China, as well as by third-party manufacturing partners. [134] During the 2020 Summer Olympics, Herbalife Nutrition was a sponsor of the Olympic Committee of Israel and the Indian Olympic Association. As a subscriber, you have 10 gift articles to give each month. [54] The settlement also required that distributors are only able to earn one-third of their rewards based on recruitment. [42][43] The facility produces botanical extracts, including teas, guarana, chamomile, broccoli, and bilberry, for use in many of the company's products. But Mark's Herbalife stock wasn't his only source of wealth. EIN: 22-2306795. Certainly the financial fortunes of both men have been closely linked. Herbalife's multi-level-marketing plan was outrageously successful. The $510-million buyout, announced last September, collapsed in April. The initial autopsy, conducted on May 23, was inconclusive and required additional tests. The whole Ackman saga is fascinating enough to deserve its own dedicated article on Celebrity Net Worth, but for now we're gonna take a look at a different, equally insane story from the Herbalife chronology. The company did not admit or deny the charges but agreed to the settlement terms. Mark's sole heir was his son Alexander Hughes, who was eight years old at the time. By the early 90s, Herbalife's annual revenues topped $1 billion. Unfortunately for Alex, he wouldn'tbe able to touch the money until he turned 35, in the year 2027. Its charismatic founder Mark Hughes was found dead at the age of 44 in his mansion. [120], The company remains under investigation as of early 2019 both by the United States Department of Justice and the U.S. Securities and Exchange Commission (SEC) for corruption in China. The lawsuit claims that the San Juan Capistrano entrepreneur and his Orange-based Global Health Sciences Inc. are the target of a carefully plotted and long-planned vendetta by Christopher Pair, Herbalifes chief executive and one of three co-trustees of the Mark Hughes Family Trust, which now controls nearly 60% of the companys shares. Over the years, various people have described Tower Grove as one of, if not THE, most beautiful and desirable pieces of real estate in Los Angeles. Herbalife Faces Struggle After Death of Founder Mark Hughes Herbalife Founder on Drinking Binge Before Death Make money now, ask me how! It must have been painful for Alex to know he couldn't touch the bulk of his fortune for a few decades, but to make matters worse, Alex and his mother Suzan became worried that the trustees were totally mismanaging the estate. to determine the cause of death. We are being vilified because we wont give them all of our business, Sandler said. Hughes was found dead in his Malibu mansion May 21. Einhorn said the short had been closed before the end of 2012. Hughes liked the sales business and soon jumped to Best Line Products, a similar firm that quickly went out of business. [15][16], By 1988, the company had expanded its reach to Japan, Spain, New Zealand, Israel, and Mexico and increased its worldwide sales to $191 million in 1991. Suzan once asked the trustees for $160,000 to rent a beach house in Malibu. Submit a correction suggestion and help us fix it! After Hughes was arrested twice for drunk driving, in 1996 and 1997, Marconi said he approached Rosen and Pair with a plan to take Hughes to a secretive alcohol-treatment center in Switzerland for three weeks. It has since become one of the world's largest distributors of herbal products, with sales of about $1.7 billion annually. In December, Hughes was reported to have paid about $25 million for his Malibu home. Hughes was found dead in his Malibu mansion, said Los Angeles County sheriff's Sgt. LOS ANGELES -- Herbalife International Inc. named chief operating officer Christopher Pair acting president and chief executive of the nutritional and diet products company Monday, a day after the . The death of Herbalife International founder Mark Hughes in May following a drinking binge has triggered a series of bizarre allegations about the key executives who helped the charismatic salesman build one of the nations biggest dietary supplement sellers. Coroner . You may cancel your subscription at anytime by calling His blood alcohol level was 0.21 percent. Customer Service. Subsequently, Bill Ackman lost $400-$500 million on his bet. He owned a $25 million beach front mansion in Malibu. Mark had one child, with wife #3 Suzan Schroder (the former Miss Petite USA). Scott Carrier, of the Los Angeles County Coroner's Office, said final . Herbalife officials said Marconis claims were absurd. He was just 44 years old and had been suffering for several months from insomnia and a recurring case of pneumonia. 2023 Celebrity Net Worth / All Rights Reserved. It took more than a decade since Mark's untimely death to resolve these legal battles. When the company went public on the NASDAQ in 1996, Mark's 26% stake was worth $250 million. The Absolutely Insane Life And Death Story Of Herbalife Founder Mark Hughes By Brian Warner on August 21, 2019 in Articles Entertainment If you follow financial news, you may have heard. In 1994, Mark created Herbalife Nutrition Foundation (HNF), with the goal of improving childrens lives by helping organizations provide healthy nutrition to vulnerable children. HNF also lends support to relief efforts and responds to natural disasters globally. Hughes often stated that the genesis of his product and program stemmed from the weight loss concerns of his mother Joanne whose premature death he attributed to an eating disorder and an unhealthy approach to weight loss. Mr. Hughes, 44, who promoted natural healing methods using Herbalife's health care and weight-loss products, was being treated by a psychiatrist for his drinking problem and smoked six to eight cigars a day, according to the coroner's report. [14], Scott Carrier, of the Los Angeles County Coroner's Office, said final autopsy results found that Hughes, 44, had ingested a toxic combination of alcohol and Doxepin, an antidepressant he was taking to help him sleep. Moreover, Herbalife executives said the strategic move to stop using Global Health as a near exclusive supplier started three years ago with Hughes approval. [15] Suzan filed for divorce from Hughes in September 1997. ), the subcommittee chairman, said that Herbalife and. The coroner said Mr.. [8] One of the trustees of Alex's fortune allegedly sold The Vineyard for just $23 million to a man who had no money and no experience in developing real estate. And speaking of impressing Donald Trump, during his lifetime Mark married four different beauty queens. More recently, however, Marconi told The Times he provided Hughes with copies of a Beverly Hills Police Department mug shot of Pair, taken after the executive was caught shoplifting at the Saks Fifth Avenue store on Wilshire Boulevard two years ago. [49], In 2008, Herbalife was sued after laboratory tests indicated that levels of lead in several Herbalife products were in excess of California state law[50] and could lead to liver problems over an extended period of time. [45] The processed raw materials from the extraction facility are used at all of the company's branded manufacturing facilities as well as by its partners. Scott Carrier, of the Los Angeles County Coroner's Office, said final autopsy results found that Hughes, 44, had high levels of both alcohol and an antidepressant in his blood. Sign In. Concerning Mischaracterization in Advertisement", "Herbalife's Claims Drawing Medical Fire, Government Probes", "History of Herbalife International, Inc. FundingUniverse", "Herbalife Lays Off 573, Blames Slowing Sales", "Nobel Prize Winner Didn't Disclose Herbalife Contract (Update1)", "Herbalife's Afterlife Challenge; Charismatic Leader Left an Image Problem and Other Issues", "Herbalife's Hughes Plans to Privatize In $500 Million, Leveraged Buyout", "But where are the distributors' yachts? External sites are not endorsed by CNN Interactive. [21], In 2002, the company was acquired for US$685million by J.H. Griffin dubbed his property "The Vineyard". At this point, the family survived on welfare payments with Hughes' mother suffering from "emotional problems." Mark Reynolds Hughes, Herbalife's founder and president, is among witnesses who have been subpoenaed. Alex was only 8 in 2000 when his father, Herbalife founder Mark Hughes, died and left a $400 million trust for his only son to inherit at 35. Marconi feared that if news of Hughes addiction leaked out, it would damage the pitchmans youthful and healthy image and hurt the company. You may change your billing preferences at any time in the Customer Center or call Hughes often stated that the genesis of his product and program stemmed from the weight loss concerns of his mother Joanne whose premature death he attributed to an eating disorder and an unhealthy approach to weight loss. It was certainly a wild ride while it lasted. The prime example of their mismanagement was related to The Vineyard. On this Wikipedia the language links are at the top of the page across from the article title. [39][40]:16 The company's production process is based on a 'seed to feed' strategy, which the company initiated in the 2010s that allows it to trace where the ingredients in its nutritional products originated. Marconi has fought with Pair before, at one point telling Hughes to fire Pair during a company downturn in the mid-1980s. Griffin's plan was to develop what would have been the largest house in Los Angeles on the property, a 58,000 square foot palace. Marconi said in the lawsuit that the switch was inspired by revenge and violated a verbal agreement with Hughes reaffirmed at several points over the past 20 years. The rift between these individuals took a public twist Tuesday. estate in late May. Mark Reynolds Hughes was born on January 1st, 1956 in La Mirada, California. [133] It also has a multi-year sponsorship with Jonathan Dos Santos of the LA Galaxy. John was one of Herbalife's true personalities and he will be missed. [5] The company announced in November 2016 that Chief Operating Officer Richard Goudis would take over the position of CEO in June 2017 and Johnson would transition to executive chairman. The judge ruled in favor of Alex and removed the trustees from the estate forever. [23]:15[24] In April 2003, Michael O. Johnson joined Herbalife as CEO following a 17-year career with The Walt Disney Company. They said diversifying the companys supply chain was a prudent business decision. He has a masters degree from Northwestern Universitys Medill School of Journalism. [106][107], Based on information from a Freedom of Information Act (FOIA) request, the New York Post reported on February 4, 2013, that Herbalife was subject to a pending probe from the Federal Trade Commission (FTC). Why 58,000 square feet? [16], In February 1999, Hughes married Darcy LaPier, an American actress and model. According to the lawsuit, Hughes apparently relented to a passionate appeal by Pair, who met Hughes during his reform school days at the Cedu School in Running Springs, Calif. Herbalife has variously described Pair as a former advisor and intern at the institution. But as the companies grew, Hughes wound up with an interest in what became Global Health, collecting $43 million in a 1998 Marconi-led leveraged buyout of the manufacturer. June 17, 2000 [55] In the U.S., the company now differentiates between individuals who join as a member to buy discounted products and those who join as a distributor seeking a business opportunity. CNN News, June 17, 2000. Hughes became the school's best salesman. After Hughes left the school he found work as a distributor for Seyforth Labs. In 2002, Herbalife was taken private by a group of investors for $685 million dollars. [30] On April 25, 2018, Herbalife announced that it had changed its name from Herbalife Ltd. to Herbalife Nutrition Ltd. Hughes was a juvenile delinquent who learned the art of sales while fund-raising for his reform school in the early 1970s. Fred Siegel, Marconis former business partner, joined Herbalife and helped devise a plan to restore Herbalifes financial health. He left The Times in 2015. He later became a millionaire again. 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