Buried amid the naughty list of tax defaulters this week was a €164,000 settlement by the Irish division of Lifewave, a US multi-level-marketing (MLM) healthcare company promoted by Three's Company actor and former Playboy pin-up Suzanne Somers (69).
MLM schemes operate by recruiting sales agents, who then recruit more sales agents and so on.
Such schemes have always had their critics, who argue that they suck in gullible participants to pyramid-like structures.
MLM companies, which are popular within the consumer healthcare industry, usually counter that it is a legitimate business model that makes money for many of their “members”.
Lifewave Europe, the tax defaulter, is based in Galway. Its main products are body patches which it claims combat, well, a whole host of ailments.
The miraculous patches use “organic crystals” that supposedly react with body heat to give pain relief, help reduce weight gain, slow down ageing, provide energy, detoxify the body and “improve overall health”.
It all sounds rather revolutionary, but the patches don’t appear to be regulated by any health authority.
Somers, an informercial queen who also once had a Broadway show called The Blonde in the Thunderbird, has form in promoting various "alternative" therapies, some of which were controversial.
Members of the Lifewave MLM scheme can buy packs to resell for up to $1,600, while individual patch packs cost up to $70. The business is a real money- spinner for Lifewave.
Lifewave Europe’s latest accounts, for 2014, show gross profits for the Galway firm of €19.7 million and net profits of €2.5 million.
The US parent company, founded by David Schmidt, also took a €1.1 million royalty fee, a €2.1 million management fee and engaged in total transactions with its European arm to the tune of €16 million. The accounts also refer to members' commissions of €11 million.
The 2014 accounts show a tax bill of €373,000, but the Revenue Commissioners still hit Lifewave Europe with a penalty for underdeclaring corporation tax and VAT. Those organic crystals clearly don’t help to patch up the brain’s adding ability.
