Social networking expert banned in US

An American consultant subject to a lifelong ban by the US Federal Trade Commission has been flown to Auckland to take part in an online seminar by NZX-listed food supplement marketer New Image Group.

The company, 10 per cent owned by Huljich KiwiSaver funds, promoted the event on Tuesday as a "live international presidents rally" featuring New Image founder Graeme Clegg, two New Image executives and a "US mystery guest".

Mr Clegg confirmed that the guest was Larry Stephen Huff, who was advising New Image on using social networking technology.

"He's highly regarded as an expert in webinars in the US," Mr Clegg said. "For the last month we've been testing some of his systems and services."

It is understood that Mr Huff is Lawrence Stephen Huff, named in a 1998 Federal Trade Commission (FTC) lawsuit against California-based FutureNet Inc.

The FTC said FutureNet's multi-level marketing scheme was an illegal pyramid and income promised from the scheme "could only come from fees paid by newly recruited distributors who would in turn recruit more distributors, vainly seeking to recruit and collect fees from an endless downline of new distributors".

In settling the FTC charges without admission of liability, Mr Huff was permanently barred from taking part in any multi-level marketing scheme in the US, "in any capacity whatsoever, directly, or in concert with others, or through any business entity or any other device".

New Image, a multi-level marketing company focused mainly on Asia, sells a range of products, including supplements based on colostrum, the first flow of a cow's milk after calving, and claimed to boost the immune system.

Mr Clegg said he was aware of Mr Huff's background but felt it was not relevant.

"I've known him from 28 years ago when I first got into this industry. He had a company in New Zealand [Total Image] and that's how I got introduced to the systems."

Mr Clegg said he knew nothing of Mr Huff's permanent US ban from associated with multi-level marketing.

"That's a United States issue not a New Zealand one. We're talking about simply utilising an IT service that's available and cutting edge." Mr Huff could not be reached for comment.

Last week New Image reported net profit of $7.4 million for the year to June, down 52 per cent on the previous year. Revenue fell 17 per cent to $81.3m.

Its shares closed unchanged yesterday at 38c, valuing the company at $89.2m.

- © Fairfax NZ News