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Investigation: LA County Sheriff Lee Baca turned pitchman?

September 30, 2013 12:00:00 AM PDT
Following an Eyewitness News Investigation, LA County Sheriff Lee Baca today said he is separating himself from a health products company for which he recorded a promotional video. Baca is the pitch-man in the 3 1/2 minute video for Irvine-based Yor Health, a company that sells dietary supplements and other health products. It opens with, "Hi, I'm Lee Baca and I'm the Sheriff of Los Angeles County and I'm going to live to be 100 years old and beyond!"

In the video, which was posted on YouTube by Yor Health, Sheriff Baca can be seen running through his neighborhood and guzzling a Yor Health drink. "The advice I give my friends who are trying to take full control of their health is to take the Yor Health products, sustain their daily nutritional needs and operate on less than 2,500 calories a day," Baca says on the video.

"To me, this is 100 percent unethical," says Dr. Maki Haberfeld of the John Jay College of Criminal Justice in New York. Professor Haberfeld is an expert in law enforcement ethics and has taught the subject for more than a decade. Haberfeld says the Sheriff should be held to a higher standard and not give even the impression that any particular entity may get preferential treatment. "It's absolutely inappropriate and again, I think that endorsing any product as long as you are a public servant is absolutely unethical."

Yor Health is a company that sells health products founded by Dennis Wong of Pasadena in 2008. One of Wong's previous companies, 2by2.net, was charged by the Federal Trade Commission as an illegal pyramid scheme back in 2004. The FTC fined Wong and his co-defendant $10.4 million, but settled the case for $400,000. Wong did not admit to any wrongdoing.

Eyewitness News attended the 2013 Yor Health annual conference in Costa Mesa in early September, where Sheriff Lee Baca was among the guest speakers. Dennis Wong introduced Sheriff Baca, referring to him as his mentor. "Without further ado, my dear friend, Sheriff Lee Baca!" exclaimed Wong as audience members rose to their feet, cheering and waving signs.

Baca strode on stage in a black T-shirt adorned with a gold lamé Yor Health symbol. His speech emphasized the importance of maintaining a good exercise and nutrition plan, but also veered into a sort of pep rally for the more than 1,000 Yor Health independent representatives in attendance. "There are days when you're going to get up and feel like I don't want to make that contact with my customer. As a result, you don't do it. But you can't exist that way. You have to learn to conquer what you don't want to do," Baca told the crowd.

Sheriff Baca has made regular appearances at Yor Health conferences, attending as a guest speaker every year since 2010. In a video of the Yor Health 2010 event, Baca tells the crowd, "We're going to and we are selling these products at the Sheriff's Department Emporium for the deputies themselves."

Eyewitness News asked Professor Jessica Levinson of Loyola Law School, a specialist in election law, to view the videos. "Sheriff Baca -- as Sheriff Baca -- is promoting this product," she says. "He's saying it's a good product. He's telling his guys that it's a good idea to use this product."

Sheriff Baca does not appear in uniform himself. However, graphics used to introduce his speeches and promote his overall endorsement of Yor Health do show Baca in his Sheriff's Department uniform. "So, he's very clearly there as Sheriff Baca, not just as Lee Baca, Joe Citizen off the street," says Levinson.

Eyewitness News has learned that Sheriff Baca received a $1,000 campaign donation from Yor Health in May of 2010. Three months later, Baca was a guest speaker at his first Yor Health annual conference. In 2012, Baca reported on an income disclosure statement that he accepted $527 in reimbursement from Yor Health for travel expenses to speak at their annual conference in Las Vegas.

But does Baca's endorsement of Yor Health violate L.A. County Conflict of Interest codes, which prohibit the use of "the badge, uniform, prestige or influence" for private gain?

Professor Levinson does not believe that Sheriff Baca has crossed that legal line, but she does think it raises questions about his judgment. "I'm not convinced he's kicked over that threshold, but when we look at the purpose of the conflict of interest statutes and the spirit of the law, then I think it's perfectly fair to ask questions" says Professor Levinson.

Eyewitness News obtained more than a dozen complaints to the Federal Trade Commission about Yor Health since 2008. Among the allegations: Yor Health is "really a pyramid scheme;" it's focused more on "recruiting others? than selling the actual product;" it "brainwashes and manipulates people;" and uses "cult-like techniques to get people to join their company." The FTC will not publicly disclose what, if any, action they've taken in response to the complaints about Yor Health.

Yor Health head, Dennis Wong's settlement with the FTC over his previous company, 2by2.net, bars him from "participating in any prohibited marketing scheme", including any business that operates as a pyramid scheme.Dennis Wong's 2004 settlement with the FTC requires extensive disclosures in any future business venture and bars him from misrepresenting its potential or likely earnings.

Yor Health does make extensive disclosures. One warns potential representatives about "substantial risk" and says the opportunity is "intended only for those who can afford to lose all or substantially all of their purchases." Another disclosure states that 32% of all independent representatives make no money at all, and that the median amount of commissions, bonuses and overrides received by all independent representatives is $0. That means half of all Yor Health independent sales representatives actually lose money.

So, what is a pyramid scheme? Eyewitness News asked FBI Special Agent Steve Goldman, a specialist in financial crimes. Speaking in general terms, and not about Yor Health, Goldman says there's a fine line between legal multi-level marketing and illegal pyramid schemes. Goldman says it's important to ask where most of your potential profits would be coming from. "Is it the money we're making selling that product or service? Or is it the money from new people that are buying a chance to build that business?" asks Goldman.

Robert Fitzpatrick is an expert on multi-level marketing and pyramid scheme frauds. He's testified as an expert witness and consulted for several government agencies including the U.S. Department of Justice. Fitzpatrick says the defining question is, "Can you earn a sustainable profit from just selling the product to your own customers, by yourself as a direct selling person? If you cannot -- and if most people in a scheme do not -- however, you can make money by recruiting other people to become distributors, that's the tell-tale sign of an endless chain or a pyramid scheme."

Fitzpatrick examined the Yor Health income disclosures for Eyewitness News and calls them "a study in data manipulation." He says Yor Health appears to satisfy the terms of Wong's settlement with the FTC. But Fitzpatrick says, "The key piece of data that I would want to see from Yor Health is, what's the dropout rate? What's the churn rate? Each year, out of all the people that sign up, how many renew for the next year? How long do they stay in? How many stay in for as long as two years? And that's not disclosed on the income disclosure sheet."

Sheriff Baca refused repeated requests from Eyewitness News for an interview. But Baca did provide Sheriff's Department spokesperson Steve Whitmore, who told us that Baca is promoting Yor Health simply because he believes in the product. "The Sheriff tried the product and liked it. Under 2500 calories a day, he believes you get your full nutrition," Whitmore said.

Eyewitness News asked Whitmore if Sheriff Baca had received any money from Yor Health at all, whether it was compensation, reimbursement or campaign contributions? Whitmore said, "Not a dime, nothing. They don't pay him for anything. Not a thing." Whitmore says he didn't know about the $1,000 campaign contribution and $527 in travel reimbursement from Yor Health until we told him.

Whitmore later told Eyewitness News by phone that Sheriff Baca did not know about the Yor Health campaign contribution and had no recollection of saying that he'd make their products available at the Sheriff's Department Emporium. Whitmore went on to say that Sheriff Baca is "distancing himself" from the company.

Today spokesman Whitmore called Eyewitness News to say the Sheriff is separating himself from Yor Health and has asked Dennis Wong to have all videos of the Sheriff taken off line.

Through his spokesman Sheriff Baca now says he recorded the video with the understanding it would be used only for internal purposes.

Eyewitness News tried repeatedly to speak with Dennis Wong or another representative of Yor Health. Other than one very brief phone call with Wong, they did not respond to our requests for an interview.

Have a tip? Email the producer of this investigation: Lisa.Bartley@abc.com


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