John Tartol

Dates of Herbalife Distributorship: 1982 – present
Status in Herbalife: Chairman’s Club, Herbalife Board of Directors (current)
Business Methods: Training Videos, Calls and Presentations; Recruiting Scripts; Distributor Website Registrations

All statements in the report are made pursuant to Pershing Square’s disclaimer available at dev-facts-about-herbalife.pantheonsite.io.

Background on Herbalife-Related Businesses

• John Tartol is one of the owners of Success Connection, a business that markets training videos, recruiting scripts and other business tools to Herbalife distributors.
  • Success Connection, LLC, is registered in Colorado (Filing Number:  10011196608, registration attached as Exhibit A).
  • The Success Connection articles of incorporation, attached as Exhibit B, list the Members of the company as HealthQuest International Inc. (which is registered to Leslie Stanford), [1] as well as Tartol Enterprises, Herbal Way Incorporated and J&N Management Consulting.
  • Tartol Enterprises is registered in California (Entity Number C1211241, filed 9/16/83, registration attached as Exhibit D) to senior Herbalife distributor and member of the Herbalife board of directors John Tartol.
  • Herbal Way Incorporated, which was incorporated in Illinois but is currently based in Texas, is registered to Tartol’s sister Mary Holloway.  (Texas SOS File Number 0800430702, filed 12/17/04, registration and tax account status attached as Exhibit E and Exhibit F.)
  • J&N Management Consulting is registered in Massachusetts (ID Number 042876156, filed 06/20/85, registration attached as Exhibit G), and is operated by Tartol’s brother Jim Tartol and Jim’s wife Nancy.
  • Tartol is also listed as an “Admin” on the Success Connection Facebook page.

  

Primary Source Data on Business Practices

• Videos & Audio

  • In one audio training, Tartol encourages his trainees to ‘wring the lead dry,’ explaining how to push a hesitant potential recruit to sign up with Herbalife.  Excerpts from that training call appear below under the heading Lead Generation. https://soundcloud.com/hlfaudio/91106-1
  • Tartol appears in numerous videos promoting the Herbalife business opportunity and purporting to train Herbalife distributors on how to be successful.
    • In one such video from 2000, available at https://youtu.be/8KNCg0PAx34,[2] Tartol tells potential recruits that “once you get a little bit comfortable with [the Herbalife business], it becomes a game.”
    • Tartol goes on to tell recruits that he has “ultimate freedom” and can spend lots of time with his children.  Tartol’s then-wife (now ex-wife) Lori echoes this point, noting that “one of the things that really attracted us was the freedom and options.”
    • Lori continues, “Herbalife’s afforded me the chance to live the life that I only dreamt possible,” and she tells potential recruits that she “never saw this big money.  It just happened.  And it just does happen.”
    • The video assures potential recruits that they too can earn substantial income by pursuing the Herbalife business opportunity.  Lori tells recruits, “anybody can still do what we did to start the business, nothing has really changed that much.”  This is highly misleading.  According to Herbalife’s Statement of Average Gross Compensation of U.S. Distributors in 2012, available at http://opportunity.herbalife.com/Content/en-US/pdf/business-opportunity/StatementAverageCompensation2011EN.pdf, only three-hundredths of one percent of Herbalife distributors in the U.S. earn even $250,000 per year in payments from Herbalife, while 88% of those distributors earn $0 per year in payments from Herbalife.

  

  • Another video featuring Tartol at an Herbalife Extravaganza in Las Vegas in 2011, available at https://youtu.be/-rkRZcK6Dds, purports to teach new distributors how to advance through the Herbalife marketing plan.
  • Referring to Herbalife founder Mark Hughes’s vision for duplication, Tartol tells attendees that “Mark Hughes said, ‘I need 1,000 Mark Hugheses,’ then he said, ‘I need 10,000, I need 100,000 Mark Hugheses, to get to $5 billion per year [in revenue], $10 billion per year, and beyond.’”  Tartol also tells distributors to “[t]ake good notes, not just on what we’re saying, but how to teach it, and how to teach people to teach.”  The concept of “duplication” appears throughout distributor recruiting materials and appears to be little more than a euphemism for pyramidal recruiting.
  • Tartol assures distributors that they can be successful more quickly than ever, saying “what took us that many years to do—25, 30-plus years—you can all do in the next six, seven, eight years.  This is why everybody here is fired up.  Because we know it.”
  • Tartol also assures attendees that they can be successful even if they do not understand the (highly complex) Herbalife marketing plan.  Indeed, Tartol tells distributors not to “worry about understanding perfectly [the different levels of the marketing plan at which a new distributor can join].”  Tartol explains that “[e]ven if you don’t get it get it, the imaging [of slides about the marketing plan on myherbalife.com] and all that makes you understand, ‘hey, if I use the product, wear the button, talk to people, and get them to do the same thing, it can work for me too.’”
  • Early in his presentation, Tartol also refers to a separate Extravaganza taking place for “the Latin community” and asks distributors, “how many of you would like to get a little more Latino business in your organization?”
  • In another video of a subsequent portion of Tartol’s presentation at the Las Vegas Extravaganza, available at https://youtu.be/-rkRZcK6Dds, Tartol tells new distributors, “in Herbalife, you’re just beginning to see it if you’re new, you truly can get here if you’re willing to use the product, wear the button, talk to people.  OK?  Whatever.  So, dream.  Dream big.”  (6:41 – 6:59.)

  

  • Another video, in which Tartol promotes the 2008 Herbalife Extravaganza in Argentina, available at https://www.youtube.com/watch?v=tjqQUUUZ308 and at https://youtu.be/U61305MIzng, reinforces the fundamental importance of recruiting for Herbalife’s marketing plan.  Noting the opportunity for attendees to meet with successful South American distributors, Tartol states that “you’re also going to have some of the top, top distributors from that region of the world to talk about exactly what they are doing to advance their business, get more customers, get more distributors, and build that distributor base, that’s going to help you, as I said, get to that position of the marketing plan that you’re going for next.”

  

  • Another video, available at https://www.youtube.com/watch?v=OoIBusPo4nI and at https://youtu.be/9dMhVN1gTDg, features Tartol encouraging Supervisors to requalify for their position as Supervisors (in order to remain eligible for recruiting rewards).  Tartol tells Supervisors that they want to be “in position to really take advantage of the marketing plan” if they can “get some people that decide to do the business.”   He further urges Supervisors to “encourage your [downline] people to [requalify] now, because again, it’s gonna help them move up the marketing plan faster by retaining people now.  And by doing that, now you can work and get up to the next pin level—GET, MIL, Pres [referring to Global Expansion Team, Millionaire Team and President’s Team]—so much faster.”

  

  • Another video, available at https://youtu.be/-BAGPvtzDcE, features Tartol teaching distributors how to expand their business internationally.  Evincing no interest in actually mentoring or coaching new recruits, Tartol suggests the following to his audience: “For example, Vietnam is opening.  I tell [my downline], find out if a plane is coming in from Vietnam, go to baggage, and hand out fliers to everybody [inaudible], or at least talk to them and say, ‘Are you from Vietnam?’  I need help there, my business is opening there in two months.’”
  • Later in the video, Tartol explains that “[w]e go to every nail salon in Los Angeles that’s run by a Vietnamese.  We are attacking them.  We’re going to every Vietnamese restaurant.  We’re advertising in the Vietnamese papers. . . .  I’m saying we need to get business right here in Los Angeles now.”
  • Herbalife boasts that Tartol’s downline has expanded to 75 countries.

  

  • In a video of Tartol’s presentation at the 2012 President’s Summit (an event sponsored by Herbalife), available at https://youtu.be/gsVqKbqGbF4, Tartol tells the audience they can become hugely successful even more quickly than he did.  Tartol says, “what took us 30 years to do, new people are gonna be able to do in the next 4, 5, 6 years.”  He then asks the audience, “How many of you would like to make at least a million dollars a year?  Every extra million dollars, I find, comes in handy.  2 million?  5 million?”  It is highly misleading to suggest to a room full of Herbalife distributors that they can realistically earn that kind of money.
  • Later in his presentation, Tartol tells attendees, “If you really want to grow, if you really want to get up to President’s Team and Chairman’s Club, Founder’s Circle, yes, you want to learn the information, but then you want to learn how to teach the information.”

  

  • Tartol also conducts trainings for David and Karen DeSaegher’s dMk Team.
    • One such video, available at https://youtu.be/qWYojdKK-RI, features Tartol providing a training for David and Karen DeSaegher’s dMk Team.  During his training, Tartol teaches members of the dMk Team how to help their downline distributors get over being “scared” to approach potential recruits with the business opportunity.  Tartol explains to members that their downline distributors have to know how to present the business opportunity and where to send new recruits.  He tells members, “Make sure that you and your people know how to make invitations and presentations.”
    • Tartol also addresses the dMk Team’s system of sending packages to potential recruits and using scripts to follow up and recruit them.  He says that distributors sending the package and using the scripts have to “learn how to ask for the money.”
    • Tartol tells members that in order to be successful operating an Herbalife nutrition club, “you have to invite 25, 50 people a day.”  He also asks David DeSaegher how many “packages” a member should send to potential recruits.  DeSaegher answers, “30 to 60 a month.”  Recruits have to purchase these “packages” from their sponsors.
    • Tartol also appears in videos promoting the Success Connection.
      • One such video, available at http://www.youtube.com/watch?v=kKq8IhJ_dMI and at https://youtu.be/a22f-lpgJYI, features both Tartol and Leslie Stanford.  In a highly deceptive income testimonial, Tartol tells potential recruits, “within ten months, I was earning over ten thousand dollars a month, and the lifestyle changes were—were dramatic.”
      • Tartol assures distributors that his success is not unusual:  “So, for me, I thought, wow, this freedom is unbelievable.  And I’m telling you, at the Success Connection, it could absolutely help you, too.”  Whatever Tartol’s experience, the average new distributor does not achieve financial freedom.
      • Tartol is joined in this video by senior Herbalife distributor and former member of the Herbalife board of directors Leslie Stanford.  Tartol and Stanford swap stories and income claims, telling recruits that they are making millions with Herbalife and Success Connection.

  

  Stanford:   But I have to tell you, John, you know, did you—would you have ever guessed in a million years that we’d be making millions in this?

  Tartol:      Never Leslie, it’s unbelievable.

  • This video is available not only on YouTube but also on active websites affiliated with Success Connection:

  

  http://myfutureishere.com

  • In another video, available at https://youtu.be/exvFkn8hh_E,[3] Tartol tells new recruits “the name of the game is duplication here” (3:18), and “duplication, like I said, is so important here” (3:58).
  • Tartol also tells new recruits that the way to be successful is to recruit new distributors into the scheme and push them to order thousands of dollars of Herbalife products in their first month in order to qualify as a Supervisor immediately (in order to be eligible for recruiting rewards):

  Also, you’re gonna find distributors, OK, people that also want to work the business.  Maybe they’re in category 2, wanna build up some supplemental income.  Maybe they’re actually in category 3 and want to build financial independence, OK?  Those people are gonna come in, just like you, or many of you, where, um, you know, or like us, where the first month they end up doing 4000 [volume points] in business, you see?  Well, that will also go toward your production and we’re gonna share with you on the tape today how that’s gonna help you achieve special trainings that the company puts on—by the way you’re gonna make more money—but also special trainings, promotions, there’s getaway weekends and vacations, so we’ll get into all of that throughout the tape.

  (24:11 – 24:52.)

• Lead Generation Materials

  • Success Connection provided lead generation services through the website www.successconnection.com.[4]
    • A Success Connection flyer, attached as Exhibit H, directed members of Success Connection to the website SCBizCentral.com for training calls, recruiting resources and other business tools, and directed members to www.successconnectiontools.com to “access the ability to purchase leads, flyers, business cards, signs for your car etc…  The training for working the leads can be found their [sic] too once you purchase the leads.”

  

  • The website www.successconnectiontools.com was registered to Leads to Wealth, Inc. (domain name look-up attached as Exhibit I).
  • Leads to Wealth was founded by Gil Ortega (who was CEO from 2001 to 2007), a self-professed “lead generation expert,” who claims to have developed the radio campaign for Herbalife lead generation business IncomeAtHome.com. See http://www.gilortega.net/about/.
  • We believe IncomeAtHome.com has ties to former senior Herbalife distributor Shawn Dahl through Centurion Media Group.
  • “Wring the Lead Dry”
    • Tartol participates in a training call in which he encourages trainees to ‘wring a lead dry.’   https://soundcloud.com/hlfaudio/91106johntartolnewsystem
    • At 33:30 minutes:
      • “Could you default back to another conference call?  Sure.  You can do all that kind of stuff – IF you feel they’re serious- you DO want to wring a lead dry.  For me it’s three strikes and you’re out – or three questions and you’re out… or three, you know.”
      • “They say ‘I really wanna do it but gosh, I can’t do it this week…’  See, that’s one – but we do set up a time for the next call.  Call the next time and we actually talk and the person still does not commit to get going.  ‘Gosh I really wanna do it, da da da da da…’   That’s two.”
      • “If the third time…then I just say, ‘You know? Mary, you just seem really distracted right now, really busy.  Now, are you still serious about changing your financial future?’  ‘Yeah I swear I am!’  ‘Well, you know, Mary, I just don’t want to waste your time or mine because I do have people that are SERIOUS about this.  You know, when you get your calendar clear, I am gonna be here, I’m not going anywhere, Mary.  So you have my name and number, and I will send you some occasional emails.  By the way, your email is blah-blah-blah-blah, right?’  ‘Yeah it is.’   ‘Okay, great, so I will send you that just to keep the connection there and when you get serious, you can give me a call. Okay?’  ‘Okay.
      • And then? Move on! You know…yes, I did say wring the lead dry but if you have talked to them three times and they haven’t acted, it is time to move on, okay?

Success Connection Training Calls

• Tartol also conducts frequent training calls for Success Connection members.  A list of links to recent training calls from the Success Connection website is attached as Exhibit J, and the calls featuring Tartol are available at the links below:

• In an August 26, 2013 call, available at http://successconnection.com/calls/082613.wav and at https://www.soundcloud.com/hlfaudio/082613-1, Tartol details “the lifestyle” Herbalife allows him to lead, describing his visits to Hawaii and Costa Rica, throughout the first four minutes of the call.  Later, Tartol explains the importance of ensuring each distributor and their downline qualifies for higher levels within the marketing plan, saying, “I can’t stress enough the importance, for those of you that are serious about the business, to continually—number one—make sure that you each year qualify for active World Team, then you, as part of your method of operation, recruiting distributors—you know you’re gonna get a certain amount of people who are serious, and those who are serious, they need to get to active World Team.”  (12:44 – 13:10.)  Tartol notes that “duplicating yourself” is how one will “move up in the [marketing] plan.”  (13:34 – 14:11.)
• In a March 4, 2013 call, available at http://successconnection.com/calls/030413.wav and at https://www.soundcloud.com/hlfaudio/030413-1, Tartol, when discussing the March 2013 Herbalife “President’s Summit” in Paris, at which Herbalife would allegedly be doling out over $60 million in bonuses, emphasizes that “duplicat[ion]” is the key to success at Herbalife.  (20:15.)
• In a February 4, 2013 call, entitled “Kick off the Month Strong and Turning Customers into Distributors,” available at http://successconnection.com/calls/020413.wav and at https://www.soundcloud.com/hlfaudio/020413-1, Tartol describes a variety of recruiting techniques.  For example, Tartol describes how to conduct “roadshows.”  To conduct a successful roadshow, a distributor goes to a mall, sets up a tent or banner, “pull[s] people over to do, like, a mini-sampling,” and “ask[s] people to take a little survey” about their health—noting that these are “the kind of surveys we have on scbizcentral.com.”  Tartol continues, linking these roadshows to the ultimate goal of recruiting, saying, “the real thing is the chance to invite them back to their club, or to a weight-loss challenge, or to a wellness evaluation,” and “. . . within it, making sure that they have the recruiting happening with the HOMs [Herbalife Opportunity Meetings] in their clubs.”  (6:27 – 8:26.)
• Later in the call, Tartol once again stresses recruiting, noting that “it’s getting a 500 royalty point check that people have to work on the hardest, which means you have to have distributors who are working, and then helping duplicate them so it gets your royalty check to 500 royalty points. . . .  Now, just do it again.”  (19:33 – 20:00.)
• On the same call, Tartol also tells distributors that they must use the products.  “When you’re developing your plan, . . . number one, you gotta use the product”;  “making sure that you are really solid on the product, you are using as much as you can.”  (21:47 – 22:16.)  Consumption by distributors, of course, generates revenue for Herbalife and commissions for upline Supervisors, and also creates an illusion of retail demand for Herbalife products.
• Referring to recruiting new distributors, Tartol says, “the more people you talk to, if you really do talk to those five new people a day, ten people, you will find the serious people—the serious customers, the serious distributors, who then lead to a serious income for the rest of your life.”  (42:00 – 42:16.)
• In a Success Connection training call from 2006, available at https://soundcloud.com/hlfaudio/91106johntartolnewsystem, Tartol claims that if a distributor works part-time, speaking with three people per day, that distributor will make $300 to $500 dollars per month.  Tartol continues, noting that if a distributor speaks with five people per day, that distributor could make between $1,000 and $2,000 dollars per month.  Tartol further claims he spoke with ten new people per day, six days per week, and, after ten months, he was making $10,000 per month.  (1:37 – 2:42.)  If every new distributor spoke with five or ten people per day, and their recruits spoke to five or ten people per day, and so on, they would exhaust the entire population of the United States before long.  Herbalife and its senior distributors must know that this strategy is unsustainable.[5]
• Please refer to the Stanford Report, pp. 7-10, for descriptions of the recruiting scripts, website registration services, and variety of guides and presentations that Success Connection provides to its members.
• From 2002 to 2005, the website www.successconnection.com linked to an “e-Book” promoting the Success Connection system.  See http://web.archive.org/web/20040830075925/http://www.successconnection.com/.

Other Success Connection Business Tools

• The e-Book, which is attached as Exhibit K, featured Tartol as an example of the “road map to success” and told distributors that he and his then-wife Lori “enjoy a seven figure income and love life!”

• The e-Book also told potential recruits to ignore detractors:

 Links to Other Senior Distributors

• As explained above (supra at 1), and in the Stanford Report, pp. 1, 14, Tartol runs the Success Connection along with Stanford, who is a member of the Chairman’s Club, and several members of Tartol’s family, including Tartol’s sister Mary Holloway and Tartol’s brother Jim and his wife Nancy, all of whom are members of the President’s Team.
• Tartol also frequently appears at Herbalife events and elsewhere with Herbalife’s highest ranking distributors.

Tartol with Founder’s Circle member Leslie Stanford (seated left), Founder’s Circle member Susan Peterson (seated second from right), and Chairman’s Club member Dan Waldron (standing left) at the Herbalife Extravaganza in October 2013.  See http://www.herbalifephotos.com/Extravaganza/2013-NAM-Las-Vegas/Home/Day3-Extravaganza-Training.

Tartol with Founder’s Circle member Geri Cvitanovich at the Herbalife Extravaganza in October 2013.

Tartol (left) with Herbalife founder Mark Hughes (second from left) and Founder’s Circle member and former member of the Herbalife board of directors Leon Waisbein (right) in 1996.

Tartol with President’s Team members Kellie and Glen Hosaka.  Tartol is holding a certificate showing that Herbalife paid him a Mark Hughes bonus (a discretionary bonus paid by Herbalife to top distributors) in the amount of $1,100,000.

Tartol with President’s Team member Debi Katz.

John Tartol with President’s Team member David Bevan.

“Me and one of my mentors, #Herbalife legend, John Tartol!”
See https://twitter.com/DavidBevanHLF/status/301997103469711362/photo/1.

• Tartol has taken a particularly hands-on approach to his relationship with senior Herbalife distributors David and Karen DeSaegher, who are part of Tartol’s downline.  Tartol has participated in dMk Team trainings (supra at 6), and we believe Tartol is often mentioned as a paramount example of Herbalife success on dMk Team conference calls.
• John Tartol is currently a member of Herbalife’s board of directors—a position he has held since 2005.

 Links to Herbalife Corporate Leadership

• SEC filings from April 2013, attached as Exhibit L, show that last year Tartol earned $75,874 in director’s fees and $2,974,981 in “other compensation,” and that he was awarded 109,994 stock options.
• Herbalife awarded Tartol the Mark Hughes Bonus Award—a large, discretionary bonus that Herbalife awards to top distributors—in 2007, 2008, 2010, 2011 and 2012.

• When Michael O. Johnson was first brought in as Herbalife’s CEO in 2003, he stated in an interview that John Tartol was “personally training” him.  See Exhibit M.

Herbalife CEO Michael O. Johnson (seated left) sharing a table with Tartol (seated right) at an Herbalife event  in 2013.

• Tartol is a featured speaker on Herbalife’s Chairman’s Club Tour, and appeared at Herbalife-sponsored events as recently as December 2013.

https://www.facebook.com/pages/John-Tartol-Herbalife/122030294489630#!/photo.php?fbid=10152094049769267&set=o.122030294489630

• In 2009, Tartol was among Herbalife’s “Top Ten Distributors in the World.”  See Exhibit N at 6.
• The Tartol family was profiled in a 2006 Spanish language edition of Herbalife Today, attached as Exhibit O, at 6-7.
• In 2004, Tartol, along with a number of other senior distributors, was a featured “Star” at the Herbalife University.  Herbalife announced in promoting the event that Tartol had “built an International business around the world!”

• In 2003, Tartol, along with CEO Michael O. Johnson and Founder’s Circle member Susan Peterson, was part of the Wealth in Wellness tour.  Herbalife announced in promoting the event that Tartol was a “Former struggling musician now multimillionaire!”

• When Tartol qualified for the Chairman’s Club in 2000, Herbalife profiled Tartol and his family in Herbalife Today, a magazine published by Herbalife.  (A copy of the magazine is attached as Exhibit P, see pp. 1, 3-4.)  The magazine quotes Tartol as saying that “[i]n less than one year, we were earning $10,000 a month.”  The article further notes that it only took Tartol and his then-wife three years to become President’s Team members, and includes a quote from Tartol that “[d]istributors can make it even faster today than we did.  There are so many more sales and marketing tools now and a support system everyone can plug into.”

• In the same issue of Herbalife Today in 2000, Herbalife announced its entry into Ireland.

• Despite Tartol’s statement that new distributors “can make it even faster today than we did”—three years to President’s Team—ten years later, not a single Irish distributor had even reached Millionaire Team.  (2010 Statement of Average Gross Compensation of Irish Supervisors attached as Exhibit Q.)

Other Businesses

• John Tartol took over as the sole officer of Herbal Care Inc. in 2008.  Herbal Care is registered in Texas (Filing Number:  0012076080, tax report attached as Exhibit R).  The tax report uses the address 4527 Mahogany Lane, Copper Canyon, TX 75077.
• Tartol is the listed agent for La’Bu, Inc.  La’Bu is registered in California (Filing Number:  C2086121, registration attached as Exhibit S).  The registration filing uses the address 213 W. Wild Willow Dr., Francis, UT 84036.
• Tartol is one of three listed officers for Sommerset Limited Partnership, along with Fairfield Development Co. and Stanton Dosett II, both of Shreveport, LA.  Sommerset is registered in Louisiana (Charter Number:  34101296J, registration attached as Exhibit T).  The registration filing uses the address 101 Milam Street, Shreveport, LA 71101.