FTC began investigating Advocare in November 2016 after learning of social media comments about the firm's practices and about its recruitment pitches posted online. Aaron Haberman, an FTC attorney in its southwest regional office, said the firm has "hundreds of thousands" of distributors nationwide.

During the briefing, Haberman said starting as a distributor, or as an "advisor," for Advocare costs $2,100 "out of pocket" in product purchases that must be made within six weeks. "Once you were at the advisor level, you had continual purchasing requirements as well," he said.

The large majority of Advocare advisors, said Smith, didn't recover "what they invested in the scheme much less make a profit."

"There will always be a huge number of participants at the bottom of a pyramid who cannot earn enough to cover their investment," he added.

The FTC filed its complaint against the firm, its former CEO, Brian Connolly, and four top promoters the same day it announced the settlement. Connolly and the firm agreed to pay the $150m fine and to be banned from multi-level marketing.

Two of the promoters also settled charges that they promoted the scheme and misled consumers about their income potential, agreeing to a multi-level marketing ban and a $4m judgment that will be suspended when they surrender substantial assets. However, two other top AdvoCare promoters are contesting the same charges the commission made against them.

The promoters' touted "millions of dollars working part time from home,"" Smith said. "But most [distributors] make less than $250 a year."

Advocare Out Of Pyramid Scheme, Into Single-Tier Sales Under FTC Settlement

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