Jeunesse Pyramid Scheme - Sequence Inc

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Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 1 of 45 Page ID #:1123456TOM C. TSAY (SBN 180294)HELEN W. QUAN (SBN 207361)LAW OFFICES OF TOM C. TSAY, INC.208 E. VALLEY BLVD. #CSAN GABRIEL, CA 91776TEL: (626) 307-4198FAX: (626) 307-4199ATTORNEYS FOR PLAINTIFFS,NANCY WU, SHI HWA YUAN,ARLENE CHANG, AND FANG FANG HO78UNITED STATES DISTRICT COURT9CENTRAL DISTRICT OF CALIFORNIA10NANCY WU, an individual; SHI HWAYUAN, an individual; ARLENE12 CHANG, an individual; FANG FANG13 HO, an individual; individually and onbehalf of all others similarly situated,Case No. 2:17-cv-747511CLASS ACTION 7JEUNESSE, LLC, a Florida LimitedLiability Company; JEUNESSEGLOBAL, a Florida Company formunknown; JEUNESSE, INC. a FloridaCorporation; FUEL FREEDOMINTERNATIONAL; a business entityform unknown; US GLOBAL SYSTEM,a business entity form unknown; KIMHUI, an individual; RANDY RAY alsoknown as OGALE ERANDAL RAY, alsoknown as RANDY RAY LEWIS, anindividual; WENDY R. LEWIS, anindividual; SCOTT A. LEWIS, anindividual; MAY CHANG also known asMEI YUE CHANG also known as MEIYUEH CHANG, an individual;1. Fraud & Deceit;2. Fraudulent Concealment;3. Violation of Federal RacketeerInfluenced and CorruptOrganizations ("RICO") Sectionsof Title IX of the OrganizedCrime Control Act of 1970 18 U.S. C. §§ 1961-1968;4. Violation of Foreign CorruptPractices Act of 1977 (FCPA) 15U.S.C. § 78dd-1, et seq.;5. Violation of California’s FalseAdvertising Law (CaliforniaBusiness and Professions Code §17500);6. Violation of California’s EndlessChain Scheme Law (California’sPenal Code § 327 and CaliforniaCivil Code § 1689.2);7. Breach of an Implied Covenantof Good Faith and Fair Dealing;28-1–CLASS ACTION COMPLAINT

Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 2 of 45 Page ID #:21234YVONNE YEN also known as YI-WENYEN, an individual’ SAMSON LI, anindividual; LISA WANG, an individual;and DOES 1 through 100, inclusive,5Defendants.68. Negligent Misrepresentation;9. Civil Conspiracy;10.Violation of California’s UnfairBusiness Practices (CaliforniaBusiness & Professions CodeSections 17200, et seq.;11.Unjust Enrichment; and12.Declaratory Relief78DEMAND FOR JURY TRIAL9CLASS AND COLLECTIVE ACTION COMPLAINT1011121314AND NOW come plaintiffs NANCY WU, SHI HWA YUAN (“YUAN”),ARLENE CHANG, and FANG FANG HO, (collectively “Plaintiffs” or “NamedPlaintiffs”), on behalf of themselves and all others similarly situated (“ClassMembers” and “Sub-class Members”) and allege as follows:NATURE OF ACTION151.16171819202122232425262728This is a proceeding for declaratory relief and monetary damages toredress the deprivation of rights secured to Plaintiffs and all other former andcurrent distributors and recruiters of Defendants JEUNESSE, LLC, JEUNESSE,INC. , JEUNESSE GLOBAL, FUEL FREEDOM INTERNATIONAL (“FFI”)(collectively “JEUNESSE”), US GLOBAL SYSTEM (“USGS”) KIM HUI,RANDY RAY also known as OGALE ERANDALL RAY, also known as RANDYRAY LEWIS, WENDY R. LEWIS, SCOTT A. LEWIS, MAY CHANG alsoknown as MEI YUE CHANG also known as MEI YUEH CHANG, YVONNEYEN also known as YI-WEN YEN, SAMSON LI, LISA WANG, and DOES 1through 100, inclusive by Defendants’ violation of Federal and California statelaws.2.Named Plaintiffs sue for themselves and for all persons who wereJEUNESSE distributors and recruiters from April 2009 until the present under-2–CLASS ACTION COMPLAINT

Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 3 of 45 Page ID #:31California’s Endless Chain Scheme Law (California Civil Code § 1689.2),2California’s Unfair Competition Law (Business and Professions Code § 17200 et3seq. “UCL”), false and misleading income claims, False Advertising Law (Business4and Professions Code § 17500), Foreign Corrupt Practices Act of 1977 (FCPA) 155U.S.C. § 78dd-1, et seq., and Racketeer Influenced and Corrupt Organizations Act6(“RICO”), 18 U.S.C. § 1961 et seq. against all defendants for the operation and7promotion of an inherently fraudulent pyramid scheme.893.In connection with the acts and conducts alleged in this complaint(“Complaint”), Defendants, and each of them, and collectively as an organization,10directly and/or indirectly, utilize the mail, the wires, the internet, and the11instrumentalities of interstate commerce in carrying out the pyramid scheme, and12unlawful and fraudulent trade practices, which are subject of this action.134.As a consequence of Defendants’ unlawful conduct, named Plaintiffs14and all others similarly situated (“Class Members” and Sub-class Members) have15been prevented from their entitlements, have been deceived, and have suffered16damages.175.As a proximate and direct result of Defendants’ aforementioned18wrongful conduct, Named Plaintiffs and all Class Members have been damaged in19an amount to be proven at trial, but estimated to exceed 1,000,000,000.00. (one20billion dollars).JURISDICTION AND VENUE21226.The jurisdiction of this Court is invoked pursuant to 28 U.S.C. § 1331,2328 U.S.C. § 1343 (3) and (4) conferring original jurisdiction upon this Court of any24civil action to recover damages or to secure equitable relief under any Act of25Congress providing for the protection of civil rights; under 28 U.S.C. § 133726conferring jurisdiction of any civil action arising under any Act of Congress27regulating interstate commerce; and under 29 U.S.C. § 216(b) conferring28jurisdiction of any civil action arising under the RICO and FCPA.-3–CLASS ACTION COMPLAINT

Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 4 of 45 Page ID #:41This Court’s pendent jurisdiction for claims arising under applicable7.2state law is also invoked. Defendants hold themselves out and market to this3jurisdiction, and they conduct significant transactions in this jurisdiction.4Supplemental jurisdiction exists over the RICO, FCPA, California’s endless Chain5Scheme Law, California UCL, and California False Advertising Law.68.Venue is appropriate in this District since Defendants conducted7business in this District, and Named Plaintiffs conducted business with Defendants8in this District and a substantial part of the events or omissions giving rise to9Plaintiffs’ claims occurred here, a substantial part of the property that is the subject10of this action is situated here, and Defendants are subject to personal jurisdiction, in11this District.1213149.The Arbitration Provision in JEUNESSE’s Policy and Procedures isprocedurally and substantively unconscionable and unenforceable.10.JEUNESSE has a designated agent for service of process in the State15of California and the place of business here and has committed tortuous acts in16California, the United State, and globally.COLLECTIVE AND CLASS ACTION ALLEGATIONS1718192011.Plaintiffs re-allege and incorporate by reference herein all allegationspreviously made in Paragraphs 1 through 10, above.12.This is a class action complaint against Defendants to challenge their21policies and practices of multi-level-marketing (“MLM”) with a method of selling22and distributing goods and services, and recruiting new distributors through23network of people in the United States and worldwide.2413.Named Plaintiffs bring their RICO, FCPA, California’s endless Chain25Scheme Law, California UCL, and California False Advertising Law claims as a26collective action under 29 U.S.C. § 216(b), and their California, and other state law27claims as a class action under Federal Rule of Civil Procedure 23.28-4–CLASS ACTION COMPLAINT

Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 5 of 45 Page ID #:51214.3Plaintiffs declare that Defendants, their family members, and any4Diamond Distributor of JEUNESSE, Diamond Directors of JEUNESSE, and any5and all others obtained ownership interest of JEUNESSE are excluded from the6class.15.7Additionally, named Plaintiffs seek to represent a subclass of8individuals who were deceived or forced to pay for materials and events produced9by USGS and a subclass of individuals who work for USGS without compensation.16.10Moreover, named Plaintiffs seek to represent a subclass of individuals11who signed up with JEUNESSE under a pre-September 2015 Representation of12Compensation under the Income Disclosures (“Pre-September 2015 Compensation13Subclass”). This subclass are all persons who were JEUNESSE distributors and14recruiters in the United States from April 2009 to September 2015 and who15received a Pre-September 2015 Compensation Subclass.17.16Named Plaintiffs also seek to represent a sub-class in the United States,17defined as follows: “All persons who were JEUNESSE distributors for the purpose18of distributing JEUNESSE’s goods and services in the United States and working as19recruiters in the United States and globally for JEUNESSE for the purposes of20recruiting more recruiters from April 2009 until the present.”18.21Named Plaintiffs declare that Defendants, their family members, and22any Diamond Distributor of JEUNESSE, Diamond Directors of JEUNESSE, an any23and all others obtained ownership interest of JEUNESSE are excluded from the24class.2519.Additionally, Named Plaintiffs seek to represent a subclass of26individuals who deceived or forced to pay for materials and events produced by27USGS and JEUNESSE (“Pay for Materials and Events Fees to USGS Subclass”).2820.Named Plaintiffs also seek to represent a subclass of individuals who-5–CLASS ACTION COMPLAINT

Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 6 of 45 Page ID #:61deceived or forced to pay fees similar to “Union Dues” to USGS and JEUNESSE2(“Pay for Union Dues Subclass”).321.Also, Named Plaintiffs seek to represent a subclass of individuals who4work for USGS without compensation (“Work for USGS Without Compensation5Subclass”).622.Furthermore, Named Plaintiffs seek to represent a subclass of7individuals who paid “Packaging and Handling” and/or Shipping charges (the8“Packaging & Handling Subclass”) defined as follows: “All persons who were9JEUNESSE distributors in the United States from April 2009 to October 5, 201710and who paid ‘Packaging and Handling’ and Shipping charges before October 5,112017.”121314151623.The state law claims are properly maintainable as a class action underFederal Rule of Civil Procedure 23.24.The class action is maintainable under subsections (1), (2), (3) and (4)of Rule 23(a).25.The class size is believed to be over 100 distributors and recruiters.17While the exact number of members in the Class and Subclasses are unknown to18Named Plaintiffs at this time and can only be determined by appropriate discovery,19membership in the class and subclasses is ascertainable based upon the records20maintained by Defendants. It is estimated that the members of the Class are greater21than five hundred thousand (500,000) and each subclass easily number in the22hundreds of thousands.2326.Therefore, the Class and Subclasses are so numerous that any attempts24to file individual joinder of all Class and Subclass members are impracticable under25Fed. R. Civ. P. 23(a)(I).262727.Additionally, Named Plaintiffs seek to pursue a private attorneygeneral action (“PAGA”) for injunctive relief for themselves and all members of the28-6–CLASS ACTION COMPLAINT

Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 7 of 45 Page ID #:71class who agreed to a choice of law, and they satisfy the standing and class action2requirements.328.Common questions of law and fact exit amongst the class and subclass.4There are questions of law and/or fact common to the class and subclasses,5including but not limited to:6a.Whether JEUNESSE is operating an endless chain;7b.Whether JEUNESSE is operating with unlawful income claims;8c.Whether JEUNESSE’s operation and sustainability are based on910111213141516recruiting new recruiters, but not based on goods sold;d.Whether JEUNESSE’s rules apply to California Penal Code § 327claims;e.Whether JEUNESSE’s rules apply to California Civil Code § 1689.2claims;f.Whether Defendants omitted to inform the Plaintiffs and classmembers that they were entering into a pyramid scheme;g.Whether Defendants omitted to inform the Plaintiffs and class17members that Defendants were promoting a business opportunity that did not exist18except for a select few;19202122232425262728h.Whether Defendants omitted to inform the Plaintiffs and classmembers that they were entering into an endless chain;i.Whether Defendants omitted to inform the Plaintiffs and classmembers that a majority of distributors and recruiters lose money;j.Whether Defendants’ income claims during the Class Period weredeceptive and misleading;k.Whether Defendants’ medical claims related to JEUNESSE’s duringthe Class Period were deceptive and misleading;l.Whether JEUNESSE’s statements of compensation during the ClassPeriod were deceptive and misleading;-7–CLASS ACTION COMPLAINT

Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 8 of 45 Page ID #:8m.12charges to JEUNESSE were inflated;n.34o.p.q.r.Whether JEUNESSE’s conduct constitutes false advertising underCalifornia state law;s.1314Whether JEUNESSE’s conduct constitutes unfair competition underCalifornia state law;1112Whether JEUNESSE’s conduct constitutes an unlawful, unfair and/ordeceptive trade practice under California state law;910Whether JEUNESSE’s Income Disclosures during the Class Periodwere deceptive and misleading;78Whether Plaintiffs and class member paid Shipping charges toJEUNESSE were inflated;56Whether Plaintiffs and class member paid Packaging and HandlingWhether JEUNESSE’s conduct constitutes violation of California’sEndless Chain Scheme Law (California’s Civil Code § 1689.2);Whether Defendants’ business practice and operation are fraudulent15t.16and deceitful;17u.18Unfair Competition Law (Business and Professions Code § 17200 et seq. “UCL”);v.1920w.Whether Defendants’ conduct constitutes violation of Foreign CorruptPractices Act of 1977 (FCPA) 15 U.S.C. § 78dd-1, et seq.x.2324Whether Defendants’ conduct constitutes violation of FalseAdvertising Law (Business and Professions Code § 17500);2122Whether Defendants’ conduct constitutes violation of California’sWhether Defendants’ conduct constitutes violation of RacketeerInfluenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq.y.2526misconduct;27andWhether Defendants’ Unjustly enriched by the result of their28-8–CLASS ACTION COMPLAINT

Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 9 of 45 Page ID #:91z. Whether the Arbitration Provision in JEUNESSE’s Policy and Proceduresis procedurally and substantively unconscionable and unenforceable.2329.The Named Plaintiffs bring the fifth, sixth, and tenth claims (causes of4action) under the False Advertising Law (Business and Professions Code § 17500),5California’s Endless Chain Scheme Law California, and Business & Professions6Code Section 17200 (“UCL”) for Defendants’ violations of California’s laws on7behalf of the following proposed class, the members of which have all been8damaged by Defendants’ above-described conduct. Named Plaintiffs allege that9Defendants have engaged in unlawful patterns and practices of failing to meet the10requirements of the California Business and Professions Code, Endless Chain11Scheme Law, and False Advertising Law.1230.The proposed Class Members are brought, and may properly be13maintained, as class actions under Fed. R. Civ. P. 23(a), (b)(2), and (b)(3) and/or as14a representative action pursuant to the UCL, which must comply with the same15class action certification requirements as Fed. R. Civ. P. 23(a), (b)(2), and (b)(3).1631.Pursuant to those requirements, the Class Members are so numerous17that joinder of all members is impracticable. Common questions of law and fact18exist as to all members of the class that predominate over any questions affecting19individual members that whether Defendants violated Defendants have engaged in20unlawful patterns and practices of failing to meet the requirements of the California21laws, and the proper measure of damages sustained by Class Members and the22restitution owed to them.2332.Named Plaintiffs, like other Class Members, were subjected to24Defendants’ policy and practice under California law and Federal law. Named25Plaintiffs’ damages are also typical of other members of the class.262733.There are no known conflicts of interest between the named Plaintiffsand the other class members.28-9–CLASS ACTION COMPLAINT

Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 10 of 45 Page ID #:10134.Named Plaintiffs will adequately represent the interests of the Class2Members because they are similarly situated to the Class Members and their claims3are typical of, and concurrent to, the claims of the other class members.435.Moreover, the named Plaintiffs will fairly and adequately represent and5protect the interests of the putative members of the Class Members because they6have no disabling conflict(s) of interest that would be antagonistic to those of the7other Class Members.8936.Common questions of law and fact predominate in this action becausethe claims of all Class Members were distributors for Defendant JEUNESSE and10lost money because of the illegal scheme, each received false financial disclosures,11each received illegal income claims, each received false medical claims.1237.Named Plaintiffs will fairly and adequately represent the interests of13the subclasses.1438.Named Plaintiffs’ interest is also fully aligned with those of sub-15classes. And Named Plaintiffs have retained counsels who are competent and16experienced in class action litigation.17181939.Named Plaintiffs know of no difficulty likely to be encountered in themanagement that would preclude its maintenance as a class action40.Applying generally to the class in that it has common policies and20practices of unlawful patterns and practices of failing to meet the requirements of21the California and Federal laws, and the proper measure of damages sustained by22Class Members and the restitution owed to them.2341.Accordingly, injunctive and declaratory relief is appropriate for the24Class as a whole.2542.Class treatment is superior to alternative methods to adjudicate this26dispute because named Plaintiffs and all Class Members suffered similar treatment27and harm as a result of systematic policies and practices, and because absent a class28action, Defendants' unlawful conduct will likely continue un-remedied and- 10 –CLASS ACTION COMPLAINT

Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 11 of 45 Page ID #:111unabated given that the damages suffered by each of the individual class members2would be difficult compared to the expense and burden of individual litigation.THE PARTIES34A.Named Plaintiffs and Class Members543.Named plaintiff NANCY WU is a resident of Los Angeles County, and6is a distributor and recruiter for Defendants in California. NANCY WU became a7JEUNESSE distributor and recruiter in on August 13, 2014.89101144.Named plaintiff SHI HWA YUAN is a resident of Los Angeles County,and is a distributor and recruiter for Defendants in California. SHI HWA YUANbecame a JEUNESSE distributor and recruiter in July 16, 2011.45.Named plaintiff ARLENE CHANG is a resident of Los Angeles12County, and is a distributor and recruiter for Defendants in California. ARLENE13CHANG became a JEUNESSE distributor and recruiter in February 2011.1446.Named plaintiff FANG FANG HO is a resident of Los Angeles County,15and was a distributor and recruiter for Defendants in California. FANG FANG HO16became a JEUNESSE distributor in April 2014.1747.The Class Members are also those employees of Defendants who are18similarly situated, as defined above, and who suffered damages caused by19Defendants.20B.Defendants2148.Defendant JEUNESSE, LLC, is a Florida limited liability company,22with its principal place of business located at 650 Douglas Avenue, Suite 1010,23Altamonte Springs, Florida 32714.2449.Defendant JEUNESSE GLOBAL is a Florida company, form25unknown, with its principal place of business located at 650 Douglas Avenue, Suite261010, Altamonte Springs, Florida 32714.272850.Defendant JEUNESSE, INC. is a Florida corporation, with its principalplace of business located at 650 Douglas Avenue, Suite 1010, Altamonte Springs,- 11 –CLASS ACTION COMPLAINT

Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 12 of 45 Page ID #:121Florida 32714.251.Defendant FUEL FREEDOM INTERNATIONAL, LLC (“FFI”) is3based in Altamonte Springs, Florida and is co-owned by RANDY RAY and4WENDY R. LEWIS.56752.Defendant US GLOBAL SYSTEM is a California business entity,form unknown. USGS is a company operating under the label of JEUNESSE.53.Defendant KIM HUI is a resident of California and a Triple Diamond8distributor, a Triple Diamond Director and a “Presidential Diamond Director” .Defendant RANDY RAY also known as OGALE ERANDALL RAY,also known as RANDY RAY LEWIS (“RANDY RAY”) is a Florida resident and isa manager/officer for JEUNESSE, and co-founder of JEUNESSE.55.Defendant WENDY R. LEWIS (“WENDY LEWIS”) is a Floridaresident and is a manager/officer for JEUNESSE, and co-founder of JEUNESSE.56.Defendant SCOTT A. LEWIS (“SCOTT LEWIS”) is a Florida residentand is the Chief Visionary Officer for JEUNESSE. He has also serves a VicePresident of Operations.57.Defendant MAY CHANG also known as MEI YUE CHANG alsoknown as MEI YUEH CHANG (“MAY CHANG”), is a resident of California, aDiamond distributor and a Diamond Director in JEUNESSE.58.Defendant YVONNE YEN also known as YI-WEN YENG(“YVONNE YEN”) is a resident of California, a Double Diamond distributor and aDouble Diamond Director in JEUNESSE.59.Defendant SAMSON LI is a resident of California, a Double Diamonddistributor and a Double Diamond Director in JEUNESSE.60.Defendant LISA WANG (“LISA WANG”) is a resident of California,a Diamond distributor and a Diamond Director in JEUNESSE.28- 12 –CLASS ACTION COMPLAINT

Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 13 of 45 Page ID #:13161.Defendants collectively are an organization engaged in interstate2commerce whose annual gross volume of sales is not less than 1,000,000,000.003(one billion dollars).462.At all times relevant hereto, Defendants, and each of them, were the5agents, employees, managing agents, supervisors, co-conspirators, parent6corporation, joint employers, alter ego, and/or joint ventures of the other7Defendants, and each of them, and in doing the things alleged herein, were acting at8least in part within the course and scope of said agency, employment, conspiracy,9joint employer, alter ego status, and/or joint venture and with the permission and1011consent of each of the other Defendants.63.Named Plaintiffs are presently unaware of the true identities and12capacities of fictitiously named Defendants designated as DOES 1 through 100, but13will amend this complaint or any subsequent pleading when their identities and14capacities have been ascertained according to proof. On information and belief,15each and every DOE defendant is in some manner responsible for the acts and16conduct of their Defendants herein, and each DOE was, and is, responsible for the17injuries, damages, and harm incurred by Plaintiffs. Each reference in this complaint18to “defendant,” “defendants,” or a specifically named defendant, refers also to all of19the named defendants and those unknown parties sued under fictitious names.2064.Named Plaintiffs allege that Defendants JEUNESSE, LLC,21JEUNESSE, INC. FUEL FREEDOM INTERNATIONAL, US GLOBAL SYSTEM22are corporations, in essence, incorporated or operated by Defendants KIM HUI,23RANDY RAY, WENDY LEWIS, as their alter ego, primarily to circumvent24statutes, laws, and government regulations, to accomplish wrongful business25practice, to defraud government, and to take advantages of other individuals and26entities.272865.Named Plaintiffs allege that, at all times herein mentioned, theindividual Defendants sued herein:- 13 –CLASS ACTION COMPLAINT

Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 14 of 45 Page ID #:14a.1held, and do now hold, substantial, if not all, interest in saidcorporate Defendants;2b.3dominated, controlled, and influenced, and does now dominate,4control, and influence, said corporate Defendants, their officers, their5businesses and their properties;c.6used said corporate Defendants, since their incorporation to7present, as a mere shell and naked framework and conduit for conducting8their personal business and/or property affairs, and/or as obligor for the9assumption of obligations and/or liabilities incapable of performance by10the corporate Defendant, which are in fact the personal obligations and11liabilities of said individual Defendant;d.12created the corporate Defendants pursuant to a scheme, plan and13design conceived by said individual Defendant to perpetuate fraudulent14acts whereby the corporate Defendants’ income, revenue and profits15would eventually be funneled to, and converted by, said individual16Defendant; ande.17have such a unity of interest and control between themselves and18the corporate Defendants such that the individuality and separateness of19said corporate Defendants and of said individual Defendant have ceased.20Adherence to the fiction of the separate existence of said corporate21defendants would improperly sanction inequity and promote injustice.GENERAL ALLEGATIONS222366.Named Plaintiffs allege that, Defendants have been engaged in24continuous and systematic illegal MLM business in California, United States, and25globally by and through several business entities, namely JEUNESSE, LLC,26JEUNESSE, INC. JEUNESSE GLOBAL, FUEL FREEDOM INTERNATIONAL,27US GLOBAL SYSTEM.2867.Named Plaintiffs allege that, Defendants, MAY CHANG, YVONNE- 14 –CLASS ACTION COMPLAINT

Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 15 of 45 Page ID #:151YEN, SAMSON LI, LISA WANG, KIM HUI, RANDY RAY, WENDY LEWIS,2and SCOTT LEWIS, along with unnamed Diamond Distributors and Directors,3were part of leadership team that participated with JEUNESSE and USGS, and4made decisions regarding products, services, marketing strategy, compensation5plains, incentives, income claims, medical claims, recruit seminars, and other6matters.768.Named Plaintiffs allege that Defendants are running an illegal pyramid8scheme because only those who get in first, at the top of the pyramid structure, with9backroom deal, and/or with special privilege, can make money and everyone else is10destined to lose.1169.Named Plaintiffs allege that Defendants omitted to inform the12Plaintiffs and all Class Members that Defendants were promoting a business13opportunity that did not exist except for a select few get in first, at the top of the14pyramid structure, with backroom deal, and/or with special privilege.1570.Named Plaintiffs further allege that, each of the Defendants named16herein acted as co-conspirator, single enterprise, joint venture, co-conspirator, or17alter ego of, or for, the other Defendants with respect to the acts, omissions,18violations, representations, and common course of conduct alleged herein, and19ratified said conduct, aided and abetted, or is other liable.2071.Defendants have agreements with each other, and other unnamed21Diamond director co-conspirators and have reached agreements to market and22promote JEUNESSE’s MLM business model with pyramid structure and endless23chain as alleged herein.2472.Defendants, along with unnamed Diamond Directors, and all co-25conspirators, were part of the leadership team that participated with JEUNESSE,26and made decisions regarding: products, services, marketing strategy, compensation27plans, (both public and secret), incentives, income claims, medical claims, and other28matters. In addition, Defendants and unnamed co-conspirators were directly and- 15 –CLASS ACTION COMPLAINT

Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 16 of 45 Page ID #:161actively involved in decisions to develop, create, and promote the distributor2agreements and compensation plans for JEUNESSE.373.Defendant JEUNESSE was founded in 2009.474.Since its inception in 2009, JEUNESSE’s sales have doubled every5year. JEUNESSE claims that it has over five hundred thousand (500,000)6distributors with global sales of more than 1,000,000,000.00 (one billion dollars).789101175.JEUNESSE provides a catalogue of alleged “youth enhancing” skincare products and advanced “fountain of youth” dietary supplements to customers.76.JEUNESSE claims to be using an “advanced interactive e-commercemodel” for its distributors to run an online shopping business.77.The so-called “advanced interactive e-commerce model” is actually12multi-level payment schedule paid to JEUNESSE through the multi-level13distributorship.1478.1516Simply put, the multi-level distributors of JEUNESSE are the actualconsumer/end-users, who must recruit others to enter as lower level distributors.79.However, the more distributors who join JEUNESSE’s MLM17operation, the greater the consumer/end-user groups become, and the bigger the18pyramid scheme becomes.1980.JEUNESSE’s method of MLM operation constitutes a pyramid scheme.2081.The following facts support the pyramid scheme allegations:21a.JEUNESSE marketing plan favored recruitment over product22sales. In a video published online, Defendant KIM HUI, one of the top23and senior distributors, Triple Diamond and Presidential Diamond24Directors in JEUNESSE, claims that her success is all about recruitment,25but not from selling product;2627b.JEUNESSE’s distributors and recruiters must invest money fortheir entitlement to recruit new distributors and recruiters;28- 16 –CLASS ACTION COMPLAINT

Case 2:17-cv-07475 Document 1 Filed 10/12/17 Page 17 of 45 Page ID #:17c.1JEUNESSE’s distributors and recruiters get their investmentback by recruiting new distributors and recruiters;2d.3JEUNESSE’s instructions to its distributors and recruiters, at4all times, has been centered around recruitment, recruitment, and5recruitment;e.6JEUNESSE’s distributors and recruiters are the actualcustomers and ultimate users of its products;

current distributors and recruiters of Defendants JEUNESSE, LLC, JEUNESSE, INC. , JEUNESSE GLOBAL, FUEL FREEDOM INTERNATIONAL (“FFI”) (collectively “JEUNESSE”), US GLOBAL SYSTEM (“USGS”) KIM HUI, RANDY RAY also known as OGALE ERANDALL RAY, also known as RANDY RAY LEWIS, WENDY R. LEWIS

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