Terra Sigillata

The Wall Street Journal reports that a top Mannatech (Wikipedia, corporate) distributor has been found guilty of not paying federal income taxes.

He [Raymond Gebauer] became an associate in 1994 and his sales network, operating through companies he owned, was still signing up associates this year, said Karyn Johnson, assistant U.S. attorney in Seattle. He was a featured speaker in March at the annual national sales conference, MannaFest. In his book, “How to Cure and Prevent Any Disease,” Mr. Gebauer said that he owned a million-dollar home, a ski boat and drove a Lexus RX 300.

Kind of reminds me of, “My name is Elmer J. Fudd, millionaire – I own a mansion and a yacht.

But, sorry, things are not all fun and games for the company:

His indictment represents a potential blow to the supplement seller. Last month, the Texas Attorney General’s office asked a state court to bar the company from making what it said were false claims that its products — many made from aloe-vera — can cure, treat or heal diseases. The company is also facing shareholder lawsuits with similar allegations.

The lack of tax payments does not appear to be a simple oversight or a failure to file an extension:

The jury found that Mr. Gebauer failed to file taxes from 1998 through 2001. During that period, his gross income exceeded $3.5 million, most of which was earned through his network’s sales of Mannatech products, Ms. Johnson said. Mr. Gebauer owes at least $316,000 in taxes for those four years, she says, and last filed a tax return in 1996. He could face 20 years in prison when he is scheduled for sentencing in November…

…During his trial, Mr. Gebauer argued that paying taxes is voluntary.

If only.

But 20 years in prison seems pretty stiff for $316K in back taxes. There must be more to the case.

Anyway, we wrote about Mannatech’s problems with the law a few months ago as pointed out by the WSJ, again by writer Suzanne Sataline. I assume she’ll be keeping close tabs on developments in this case.


  1. #1 OtisMozzetti
    August 15, 2007

    According to the WSJ, there were “718,000” of the lower-level distributors (and customers). Imagine the mayhem wreaked on the income tax system as those lower-level distributor / customers made out Schedule C tax returns claiming the expenses for their business or not-for-profit hobby.

  2. #2 Jake
    August 17, 2007

    Why is Mannatech in the “quackery” section of your site.

    Is there another nutrient company that has a flagship product that is so profound that 6 types of health professionals can earn Category 1 CME (Continuing Medical Education)units by studying it?

    Is there another nutrient company that has it’s flagship product currently undergoing clinical trials at the Royal Society of Medicine in London?

    Is there another nutrient company that has been invited to M.I.T. to present the science behind their products?

    Is there another nutrient company that has an award winning, peer-reviewed website dedicated to the science behind it’s products?

    Is there another nutrient company that has testified in front of the US Congress and the Colorado Sentate regarding how it’s flagship product effects the production of SELF MADE stem cells as well as overall immune function?

    Is there another nutrient company that has been awarded a first AND second place award from the Scripps Institute for Integrative Medicine?

    As you have probably guessed, I could go on and on…

    Quackery? I think not.

  3. #3 Jake
    August 17, 2007

    and another thing =) LOL

    Mannatech Fact Sheet – Evolution of Glyconutrients

    North America Sales 2006 – 74% (of total sales)
    International Sales 2006 – 26% (of total sales)
    Mannatech holds over 40 patents related to their proprietary ingredients and products.
    3 major collaborative pre-clinical studies are underway
    7 human clinical trials are either scheduled or currently in process
    Continuing research to further substantiate the benefits of glyconutrients
    In conjunction with Hyperion Biotechnology, they conducted research indicating that the human digestive tract CAN break down complex carbohydrates in their glyconutritional supplements
    Received 1st place in basic sciences category at Scripps Center for Integrative Medicine 4th annual conference, held on January 19-21, 2007
    Results of the study have been submitted and accepted for publication in the International Journal of Probiotics and Prebiotics
    Mannatech invested over $6.5 Million in Research and Development in 2006
    Quality Assurance – Full in-house R&D and QA Departments
    Every Mannatech product is thoroughly tested by two teams prior to release to provide their customers the absolute finest quality possible using validated test methods
    On-Site inspections and laboratory tests to guarantee the content of functional ingredients
    Clinical research on products to establish their efficacy
    Safety Monitoring System – Safety Compliance for Foods
    An Adverse Event Reporting System
    Product Education for Professionals and Consumers
    Strictly adheres to “Good Manufacturing Practices” (GMP’s) standards for human foods as recommended by the US Food and Drug Administration (FDA) http://www.cfsan.fda.gov/~dms/gmp-toc.html
    Continue to add unique, proprietary, patented products
    Skin Care – Japanese Formulated, Super-Hydrating, water-based, paraben-free enhanced skin care formulas with Anti-Bacterial Wellness Water
    PhytoMatrix™ – Unique, highly absorbable, 100% plant-digested, standardized vitamin/mineral/phytonutrient
    Global Seamless Downline Commissions
    New Oracle Enterprise Resource Planning (ERP) System – serving all our countries with the same integrated computer system
    Fully Integrated-Assisting International Growth- Global online registrations
    Targeting New Markets by opening new countries faster
    Revenue & Net Income Growth – 32% Compounded Annual Growth Rate – 2002 through 2005 in annual net sales
    Independent Associate Growth- 212,000 -1st Q 2003 – 553,000 1st Q 2007 – Active New and Continuing Associates and Members
    Auto Ship Rate approaching 80% for Domestic finished product
    Included in the S&P SmallCap 600 and the Russell 2000.
    Recognized by Forbes Magazine, in October 2006, as “the 5th Best Small Company in America”.
    #12 on BusinessWeek Magazine’s “Top 100 ‘Hot Growth’ Small Companies” and 4th “Best in Return on Capital” over 3 years
    Purpose Driven – Supporting MannaRelief Ministries in 70 countries

  4. #4 Hud Lainson
    August 18, 2007

    There is no drug or natural plant component that can or will heal, treat, or mitigate any disease. It is only the human body that does the miraculous job of healing. However, the human body does require the intake of certain nutrients to function properly. Drugs work on the symptoms while nutrients work at the cellular level (at the root cause of the health issue). Are there good drugs and do we desperately need drugs at times? Of course. But it is the broad use of drugs that is really a concern. There is a medical textbook “Harpers Biochemistry” that has chapter on biological plant sugars and the role they play in human health. Those of you that are so adament that a nutrient like that which is available at Mannatech is bad or hype I entice you to dig in and study. If you will just study scientific journal articles you will have to admit that this company is doing a great service to mankind by understanding and producing a nutrient product that truly is “The Next Generation of Health Science”. One more thing…..Do you think it is possible that big pharma is threatened by this little company with such an impact on human health? Maybe big pharma is putting the squeeze on Mannatech. Please do your research.

  5. #5 zoey
    August 18, 2007

    It’s amazing how when something like this comes up, the conspiracy theorists inevitably arrive with claims like– “oh big pharma is threatened.”

    I suspect Pharm Co’s are more concerned with other Pharma Co’s products that compete with their own, rather than companies like this that make unproven products that play on the public’s lack of understanding of science and cherry pick scientific abstracts that they do not understand to market products with bogus claims.

    I, for one, appreciate scientists, like Abel, who understand what they read in the scientific journals, and call things like this for what they really are: quackery!!! Of course, marketing things because they contain wonder substances like….”antibacterial wellness water” is a big enough clue for this non-scientist!!!

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