XanGo

Executives 2008–2012

Gary Hollister, founder, chairman emeritus, former chief executive, former chairman of the Board

Aaron Garrity, founder, chairman of the board, CEO, former president

Joe Morton, founder, board of directors

Gordon Morton, founder, board of directors

Kent Wood, founder, board of directors

Revenues 2003–2012

Xango was a privately held company and as such did not publicly disclose its financial statements. Company press releases in 2005–2006 stated that sales totaled $40 million in 2003 and $150 million in 2004, and that 2005 sales were more than twice those of 2004. In October 2007 the company said that cumulative sales since its inception five years earlier were over $1 billion and by November 2008 had exceeded $1.5 billion.

In December 2012, Direct Selling News reported that Xango concluded its first ten years of operation in November 2012 with sales operations in 43 countries, 27 office locations, 49 distribution centers, more than two million distributors, and about $2 billion in cumulative revenues. Xango's revenues and annual reports have fueled much public and legal speculation that it is a pyramid scheme.

Xango Juice was sold in the U.S. and (as of late-2011) exported to Australia, Canada, Germany, Japan, Malaysia, Mexico, Singapore, Sweden, and the United Kingdom. The company began operating in Taiwan as of October 2007.

The company's business model was direct sales via multi-level marketing rather than retail sales, mainly using a nine-level multi-level marketing structure. In June 2006, the company said it had 350,000 distributors. In July, the company told the Federal Trade Commission that there were "roughly 500,000 distributors worldwide", and in November, it reported having more than 600 employees at its Lehi headquarters and more than 500,000 independent distributors in 15 international markets. In July 2007, it said it had about 700,000 distributors, of whom an estimated 70 percent simply use their status to buy the juice at the discounted membership price. In October 2008, it said that it operated in 24 countries and had more than 1 million independent distributors. As of 2013, the company stated that it operated in 43 countries.

In the United States, Xango Juice sold for a retail price of $37.50 for a 750 ml (25.35 ounce) bottle.

Xango Juice composition

Xango Juice was a blend of mangosteen aril and pericarp purée with juice concentrates of eight other fruits: apple, pear (juice and purée), grape, blueberry, raspberry, strawberry, cranberry and cherry. Other ingredients include citric acid, natural flavor, pectin, xanthan gum, sodium benzoate, and potassium sorbate. Xango claimed its juice contains xanthonoid compounds from the mangosteen pericarp.

Italian antitrust action

In 2011, Italy's antitrust and consumer protection authority, the AGCM, suspended the activities of Xango in response to over-broad health claims, as well as possible violations of pyramid scheme laws.

Litigation

Tahitian Noni International

Tahitian Noni International (TNI), a rival MLM beverage company, sued Xango, LLC, and several of its top executives in February 2003 in the 4th District Court in Provo, Utah, alleging that Xango executives stole TNI's concept for a mangosteen-based supplement while they were employed by TNI's parent-company. After a countersuit against TNI was launched by Xango, LLC, the two parties settled out of court. A joint statement by TNI and Xango said that they had "agreed to resolve their disputes and the litigation between them and their founders" but the particulars of the settlement were not disclosed.

Mismanagement allegations

In 2009, the Utah Supreme Court allowed a Xango investor to proceed with a lawsuit that alleges corporate looting and mismanagement of millions of dollars by the Lehi supplements company's founders for their personal expenses including luxury cars and performance-enhancing medical treatments. The Utah Supreme Court overturned a 4th District Court ruling that dismissed a lawsuit filed in 2007 by Angel Investors LLC alleging Xango's founders took millions of dollars in personal loans from the company and paid themselves excessive salaries while wasting corporate assets. In 2010, XanGo settled with Angel Investors for an undisclosed amount of money. "Angel Investors, who had owned no more than 1 percent of the Lehi company, had charged in three lawsuits in Utah County that the founders deprived them of some of the return on their investment. The group cited such expenditures as $6,000 monthly auto allowances, family vacations and, in one case, $20,000 worth of home furnishings." The terms of the settlement were not disclosed.

In 2013, Xango founder Bryan Davis filed a lawsuit accusing his partners of spying, threatening employees, falsifying distributor positions to siphon off funds, defrauding on Xango taxes and their personal taxes, falsifying records, changing credit card statements, charging as business expenses to purchase grand pianos, vacations, home renovations, landscaping, electronics, expensive bicycles, scooters, and for CEO Aaron Garrity, an open expense account for one mistress.

According to the lawsuit, Garrity embezzled hundreds of thousands of dollars in assets from the company, writing off clothing, medical enhancements, jewelry, event tickets, bicycles, electronics and chartered planes and vacations as business expenses. CFO Nate Brown set up secret founder accounts for Garrity and others to allow them to improperly spend Xango assets. Garrity's attorney refuted the claim, saying the allegations are to help Davis inflate his share holdings for a greater profit.

Also in 2013, Xango filed an action against Bryan Davis in the Third Judicial District Court (Utah and Salt Lake City) refuting Mr Davis' claims in his lawsuit and claiming that Mr Davis was negligent in his duties. Xango settled these cases ultimately, out of court for an undisclosed amount.