Trump was likely thinking of Buffett when he began casting around for a similar company to buy in 2008. He came to Ideal Health through his longtime lawyer Jerry Schrager, who caught DeCaprio doing a business presentation in New York. DeCaprio is a veteran of the network-marketing scene, along with his partners, brothers Todd and Scott Stanwood. They’d all worked for Nu Skin, another vitamin and skin-care purveyor, during the time it expanded from small domestic operation into a $2 billion global company, and became motivated to strike out on their own. Ideal Health, which they’ve run for fourteen years, thrived in large part because of the rapport DeCaprio has with prospective marketers.
“Lou can see my success years from now and paint a picture for me, which is amazing,” Alex says. “He’ll say, ‘You’re going to be my youngest, most successful person in the company.’ He can just see it.”
DeCaprio’s visions aren’t always accurate, according to one former Ideal Health marketer, who says she paid $12,000 to film an infomercial with a company Ideal Health had partnered with because DeCaprio promised it would “take her business to the next level.”
The infomercial never aired, says the woman, a single mother from Michigan, and thus began a process of disillusionment. “In the beginning, I thought it sounded like a pyramid scheme,” she says. “But then I would go to the meetings and just be taken up by the excitement.” After the infomercial incident, she began to wish she had trusted her initial instincts. One of the products she says she distributed for Ideal Health, Supreme Greens, was involved in a lawsuit by the FTC for false claims that it cured cancer. And a Freedom of Information Act request from a lawyer she hired revealed there were dozens of FTC complaints against Ideal Health from people, some of whom claimed they’d been told they’d make money and lost thousands of dollars.
DeCaprio says these losses are often indicative of a failure on the part of the marketers, not the company. “Many times, if people aren’t having success in recruiting,” he says, “it has to do with not believing in themselves.”
The former marketer thinks this is simply manipulation. “If you fail, you think it’s your fault, like, ‘Oh, I didn’t believe in myself enough.’ I can’t believe Donald Trump put his name on that company.”
The people at the Trump Network are trained to defend against allegations that it’s a pyramid scheme. Toward the end of Izzo’s seminar, we break into pairs to practice what to say when potential invitees suggest the business is a pyramid scheme. My partner is Billy, a former Wall Street trader who has worked his way up to “diamond director,” one of the highest levels in the company. The levels are determined by the number of people you recruit and the amount of products you and your downline purchase. “What’s a pyramid scheme?” he asks me. “Like the food pyramid? Like the Catholic Church? What about where you work? If you ask me, corporate America is a pyramid scheme. All the people on the top make all the money. The people at the bottom are spinning their wheels.”
Then he plays his Trump card: “You think Donald Trump would involve himself in a pyramid scheme?”
The line between network-marketing companies and pyramid schemes is thin but definite. If you only make money by recruiting other marketers, it’s a pyramid scheme. Trump Network marketers get a $100 to $225 bonus for each person they sign up, and a bonus of $10 to $125 for each person they sign up (depending on the level). They also make between 4 to 7 percent commissions from products sold in their downline. For an aggressive salesperson, it can add up. Billy has recruited twelve people, including his sister, who have recruited an average of eight people. He’s made enough money from the program to keep him from having to sell his house, he says, and it’s all based how big he’s grown his network. But he insists it’s not a pyramid scheme. “There’s a product,” he reminds me.
Trump, too, is adamant about that distinction. “With this company, I let it be known right from the beginning,” he tells me. “Product first. Marketing second.”
In the past, network-marketing companies have been targeted by the FTC for making claims about how much income a person can make, which is probably why the Donald is careful to point out the program won’t necessarily make you rich. “This is supposed to be a second income for people,” he says. “This is not about them quitting their job.” Though “for some of them, it might lead to that.”