Mark R. Hughes

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Mark R. Hughes
M R. Hughes.jpg
Born (1956-01-01)January 1, 1956
La Mirada, California
Died May 21, 2000(2000-05-21) (aged 44)
Malibu, CA
Known for Founding Herbalife
Parent(s) Jack Reynolds
Jo Ann Hughes (d. 1975)

Mark Reynolds Hughes (January 1, 1956 – May 21, 2000) was an American businessman who was the founder, chairman, and CEO of Herbalife International Ltd, a multi-level marketing company.

Early life[edit]

Hughes was born in Los Angeles County, California in 1956. He was born to father Jack Reynolds and mother Jo Ann Hughes. His parents divorced in 1970, when Mark was 14, and his mother retained custody of Mark.

At this point, the family survived on welfare payments with Hughes' mother suffering from "emotional problems." She battled obesity and tension via amphetamines and sleeping pills.[1] In the ninth grade Hughes dropped out of school and began using drugs himself. "I was a little delinquent," he says. "I got in trouble with the law."[1][2] At 16, he was sent to CEDU High School, a private residential school for troubled youngsters in Running Springs, CA whose origins were associated with Synanon, a group founded in 1958 and later described as a cult.[1][3][4][5] Part of Hughes' CEDU rehab required him to raise money by selling raffle tickets. Hughes became the school's best salesman. "The approval there was based on how much funds you raised," Hughes told People magazine in 1985. "There was a lot of pressure, and I wanted to be the best right away."[1]

Hughes was 19 years old and still working for CEDU when his mother died in her apartment of a accidental drug overdose on April 27, 1975.[6] According to the autopsy report, several empty vials of prescription drugs were found beside her bed, and her doctor told the coroner she "was known to over-ingest her prescription drugs."[6] Toxicological tests showed potentially lethal levels of the painkiller Darvon in her system.[7]

Pre-Herbalife career and first marriage[edit]

In 1976, the 20-year-old Hughes began selling diet products for Seyforth Laboratories, a multilevel marketer, becoming one of its top 100 earners. After Seyforth collapsed in 1979, Hughes then sold exercise equipment and weight-control products for a company called Golden Youth, also a direct-sales outfit. It was while working for Golden Youth in 1979 that Hughes met Kathryn Whiting, the first of four beauty pageant winners he would marry on the beach. Whiting, a former "Miss Santa Monica," was then a 21-year old college student pursuing a degree in medical science. When Golden Youth also went out of business, Hughes decided to start his own operation.[8][1][9]

Career[edit]

In February 1980, aged 24, Hughes founded Los Angeles-based Herbalife International. It has since become one of the world's largest distributors of herbal products through multi-level marketing, with sales of about $3.5 billion in 2007 and 2.1 million Independent Distributors. Now in 95 countries and achieving record retail sales of $7.5 billion in 2013 according to company statements.[10]

In the mid-1980s, Hughes was sued by the Food and Drug Administration, the California attorney general's office, and the state Department of Health, over what they said were false health claims about Herbalife products and the various schemes used to market them.[11] Health agencies accused the company of violating labeling standards and using improper sales practices.[6]

Regulators contended that the company was making medicinal claims. Medicines are regulated by the F.D.A., while nutritional supplements are not. Some health experts doubted the efficacy of Herbalife products, saying that in some instances they relied too heavily on laxatives and caffeine.[6]

In March 1985, the California attorney general and the state Department of Health Services charged him and Herbalife with making "untrue or misleading" product claims—primarily involving the caffeine content of some Herbalife products—and operating an "endless chain marketing scheme."[6]

Prompted by complaints alleging that Herbalife product users had suffered illness and death, a U.S. Senate subcommittee called Hughes before a hearing in May. Referring to a panel of nutrition experts who had criticized Herbalife in testimony the previous day, he asked the senators, "If they're such experts in weight loss, why were they so fat?"[6]

During the hearing, Hughes acknowledged that his own formal education stopped at the 9th grade. When asked during the hearing how he could be qualified to challenge leading medical experts, Hughes responded: "I defy anybody to be able to produce results as this company has."[12]

Hughes reached settlements with the regulatory agencies in 1986. To settle his problems with the state, Hughes agreed to pay $850,000. At the time, the California attorney general, John Van De Kamp, was quoted in The Wall Street Journal as saying it was the largest settlement ever attained from a health products company.[7]

In December 1991, Hughes' and his third wife, Suzan Hughes, had a son, Alexander Reynolds "Alex" Hughes.[13]

Death[edit]

On the night of Saturday, May 20, 2000, Hughes celebrated the 87th birthday of his maternal grandmother, Hazel (known as Mimi). It was a private gathering with a few family members joining him at his mansion in Malibu for the evening. Out of the public limelight, Hughes drank white wine, smoked a cigar and played his drum set.

Hughes was trying to buy up all outstanding shares of Herbalife and take the company private once more. The stress and long hours had taken a toll on his health; he was recovering from a recurrence of pneumonia. The treatment involved corticosteroids, which made sleeping difficult. His physician prescribed the drug doxepin, a tricyclic antidepressant, for the insomnia.

On May 21, 2000, authorities said that Mark Hughes died of an accidental overdose after mixing alcohol with a "toxic level" of antidepressants. Scott Carrier, of the Los Angeles County Coroner's Office, said final autopsy results found that Hughes, 44, had ingested a toxic combination of alcohol and Doxepin, an antidepressant he was taking to help him sleep.[7] His blood-alcohol level was measured at 0.21.[14]

Hughes' then 9-year-old son, Alexander "Alex" Hughes, was named sole beneficiary of his father's estate, estimated to be worth $400 million. Hughes's will stipulated that, until Alex turns 35, the bulk of his inheritance would be held in a trust managed by Jack Reynolds (Alex's paternal grandfather), attorney Conrad Klein, and Herbalife executive Christopher Pair.[15][16] In 2006, the Los Angeles Superior Court ruled to remove Reynolds from supervising a $35 million custodianship after finding that he violated multiple probate laws by ceding control to Klein and commingling Alex's personal assets with partnership accounts.[17] Reynolds was suspended,[17] but remained one of three trustees until 2013, when a judge in a separate lawsuit ordered the removal of all three for breaching the terms of the Trust by mismanaging the funds.[18] After the removal, Alex chose Fidelity investment company to oversee the fund – a decision that was later reversed in a California Court of Appeal.[19]

References[edit]

  1. ^ a b c d e "Despite Critics and Lawsuits, Herbalife Has Made Mark Hughes Wealthy If Not Healthy". Retrieved 2017-03-16. 
  2. ^ "Safety, Methods Questioned : Herbalife: Weighty Profits and Government Probes". Retrieved 2017-03-16. 
  3. ^ "The Cult That Spawned the Tough-Love Teen Industry". Mother Jones. Retrieved 2016-03-17. 
  4. ^ "Synanon -CEDU - Brown Schools Medical Whistleblower". medicalwhistleblowernetwork.jigsy.com. Retrieved 2016-03-17. 
  5. ^ "The History of Synanon and Charles Dederich". www.paulmorantz.com. Retrieved 2016-03-17. 
  6. ^ a b c d e f Shuit, Douglas P. (May 22, 2000), "Mark Hughes, Founder of Herbalife, Dies at 44", Los Angeles Times, retrieved November 28, 2016 
  7. ^ a b c Copage, Eric V. (May 23, 2000), "Mark R. Hughes, 44; Founded Nutrition Supplement Concern", The New York Times, retrieved November 28, 2016 
  8. ^ "Herbalife's Mark Hughes" (PDF). Retrieved 2017-03-16. 
  9. ^ "Death and Denial at Herbalife". Retrieved 2017-03-16. 
  10. ^ Copage, Eric V. (2000-05-23). "Mark R. Hughes, 44; Founded Nutrition Supplement Concern". The New York Times. ISSN 0362-4331. Retrieved 2017-06-07. 
  11. ^ "Herbalife And Mark Hughes - A Success Story?". ExplosiveMLM.com. Retrieved 2017-06-07. 
  12. ^ Jackson, Robert L. (May 16, 1985), "Testifies at Stormy Senate Hearing: Herbalife President Calls Diet Powders, Pills Safe", Los Angeles Times, retrieved November 28, 2016 
  13. ^ Heller, Matthew (February 18, 2001), "Death and Denial at Herbalife", Los Angeles Times, p. 5, retrieved November 28, 2016 
  14. ^ "Autopsy on Herbalife founder finds death caused by accidental overdose", CNN, June 17, 2000, archived from the original on November 10, 2014 
  15. ^ Townsend, Mark (September 17, 2005), "Legal battle rages around America's richest teenager", The Observer, The Guardian, retrieved November 28, 2016 
  16. ^ Cumings, Stephanie (September 30, 2015), "Herbalife Heir Can't Object to Settlement Agreement", Bloomberg BNA, The Bureau of National Affairs, Inc., retrieved November 28, 2016 
  17. ^ a b Heller, Matthew (November 13, 2006), "Judge Fires Custodian of Herbalife Heir's $40 Million", On Point News, Courthouse News Service, retrieved November 28, 2016 
  18. ^ McEvoy, Ciaran. "Trustees Kicked From Herbalife Founder's $330M Estate". Law360. Retrieved November 28, 2016. 
  19. ^ "C.A. Orders New Trustees of Herbalife Founder's Fortune". Metropolitan News-Enterprise. 9 August 2017. Retrieved 29 July 2018. 

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