Mark R. Hughes

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Mark R. Hughes
M R. Hughes.jpg
Born
Mark Stuard Hughes

(1956-01-01)January 1, 1956
DiedMay 21, 2000(2000-05-21) (aged 44)
Occupation
  • Businessman
  • founder
  • chairman
  • CEO
Spouse(s)Darcy LaPier
Parent(s)Stuard Hartman
Jo Ann Hughes (d. 1975)

Mark R. 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 La Mirada, California in 1956, the son of Stuard Hartman and Jo Ann Hughes.[1] 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.[2] 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."[2][3] 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.[2][4][5][6] 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."[2]

Hughes was 19 years old and still working for CEDU when his mother died in her apartment of an accidental drug overdose on April 27, 1975.[7] 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."[7] Toxicological tests showed potentially lethal levels of the painkiller Darvon in her system.[8]

Career[edit]

Hughes began his career in 1976 at Seyforth Laboratories selling diet products. He spent three years there and was listed as one of the company's top 100 earners.[9]

In 1976, after Seyforth Laboratories shut down, he joined Golden Youth, a direct-sales outfit that sells exercise equipment and weight-control products. When Golden Youth went out of business, Hughes decided to start his own operation.[10][2]

In February 1980, aged 24, Hughes founded Los Angeles-based Herbalife International. It has since become one of the world's largest distributors of Herbalife 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.[11]

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.[12] Health agencies accused the company of violating labeling standards and using improper sales practices.[7]

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.[7]

In March 1985, the California attorney general and the state Department of Health Services charged he 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."[7]

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?"[7]

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."[13]

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."[8]

Personal life[edit]

In 1979, Hughes met Kathryn Whiting, a former Miss Santa Monica, who would become his first wife. They divorced in 1984 and in the same year, he married Angela Mack, a former Swedish beauty queen.[14]

In September 1987, Hughes married Suzan Schroder, a former actress, court reporter and Miss Petite U.S.A.[14] In December 1991, Hughes' and his wife, Suzan Hughes, had his sole son, Alexander Reynolds "Alex" Hughes.[15] Suzan filed for divorce from Hughes in September 1997.[16]

In February 1999, Hughes married Darcy LaPier, an American actress and model. Their marriage continued until his death the following year on May 21, 2000, at his home in Malibu, California.[14]

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.[8] His blood-alcohol level was measured at 0.21.[17]

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.[18][19] 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.[20] Reynolds was suspended,[20] 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.[21] After the removal, Alex chose Fidelity Investments to oversee the fund – a decision that was later reversed in a California Court of Appeal.[22]

Philanthropy[edit]

Mark and Suzan established the Herbalife Family Foundation (HFF) in 1994, a non-profit organization dedicated to improving vulnerable children's lives through helping charity organizations meet the nutritional needs of children at risk, and providing funds to organizations that assist victims of natural disasters.[23][24][25]

References[edit]

  1. ^ "THE UNCERTAIN START OF A REMARKABLE LIFE". Los Angeles Times. February 18, 2001. Retrieved April 6, 2021.
  2. ^ a b c d e "Despite Critics and Lawsuits, Herbalife Has Made Mark Hughes Wealthy If Not Healthy". Retrieved March 16, 2017.
  3. ^ "Safety, Methods Questioned : Herbalife: Weighty Profits and Government Probes". Retrieved March 16, 2017.
  4. ^ "The Cult That Spawned the Tough-Love Teen Industry". Mother Jones. Retrieved March 17, 2016.
  5. ^ "Synanon -CEDU - Brown Schools Medical Whistleblower". medicalwhistleblowernetwork.jigsy.com. Retrieved March 17, 2016.
  6. ^ "The History of Synanon and Charles Dederich". www.paulmorantz.com. Retrieved March 17, 2016.
  7. ^ 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
  8. ^ 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
  9. ^ "Death and Denial at Herbalife". Retrieved March 16, 2017.
  10. ^ "Herbalife's Mark Hughes" (PDF). Retrieved March 16, 2017.
  11. ^ Copage, Eric V. (May 23, 2000). "Mark R. Hughes, 44; Founded Nutrition Supplement Concern". The New York Times. ISSN 0362-4331. Retrieved June 7, 2017.
  12. ^ "Herbalife And Mark Hughes - A Success Story?". ExplosiveMLM.com. Archived from the original on April 26, 2019. Retrieved June 7, 2017.
  13. ^ 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
  14. ^ a b c "Death and Denial at Herbalife". Los Angeles Times. February 18, 2001. Retrieved April 7, 2021.
  15. ^ Heller, Matthew (February 18, 2001), "Death and Denial at Herbalife", Los Angeles Times, p. 5, archived from the original on October 5, 2018, retrieved November 28, 2016
  16. ^ "Beverly Hills' $1 Billion "Vineyard": The Bizarre Saga Behind L.A.'s Last Real Estate Trophy". The Hollywood Reporter. September 2, 2015. Retrieved April 7, 2021.
  17. ^ "Autopsy on Herbalife founder finds death caused by accidental overdose", CNN, June 17, 2000, archived from the original on November 10, 2014
  18. ^ Townsend, Mark (September 17, 2005), "Legal battle rages around America's richest teenager", The Observer, The Guardian, retrieved November 28, 2016
  19. ^ 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
  20. ^ a b Heller, Matthew (November 13, 2006), "Judge Fires Custodian of Herbalife Heir's $40 Million", On Point News, Courthouse News Service, archived from the original on December 19, 2008, retrieved November 28, 2016
  21. ^ McEvoy, Ciaran. "Trustees Kicked From Herbalife Founder's $330M Estate". Law360. Retrieved November 28, 2016.
  22. ^ "C.A. Orders New Trustees of Herbalife Founder's Fortune". Metropolitan News-Enterprise. August 9, 2017. Retrieved July 29, 2018.
  23. ^ "Nezavisni Herbalife Član - DanijelXenya". danijelxenya.com. Retrieved April 7, 2021.
  24. ^ "Herbalife family foundation renews its partnership". www.phnompenhpost.com. Retrieved April 7, 2021.
  25. ^ "NGO gets funds to feed needy children - Khmer Times". June 8, 2018. Retrieved April 7, 2021.

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