"If Herbalife has tracked its 2012 sales data in such granular detail, that should greatly assist the SEC in their investigation."

— The Salty Droid

If this is what it takes to make it to the top of the Herbalife pyramid — establishing your own Internet Marketing-based biz opps, without even the pretense of selling products — then it’s clear that systems like Dahl’s Income At Home must have the tacit approval of the company. And if Herbalife’s immense profitability is "based primarily on recruiting," not on "profits from any real investment or real sale of goods to the public," then we have the Federal Trade Commission’s definition of a pyramid scheme.

When asked about this, Julian Cacchioli, Vice President of Worldwide Corporate Communications at Herbalife, sent an official statement via email.

"In 2012," he wrote, biz opps like Online Business Systems and Income At Home "represented less than one percent of our sales." He added that the number of vendors using "registered business methods" — the Herbalife term for approved biz opps — is "steadily decreasing."

When posed a similar question on a stockholder conference call last year, an Herbalife representative was either unable or unwilling to disclose the percentage of Herbalife products sold to distributors versus the percentage sold to the general public because, the rep claimed, "we don’t have visibility to that level of detail." Yet now, somehow, the company has a sufficient level of detail to determine much more precisely the complicated statistics regarding how many distributors use companies like Income At Home versus those who don’t.

Jason Jones, the lawyer and consumer advocate behind The Salty Droid (and no fan of Herbalife himself) was relieved to hear that the company had become more forthcoming with its data.

"If Herbalife has tracked its 2012 sales data in such granular detail," he said in an email, "that should greatly assist the SEC in their investigation."

And if it is true that very few distributors use the preferred Shawn Dahl sales model, the distributors using this model seem to overwhelmingly belong to Herbalife’s top 1.4 percent of sales leaders at the company. That includes Dahl himself and, relatively recently, the small group of Herbalife distributors behind a scheme called Newest Way To Wealth — a sham biz opp forced to pay victims $6 million as part of a 2004 class action lawsuit settlement.

For years, Herbalife has been keeping a list of approved biz opps — which it calls Business Methods. In fact, a company policy statement urges distributors against "purchasing or using Business Methods (including, but not limited to, advertising and leads) from any person or company that has not registered them with Herbalife."

An anonymous forum post from January 2010 lists 28 such companies registered with Herbalife for its Business Methods list. This list includes Centurion Media Group, Income At Home, and Online Business Systems. As we conducted this investigation, however, an internal Herbalife memo started making the rounds. Titled "Business Methods Registration Advisory," it seemed to show that the list had dwindled down to two in only three years.

It also offered a surprising warning: "Effective immediately, [Shawn Dahl’s Centurion] is no longer a registered provider. This means that you may not purchase, sell, endorse, recommend, promote or use anything from [Centurion]."

We asked Cacchioli, Herbalife’s spokesman, if this might put Shawn Dahl’s status as a Chairman’s Club-level distributor at risk. Instead of answering our question, Cacchioli denied that Dahl was connected to Online Business Systems, Income At Home, or Centurion.

"Mr. Dahl," he wrote, "has advised us that the links you have provided reflect contact details which are long out of date and should have been updated by the respective parties many years ago. He has also confirmed that he has no ownership or financial interest in these businesses."

That’s difficult to believe. As we’ve seen, Shawn Dahl is prominently featured in promotional videos for Online Business Systems, and his biographical information is front-and-center on its website. Dahl’s personal blog connects him to both biz ops, as well as Online Business Systems webinars from as recently as last July. There are also organizational calls he spearheaded as recently as November, his Income At Home "podcast" (it’s more of a radio spot), and a ton of other web links connecting him to Centurion and its "business opportunities."

Again, it doesn’t take much sleuthing to figure out that Dahl is clearly involved with Centurion and its schemes. This is Shawn Dahl the Chairman’s Club member, one of Herbalife’s top .0001% distributors. If Herbalife is attempting to distance itself from Income At Home, it’s doing a terrible job.

Herbalife has been working tirelessly to scrub the web of all connections between itself and the shady firms that use its name to bilk people out of thousands.

Barron Hansen, in the meantime, hasn’t sat idly by while Herbalife experienced this major public shakeup. In fact, he took a page from the Shawn Dahl playbook and started building websites.

In January 2012, after his ill-fated conversation with an Income At Home distributor, he started Income At Home Exposed, which is devoted to telling his story and sharing what he saw as a fraudulent business targeting vulnerable people. The site’s content has continued to branch out. He now owns his own constellation of "exposed" sites, including Shawn Dahl Exposed, Online Business Systems Exposed, and Centurion Media Group Exposed.

As his own network has grown, Hansen says, Herbalife has been working tirelessly to scrub the web of all connections between itself and the shady firms that use its name to bilk people out of thousands. One need look no further than the way that Centurion’s changed the registrar on a number of its sites. While the Better Business Bureau listed Shawn Dahl as a principle of Online Business Systems until February 3, that title now goes to someone named Nicole Whelan. As of December 23, Dahl was listed as the administrative contact for the Centurion Media Group website. That title now goes to Juliana Chambers, who shares a name with the wife of Trinidad and Tobago's former prime minister. That Juliana Chambers died in October.

Ackman’s hedge fund, Pershing Square Capital Management, hired Hansen to do freelance research for the company between January and March of this year. At times, he worked 80 or 90 hours a week, he says, in the hopes that Pershing would help the world would hear his message.

And that message is simple.

"I think they should be in chains," Hansen said, referring to Dahl, Herbalife, and the groups associated with business methods and the misleading lead generation tactics of Income At Home and Online Business Systems.

"I think they should be prosecuted."

UPDATE: Hours after this story was published, Income At Home scrubbed Herbalife from its website. The footer on the biz op site changed magically from "an online method of operating an Herbalife International distributorship" to "an online method of operating a Vemma independent distributorship."

It's embarrassing how little searching it takes to discover that Vemma is basically Herbalife without all the negative media attention from hedge fund managers and federal investigative agencies. Income At Home, for that matter, is not the first biz op brand to flee Herbalife in the wake of recent pyramid scheme accusations. Anthony Powell, a former Herbalife President's Team member, jumped ship in January to the same company.

This should tell you a couple things: First, Herbalife is collectively very pissed that Income At Home is being so flagrantly outed as a pyramid scheme. Second, Herbalife is just part of a much larger point here — namely, that multilevel marketing companies, no matter how legitimate they may seem, often do little other than enable these sketchy biz ops designed to con people out of hard-earned money. Keep that in mind as this story moves forward.

The Verge has reached out to Herbalife's spokesman as several email addresses associated with Income At Home, the Centurion Media Group, and Shawn Dahl. Responses will be posted if and when we receive them.