Medifast is either a great way to slim down or a big, fat Ponzi scheme, depending on which ex-con you believe.
On one side: An inmate-turned-fraud-investigator you've never heard of, Barry Minkow, who says the Owings Mills weight-loss products firm is scamming customers.
On the other, the inmate-turned-radio-host you do know, Ed Norris, who says the diet's working for him.
So far, Wall Street has sided with Minkow - if only because the street hasn't seen Norris in his skinny jeans. Medifast saw its stock shed value last week like celebrity pitchwoman Genie Francis sheds weight.
(Apparently when you're no longer fighting off Luke Spencer at the General Hospital disco, the pounds can pile up. But thanks to Medifast, Francis is down 43 pounds. And thanks to the purported fraud-buster, company stock is down 36 percent.)
Minkow spent seven years behind bars for stock fraud and conspiracy. He claims to have seen the light and become a fraud investigator. It takes a thief, right? His San Diego-based Fraud Discovery Institute came out with a report last week on Medifast's direct-selling division, Take Shape for Life.
"No other meal replacement company ventures into a customer's personal financial life as an integral part of its diet regimen," the report states. "Its prescription for how to achieve 'healthy finances' is specific. It means signing up as a Take Shape for Life 'coach,' an unpaid, independent distributor, authorized to recruit other coaches in an endless chain pay incentive plan."
In a conference call with investors, Medifast CEO Michael McDevitt defended the business model as legitimate, The Baltimore Sun's Lorraine Mirabella reported. Medifast also suggested that Minkow could be up to more stock-market shenanigans, by selling Medifast shares short just as his report drove down their value.
The for-profit Fraud Discovery Institute's own Web site acknowledges: "Barry Minkow almost always holds a position in securities reported on, or profiled by, FDI websites. Neither FDI nor Mr. Minkow will report when a position is initiated or covered."
So where does all this leave Norris, the former Baltimore police chief who also did time and went on to become a popular radio host?
At least as far as I can tell over the radio. In about five weeks, Norris has lost more than 20 pounds on Medifast, he's told WHFS listeners.
Norris and Maynard, his single-named sidekick, noticed they'd gained weight since moving to the morning drive-time slot in November.
"We'd find ourselves having pizza at 7 o'clock in the morning," Maynard told me. "And not just a slice of pizza. But a pizza. ... We're looking at each other and saying, 'Dude, we've got to do something. We're fat.'
"We went to our sales department like good radio DJs - 'Anything we can get for free? Is there a client that's interested? We want to do something where we can do it on the air and have fun with it.' "
They hooked up with Medifast, and it's been a success, Maynard said. (I couldn't reach Norris, but Maynard vouched for the commish's improved figure.)
"I've lost 26 pounds, and Eddie's lost 21 pounds," Maynard said. "In all honesty, I'm sold on the stuff."
Now, the radio duo is looking for a new Medifast recruit, though not in a Ponzi-scheme sorta way. As a station promotion, they are offering to put someone on the Medifast program for eight weeks. (The five Medifast mini-meals a day normally cost about $300 a month, Maynard said.)
Listeners were calling in last week, vying to be chosen, just as the Fraud Discovery Institute report came out. Maynard said he'd only heard a little bit about the allegations and wasn't worried.
Medifast "could be as crooked as an old man," he said, "but their product works."
And golf cart thrill riders
Robert Wildrick has found something besides lucrative consulting work to do in retirement: politics.
The former Jos. A. Bank CEO won election this month to the Palm Beach Town Council, The Palm Beach Post reports.
Wildrick retired Jan. 31 but remains company board chairman and has an $850,000-a-year consulting gig with the clothier.
Why not run for office right here in Charm City? Wildrick did not respond to messages seeking comment.
I'm guessing it's easier work down there. The Post endorsed Wildrick and in so doing, described some of the civic challenges he'll have to tackle: "Palm Beach has its issues: beach erosion, water, redevelopment."
Connect the dots