Dr. Scott Connelly wants the world to believe he’s the foremost authority on health and nutrition, particularly when it comes to protein science. He’s best known as the creator of MET-Rx, the popular meal replacement that became a sensation in the 90’s, and was endorsed by star athletes, including Troy Aikman.
On the verge of bankruptcy, Connelly sold MET-Rx to the Shansby Group for $10 million. Shansby turned around and sold it for $108m to Rexall Sundown in 1999. Scott Connelly resurfaced only to fail miserably, attempting to sell protein enriched dog food, K9-Rx, using his signature, shirtless ab-shot next to fido – how weird is that?
It doesn’t end there. Scott Connelly had a partner in MET-Rx (actually many), but Bill Phillips was his marketing brainchild, who went on to start EAS, and later sold it to Abbott for $320 million. Phillips wrote a book as well, entitled Body for Life, which became a New York Times bestseller. Connelly sadly didn’t do so well with his copycat book, Body-Rx, which hardly sold at all.
WGFE — The Magic Ingredient
The culmination of Connelly’s achievements came in 2009 when he duped Midwest farmers and ranchers in (of all places) Dodge City, Kansas, out of more than $1m for a phony medical scheme. Claiming to have a billion-dollar, bone-healing chocolate drink, Connelly fabricated his control of this supposed magic ingredient, known as Whey Growth Factor Extract or (WGFE).
WGFE turned out to be nothing more than a variation of lactoferrin, which is easily obtained around the world. Connelly claimed WGFE was his magic “black bag” of “dairy bioactive fractions,” but then exchanged it for a domestic ingredient, failing to notify the manufacturer of WFGE that he was going to steal their patent data and put it on his label. No, you can’t make this stuff up.
These discoveries came after Connelly settled in as Founder, CEO and chairman of the board, pampering himself with a $220k salary, first-class air travel, and a plan to compete against his own company.
What the Investors Are Saying
In a public declaration, one investor states that he and his brother represent the largest single investors in Progenex Dairy Bioactives (by subscription through VenturePharma), after Connelly and Shared Success. He states:
“I listened to Connelly talk about his background, his companies, his research, and his education. Connelly personally ‘pitched me’ and solicited me for investing in the company. I spent over three hours in conversations with Connelly and thereafter my family and I invested over $250,000 in Progenex. After investing my money I learned that Dr. Connelly was no longer interested in working with VenturePharma and Progenex.”
So, let’s get this straight . . . he spent the time to pitch how great he is, got the guy to take the bait, and suddenly became no longer interested in the company. That’s some kind of scam! In another investor’s declaration to the Superior Court of California in the case against Connelly he states:
“In a conversation with Connelly, I specifically remember him telling me ‘I will sell one of my jets for $3,000,000 to use for legal costs against the company. The company will go bankrupt.’ I understood this to mean that if he became involved in litigation against Progenex, he had more money to withstand lengthy and expensive litigation and would bankrupt the company.”
Connelly’s Sweet Deal
Set up as Chief Executive Officer, Connelly signed a detailed contract that stated he wouldn’t compete with any product being developed or sold by the new company, would work to further the reputation and standing of the company, and so forth. Pretty basic stuff, right?
One would think that those conditions wouldn’t be hard to keep. Not so for Connelly, who (it appears) never had any intention of remaining true to his word.
Connelly arranged a great deal for an old crony of his, Vince Andrich, to be hired as the new company Executive Vice President of Sports Marketing, to head up its sports division. This finagling was all done so that both Connelly and Andrich could work behind the scenes to launch the competing brand.
The Next Step — Body-Rx
Enter Body-Rx (yes, same name as the book), pitched by Connelly to his investors as a non-competing foodstuff distributor that makes protein-fortified candy bars, pizza and cereal. Unfortunately, that wasn’t exactly the plan.
Connelly used (or abused) his position as CEO for the medical company to leverage and abscond with contacts, investor prospects, professional athletes relationships, client lists, and the proprietary protein-delivery device he pledged to the company for both divisions.
This Body-Rx development and promotion was in direct violation of contributions of assets and use of likeness to the company, which Andrich helped to facilitate.
Resignations and Sabotage
In April of 2010, Dr. Scott Connelly resigned from Progenex Dairy Bioactives (but not before locking them out of their own customer database) and suggested that Andrich be made a board member in his place due to his apparent conflict. At that point, the company had no idea what Connelly was doing. After Connelly left, he and Andrich continued to use the company’s resources to further the brand of Body-Rx.
In fact, Connelly even went so far as to try to sabotage the company’s relationships with suppliers and clients. Why? Because he wants those suppliers and clients for himself, of course. That’s the obvious conclusion.
In the meantime, those remaining in charge of the company began to get suspicious. Things all came to a head when an email turned up that pretty much proved Connelly’s intention to sabotage the business.
Bring on the Lawsuits
Lawsuits hit Connelly and fido – and Andrich – with a thud, which turned ugly fast, and the situation evolved into a finger pointing contest. Another fraudster, named Anthony Connors/Anthony Roberts (we’re not even sure of his real name!) worked some spin-doctoring defending Connelly on forums and other social media platforms.
In an attempt to muddy the waters, Connors/Roberts accused the company of threatening him, and even tried to pull in some completely irrelevant accusations about someone who doesn’t even work for the company.
This was all in an effort to draw attention away from the fact that Dr. Scott Connelly intentionally and maliciously set out to compete against his own company with Body-Rx, and to undermine the investors and management that bet on him.
Luckily, if you read the four corners of the complaint against Connelly, it’s not hard to see who’s on first. The lawsuit is filed on behalf of VenturePharma, LLC; Shared Success, LLC; and Progenex Dairy Bioactives, Inc., and focuses on Connelly’s intentional conspiracy to compete with Body-Rx and usurp corporate opportunities.
Connelly’s Past Comes Back to Haunt Him
Let’s backtrack a bit and clear the air regarding Dr. Scott Connelly’s past. True, he’s no angel . . . in fact, he has a very long and detailed history of fraud, breach of contract, and even malpractice, going back all the way to 1990. And that is just what turns up in a cursory public search in Orange County, California.
Of course, a single lawsuit being filed would not imply a pattern of practice, but there are 21 cases that have been filed against him. It’s obvious that fraudulent, deceptive behavior comes naturally to Dr. Connelly.
The good news here is that Progenex has a sports nutrition division that is flourishing, which luckily had nothing to do with Connelly, and as a result has taken the athletic marketplace by storm, growing exponentially. Since Connelly and Andrich left, sales have increased ten-fold – so this story does have a happy ending, after all.