Milk-Culture Promoter Wins Round in Court
Activator Supply Co., the Las Vegas-based promoter of a nationwide milk-culture-growing investment program, has resumed operations after winning the latest round in its legal battle with the City of Las Vegas.
In a Nevada state court Thursday, the company, which sells a culture-growing kit destined for use in a line of cosmetics, was granted a temporary restraining order against the city. The city had shut down the company Feb. 5 because it was operating without a business license, and on Feb. 12 had denied its application for a license.
Thursday’s court order permits the company to resume shipping cultures to its 800 or so investors around the country.
Other Investigations
Activator Supply Co. and two other companies promoting the milk culture investment program are under investigation by state attorney general’s offices in California, Nevada, Oregon and Kansas. Investigators say the company’s business plan, which requires a minimum investment of $350, may violate state laws against pyramid sales programs because investors are paid for recruiting new investors. A similar culture-growing operation was shut down by South African government officials late last year.
In Las Vegas, city officials said the company’s application for a business license was denied because Roland Nocera, Activator Supply Co. president, failed to disclose a prior arrest and conviction on a securities fraud charge. The 1977 charge was in connection with Holiday Magic Inc., a defunct San Rafael, Calif.-based cosmetic company. Nocera served as president of the firm from 1970 to 1973.
“We found Nocera unsuitable for licensing in Las Vegas,” said Jim DiFiore, a city business license investigator, in a telephone interview Friday. DiFiore said his office will continue arguing against the issuance of a license for Activator Supply at a Las Vegas City Council hearing scheduled for March 6.
Hearing Set March 14
A state court hearing on Activator Supply’s request for a permanent injunction against the city is set for March 14, according to Tom Bell, an attorney for Activator Supply.
Investors buy the culture-growing kits from Activator Supply and sell the dried packets of culture to Culture Farms Inc. of Lawrence, Kan., for prices ranging from $6 to $10 a packet.
“There is no reason for us not to have a license,” Nocera said in a telephone interview Friday. He said city officials apparently are frightened by the publicity surrounding the various state investigations. He said every grower has been paid and “if anyone is worried, we give them their money back right away.”
Nocera said his culture-growing sales program is legitimate because the cultures are destined for use in a line of cosmetics called Cleopatra’s Secret. Cleopatra’s Secret recently moved its operations from Reno, Nev., to Palm Springs. A television advertising campaign for the cosmetics is scheduled to begin in April.
Meanwhile, Anaheim police officials said sales presentations for the culture-growing program are continuing in that city following Monday’s arrest of Zelbert Ritchie, a principal in Premiere Concepts, a local agent for Activator Supply. A complaint filed by the Anaheim city attorney’s office charges Ritchie with 13 counts of fraud. Ritchie’s pretrial hearing has been set for March 7.
