By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
Gary Lewellyn sits behind a massive wooden desk holding a telephone to his ear, but says nothing. From his Carrollton warehouse, the chairman and chief executive officer of Performance Nutrition, Inc. is a guest on a nationally syndicated USA Today Radio Network talk show, "Here's To Your Health." But even as the star of a thinly veiled infomercial he paid for, Lewellyn has to wait for the conclusion of a commercial break before he can tout his company's newest product, KidsPLEX Jr.
It's a rare moment of silence for the charismatic salesman.
Selling a month's supply for $29.95, Lewellyn promotes the powdered food supplement--on radio stations, television shows, and anywhere he can attract attention--as a possible treatment for the troubling and growing population of children diagnosed with Attention Deficit Disorder (A.D.D.). As the concern about A.D.D. grows, Lewellyn finds he is getting more free air time--on news and talk shows--to push his product. KidsPLEX, Lewellyn claims, represents a "safe option" for children faced with the prospect of taking Ritalin, the central nervous system stimulant now widely--and controversially--prescribed by doctors for A.D.D.
If Lewellyn, who also markets a food supplement for athletes, has truly found an alternative to Ritalin, his timing couldn't be better.
In recent months, Ritalin has become an ominous buzzword among parents of school-age kids. ABC's 20/20, CBS's 60 Minutes, Newsweek, and hundreds of newspapers have all recently run stories debating concerns in the medical and educational communities about the overuse of Ritalin and the frequent misdiagnosis of A.D.D. Although neurological, the disease is not linked to any specific physical brain characteristic or genetic pattern. Instead, doctors evaluate behavior to determine if a child has A.D.D.
Newsweek's March 18, 1996, cover, "Ritalin: Are We Overmedicating Our Kids?" reported that most pediatricians spent less than half an hour evaluating a child before prescribing Ritalin. Newsweek suggested more than 1 million U.S. children were on Ritalin. Another study, published in the Hastings Center Press, estimated 2 million children were taking the drug. All the evidence suggests an explosive increase--more than 500 percent in five years, according to Hastings Center Press--in use of the drug. Critics say many kids needlessly suffer the unpleasant side effects of Ritalin--sleeplessness, loss of appetite, possibly stunted growth, and the risky, habit-forming relationship with pharmaceuticals--when they could just as easily see their situations improve with better parenting, classroom methods, or, Lewellyn claims, regular use of his product, KidsPLEX.
"Put it in a blender, add a banana; if it doesn't taste good, it won't work," Lewellyn advises, finishing out his hour on the radio talk show.
Moments after Lewellyn says goodbye to the show's host, Lewellyn's secretary enters his office, her hand extended with a yellow sticky note. All 12 of the company's 800 lines had lit up immediately following the broadcast.
"When it's there, it's hot," he says, holding up the Newsweek cover. The 47-year-old Lewellyn expects his 8-year-old publicly traded company, which reported $4.2 million in revenues last year, to sell $50 million worth of food supplements in the next couple years--with a good portion of that increase coming from KidsPLEX sales. But, as with all products in the burgeoning food-supplement industry, KidsPLEX is subject to neither U.S. Department of Agriculture nor Food and Drug Administration efficacy tests. Instead, users must decide for themselves if the product is effective.
Lewellyn says he intends to announce, within the next few weeks, a deal with a Midwestern company that has transformed an abandoned Sam's Club retail facility into an amateur sports arena, offering three-on-three basketball and in-line skating. With that so far publicly unnamed company, Lewellyn plans to renovate in the next two years some 16 to 24 empty former Sam's stores nationwide, including an abandoned building in Irving. The arenas will also serve as retail outlets for manufacturers of sporting goods and food supplements like his own.
To realize these bold proposals, Lewellyn needs money. He has scheduled a private placement of $1.5 million in equity for his company, which has some 8 million shares outstanding and trades in the OTC (Over the Counter) market. By fall, Lewellyn, who says he has a roughly 10 percent equity interest in Performance Nutrition, also wants to register his company with NASDAQ.
But Performance Nutrition's success also works against Lewellyn: The more people who hear about his product, the greater the possibility that someone will remember his past.
In 1982, Lewellyn, then a 32-year-old star stockbroker who had managed the Des Moines offices for E.F. Hutton & Co., was convicted in federal court of embezzling $16.7 million from the tiny Humboldt, Iowa, bank where his father was president. The Des Moines Register referred to Lewellyn's misdeeds as "one of the most spectacular white-collar crimes in state history." His father's financial institution, The First National Bank of Humboldt, folded after Lewellyn's scam.
Lewellyn used the money he took from the bank in an elaborate scheme to pump up the price of certain stocks, ultimately prompting the Securities and Exchange Commission to bar him permanently from the brokerage business.
For three weeks before he finally turned himself in, Lewellyn eluded authorities after driving to Las Vegas in his lemon-yellow Rolls Royce. He attracted the attention of Time, The New York Times, and publications around the world when he tried to use gambling addiction as a defense. A federal judge quashed that strategy before the trial.