America’s highest paid CEO accused of running ‘ponzi scheme’

America’s best paid chief executive has been accused of duping some of the world’s poorest people out of $3.8bn (2.4bn) in “the best-managed pyramid scheme in the history of the world”.

Michael Johnson has been accused of misleadingly implying that his Herbalife empire of self-employed salespeople could all become millionaires selling dieting supplements door-to-door.

Bill Ackman, a famous activist investor, launched an extraordinary attack on Johnson and said he had made it his “patriotic” duty to bring the company down.

Ackman claims that 1.9 million Herbalife salespeople from Arizona to Zambia have failed to make money since the company was founded 32 years ago. Each sales recruit would have paid about $2,000 for supplies and training, which Ackman said meant they had collectively lost $3.8bn. Last year Johnson earned $89m, according to financial researchers GMI Ratings.

In a three-and-half hour presentation entitled “how to be a millionaire” Ackman, founder and chief executive of hedge fund Pershing Square Capital Management, accused Herbalife of running a modern day “ponzi scheme”.