Fast forward 20 years: In 2018, the property was renamed "The Mountain of Beverly Hills". But Mark's Herbalife stock wasn't his only source of wealth. "[78] In a separate review published less than a year earlier, the same author described the relationship between Herbalife products and reported hepatotoxicity cases as "highly probable". TIMES STAFF WRITER. Among the fallout has been the near financial ruin of Herbalifes top supplier, which has endangered the jobs of 1,000 workers in Orange County. Herbalife filed a suit in Los Angeles County Superior Court claiming that Rosen misused company funds when he hired a financial analyst who allegedly did little corporate work. Coroner spokesman Scott Carrier said an autopsy revealed Hughes' blood-alcohol level at the time of his death was .21 percent, nearly three times the legally defined level of intoxication. Richard Marconi, who created the first Herbalife products 20 years ago and until recently was Herbalifes biggest nutritional supplement supplier, filed a breach-of-contract lawsuit against Herbalife in Orange County Superior Court. It must have been painful for Alex to know he couldn't touch the bulk of his fortune for a few decades, but to make matters worse, Alex and his mother Suzan became worried that the trustees were totally mismanaging the estate. [10][2], In February 1980, aged 24, Hughes founded Los Angeles-based Herbalife International. [33], In March 2020, John Agwunobi was named as its next chief executive. [41] Since 2013, the company has operated a botanical extraction facility in Changsha, Hunan Province, China. [57], In a California class action suit (Minton v. Herbalife International, et al.) Autopsy on Herbalife founder finds death caused by accidental overdose. This is a very nasty type of hardball to be playing. LOS ANGELES Herbalife founder Mark Hughes died accidentally, the result of a lethal combination of alcohol and an antidepressant, the Los Angeles County coroner has determined. And keep in mind, the property does not yet feature a house. He bought two adjacent houses for $1 million each, and then had them bulldozed to expand his backyard. Hughes's will stipulated that, until Alex turns 35, the bulk of his inheritance would be held in a trust managed by Jack Reynolds (Alex's paternal grandfather), attorney Conrad Klein, and Herbalife executive Christopher Pair. The initial autopsy, conducted on May 23, was inconclusive and required additional tests. Herbalife responded to the probe by saying it "welcomes the inquiry given the tremendous amount of misinformation in the marketplace, and will cooperate fully with the FTC. He also had an elevated level of the drug Doxepin. "The approval there was based on how much funds you raised," Hughes told People magazine in 1985. Perhaps we'll just end with a reminder to nevermix alcohol and prescription drugs. In October 2022, previous CEO Michael O. Johnson was appointed as Chairman and interim Chief Executive Officer following the departure of John Agwunobi. The case was resolved with Herbalife and its distributors paying $7million into a fund for class members part of the suit. Specifically, we're gonna take a look at the life story of Herbalife founder Mark Hughes. Mrs. Hughes told investigators that her husband was drinking before he fell asleep on the evening of May 20 on the living room sofa of their $27 million oceanfront estate in Malibu. "[118][119], The lawsuit alleged that Herbalife deceived consumers into believing they could earn substantial income from the business opportunity or big money from the retail sale of the company's products. Darcy LaPier met Mark Hughes, founder of Herbalife, on a blind date. I'm going to fuck you one way or the other.". Hughes' blood-alcohol level was recorded at .21 percent. Mark Hughes, founder of Herbalife International Inc., had been on a four-day drinking binge just before his death in May, according to final autopsy . As we mentioned previously, Mark Hughes had somewhat of a penchant for beauty queens. Marconi said the two made a strategic decision to split the business into a manufacturer and a marketing company. He shared his vision for success in a passionate and powerful way, resulting in what is now a multibillion-dollar company with dedicated independent Herbalife Distributors in more than 90 countries around the world. The FTC said in a press release about the settlement "it's virtually impossible to make money selling Herbalife products. When you speak with people who met Mark, they will tell you how he motivated them to reach greater heights personally and professionally. [1] Rohn left college after one year [2] In 2002, Herbalife was taken private by a group of investors for $685 million dollars. Herbalife faces hurdles after founder's death. Hughes often stated that the genesis of his product and program stemmed from the weight loss concerns of his mother Joanne whose premature death he attributed to an eating disorder and an unhealthy approach to weight loss. It explored the allegation from Bill Ackman that Herbalife was a pyramid scheme and personal stories of its distributors who lost their life savings. Hughes said many times that he had been inspired to start his company after his mother (Jo Ann Hartman) died from taking diet pills. The product debuted in 1980 and, as of 2015, was the company's best selling product accounting for nearly 30% of total sales. [89] On December 3, 2013, a Belgian appeals court found for Herbalife, reversing the lower court's finding. During his life, he was married to four different beauty queens including a former Hawaiian Tropic model and a former Miss Petite USA. [75] However, neither a 2005 American Association for the Study of the Liver position paper[76] on the management of acute liver failure nor a 2013 review in the New England Journal of Medicine[77] lists "overzealous dieting" among the recognized causes of acute liver failure. Hughes was found dead in his Malibu mansion May 21. He also owned a $30 million, 22,000 square foot castle in Beverly Hills called Grayhall that sat on 2.5 acres of the most expensive real estate in the world. Herbalife paid Rosen $3.3 million last year. The trustees LENT money to a man named Charles Dickens, who had absolutely no experience in real estate development, so he could buy the property from them with their money for $23.75 million. Inside the crisis transforming the Southwest, Rain check! The company's stated goal was to market healthy weight loss products and generally change the nutritional habits of the world. By 2000, his real estate portfolio alone was worth north of $100 million. [38], Herbalife's products are produced at the company's five manufacturing facilities in the U.S. and China, as well as by third-party manufacturing partners. [121], On September 27, 2019, the SEC announced that Herbalife has agreed to pay $20 million to settle charges of making false and misleading statements about its business model and operations in China between 2012 and 2018. 3 sezonluk szleme", "Herbalife Nutrition and LA Galaxy Team Up to Offer Augmented Reality Fan Experience", "Herbalife Signs LA Galaxy's Jonathan Dos Santos to Multi-Year Sponsorship - Direct Selling News", "Herbalife powers Israeli Olympians for upcoming 2020 Tokyo Olympics", "Indian Olympic team gets Herbalife backing", "Tribeca Fest: 'Betting on Zero' stirs Herbalife waters", "Betting on Zero: Herbalife doc feeds investors' feud as director claims 'dirty tricks', "Hedge-Funder Bill Ackman Is a Star at Tribeca Film Festival, Even As He's Losing Billions", "John Oliver Exposes Herbalife And Its Dangerous Focus On Latinos", "John Oliver Says multilevel marketing Companies Like Herbalife Are Pyramid Schemes", "John Oliver delivers epic takedown of Herbalife", "New book chronicles the Ackman-Icahn rivalry over Herbalife", "Bill Ackman's bet against Herbalife was 'dangerous,' CNBC's Scott Wapner says", Juice Plus AKA National Safety Associates, European Grouping of Marketing Professionals, https://en.wikipedia.org/w/index.php?title=Herbalife&oldid=1139524560, Companies listed on the New York Stock Exchange, Nutritional supplement companies of the United States, Pages with non-numeric formatnum arguments, Short description is different from Wikidata, Articles with unsourced statements from May 2018, Articles tagged with the inline citation overkill template from March 2022, Wikipedia articles needing clarification from September 2022, Creative Commons Attribution-ShareAlike License 3.0, This page was last edited on 15 February 2023, at 15:51. (R-Del. In 1994, Mark created Herbalife Nutrition Foundation (HNF), with the goal of improving childrens lives by helping organizations provide healthy nutrition to vulnerable children. And revenues pretty much exploded from that point on. [28], In July 2016, Herbalife agreed to change its business model and pay $200 million to its distributors in a settlement with the FTC. We are confident that Herbalife is in compliance with all applicable laws and regulations." Darcy was reportedly given an estimated $50 million worth of real estate and money from the estate, despite the fact that she had been married to Mark for less than a year. [73] Herbalife stated they were cooperating fully with Spanish authorities,[74] and after investigation, the agency determined no action was required and removed the alert. [130] In July 2020, Herbalife also sponsored the Guangzhou Charge of the Overwatch League. Hughes, 44, was found dead in his Malibu mansion bedroom by family members on May 21. Marconi said in the lawsuit that the switch was inspired by revenge and violated a verbal agreement with Hughes reaffirmed at several points over the past 20 years. Not sure what the main lesson iswith the story. Pair subsequently pleaded no contest to the 1998 theft of about $400 in merchandise. His mother's death had a huge impact on Mark future life. [38], In China, the company's manufacturing sites are located in Suzhou and Nanjing. AllRightsReserved. To settle his problems with the state, Hughes agreed to pay $850,000. [15][16], By 1988, the company had expanded its reach to Japan, Spain, New Zealand, Israel, and Mexico and increased its worldwide sales to $191 million in 1991. [12] That same year, the California Attorney General sued the company for making inflated claims about the efficacy of its products. They divorced in 1984 and in the same year, he married Angela Mack, a Swedish former beauty queen. He was just 44 years old and had been suffering for several months from insomnia and a recurring case of pneumonia. [110][111][112][113][114], In July 2016, Herbalife agreed to change its business model and pay $200 million in a settlement with the FTC. Hughes liked the sales business and soon jumped to Best Line Products, a similar firm that quickly went out of business. The company did not admit or deny the charges but agreed to the settlement terms. The guest house alone at Grayhall is 4000 square feet. Unfortunately over the years more than a dozen lawsuits have been filed over The Vineyard (now known as the Mountain of Beverly Hills, and listed in 2018 for $1 billion). According to the same court documents, when the topic of the beach house was brought up again that night, the trustee made the following remark to Suzan (with Alex standing just a few feet away): "I'll get you on your knees eventually, Suzan. Customer Service. Over the years, various people have described Tower Grove as one of, if not THE, most beautiful and desirable pieces of real estate in Los Angeles. It was said to be the highest price ever paid for a private home in Malibu. Herbalife said it paid the analyst $170,000 in salary and bonuses since 1997. [128] They sponsored FC Barcelona and Lionel Messi between 2010 and 2013. The chief executive of Herbalife International Inc., Mark Hughes, died after a four-day drinking binge, according to a full report by the Los Angeles coroner. Challenges for the nutrition and personal care products company range from shoring up its image to repairing a rift with Wall Street. Previously, Pair was Herbalife exec VP, chief operating officer and secretary. Medicines are regulated by the F.D.A., while nutritional supplements are not. He spent three years there and was listed as one of the company's top 100 earners. What Happened? He left The Times in 2015. [14] In 1986, Herbalife became a publicly-traded company on the NASDAQ and rebranded itself as Herbalife International. That's Not A Typo. Ackman believes that Herbalife is nothing more than a gigantic pyramid scheme that preys predominantly on unwitting lower-income people, especially those in the Latino community. Hughes died after a 4-day drinking binge, apparently from an overdose of alcohol and the antidepressant drug doxepin. However, in the press conference, Herbalife was declared not necessarily not pyramid scheme. They also engendered Pairs bad will, according to the lawsuit. You will be charged Distributors are responsible for providing receipts for sales and proving they have legitimate customers. https://www.nytimes.com/2000/08/12/business/binge-led-to-death-of-herbalife-founder.html. Meanwhile, Suzan (the former Miss Petite USA) also claimed that one of the trustees sexually harassed her on a number of occasions. Hughes reached settlements with the regulatory agencies in 1986. The executives, however, apparently couldnt agree on the plan, perhaps because they didnt trust each other to be alone with Hughes during such a sensitive period, Marconi said. By the early 90s, Herbalife's annual revenues topped $1 billion. Scott Carrier, of the Los Angeles County Coroner's Office, said final . [131] In addition to these team and player sponsorships, Turkish Women's Basketball Super League has been named 'Herbalife Nutrition Women's Basketball Super League' for three years starting the 2019-2020 regular season. [4], The company has been criticized for allegedly operating a "sophisticated pyramid scheme". He inspired people from all walks of life through his faith in peoples ability to change lives, starting with their own. Hughes was found dead in his Malibu mansion, said Los Angeles County sheriff's Sgt. Herbalife's multi-level-marketing plan was outrageously successful. Today, the program helps to provide proper nutrition to over 229,000 children in 59 countries around the globe. Submit a correction suggestion and help us fix it! Mark Hughes HERBALIFE Founder and President Died 5-21-2000 Age 44 Herbalife Faces Struggle After Death of Founder Mark Hughes August 11, 2000 Los Angeles -- Herbalife International Inc.'s Web site still uses a video of Mark Hughes hawking weight- loss pills and nutritional supplements two months after the company's founder died of a prescription How Chipotle's Stock Price More Than Quadrupled in Five Years, How Repaying Student Loans Is ChangingDramatically. Not a good combination. [55] Herbalife Nutrition is also required to have its practices monitored by an outside party for seven years to ensure compliance. Oliver criticized Herbalife for its exploitation of Latino communities,[140] and overstatement of its products' health benefits. Tragically, it was at this house where Darcy found Mark dead in their bed on the morning of May 21, 2000. [56] Discount buyers are unable to earn rewards or sell products. Herbalife also instituted a fairly innovative program of customer-service chat rooms, post-sales service and sales follow-up. Scott Carrier, of the Los Angeles County Coroner's Office, said final autopsy results found that Hughes, 44, had high levels of both alcohol and an antidepressant in his blood. [clarification needed] The products were sent to Bio-Medical Research Design LTD (B.R.D), to a private U.S. laboratory, and to Israel's Forensic research laboratory. Carrier said the combination of the alcohol and Doxepin would cause excessive sedation, causing the brain center that controls respiration to shut down. When asked during the hearing how he could be qualified to challenge leading medical experts, Hughes responded: "I defy anybody to be able to produce results as this company has. The rift between these individuals took a public twist Tuesday. [2][4][5][6] Part of Hughes' CEDU rehab required him to raise money by selling raffle tickets. [30] On April 25, 2018, Herbalife announced that it had changed its name from Herbalife Ltd. to Herbalife Nutrition Ltd. He was fined $1,762; sentenced to a day in jail, 12 months probation and court-ordered psychiatric counseling; and told to stay clear of Saks, according to court records. [8] His blood-alcohol level was measured at 0.21. Do Not Sell or Share My Personal Information, Before and after photos from space show storms effect on California reservoirs, Dramatic before and after photos from space show epic snow blanketing SoCal mountains, The chance of a lifetime: Five friends ski the tallest mountain in Los Angeles, Shocking, impossible gas bills push restaurants to the brink of closures, 19 cafes that make L.A. a world-class coffee destination, Review: A reimagined Secret Garden fails to flower anew at the Ahmanson Theatre, High school basketball: Southern California and Northern California Regional results and updated pairings, The Colorado River is overused and shrinking. [96][97], According to a number of financial commentators, Ackman bet roughly $1 billion against the company;[98] soon after remarks to the press, the price of the stock decreased such that Ackman would have made $300 million if he had closed his short position then. Upset by the valuation given his company on the stock market, Hughes unsuccessfully tried to arrange financing to buy out shareholders. Over the years, Mark developed a passion for investing in real estate. By January of each year, sales leaders are required to requalify. Ouch. Certainly the financial fortunes of both men have been closely linked. "[2][3] At 16, he was sent to CEDU High School, a private residential school for troubled youngsters in Running Springs, CA whose origins were associated with Synanon, a group founded in 1958 and later described as a cult. When Golden Youth went out of business, Hughes decided to start his own operation. [60] Herbalife's SEC 10-Q filings stated that the Israeli Ministry of Health did not establish a causal relationship between the product and liver ailments. The offer was increased to $17.81 in January after shareholders sued. Referring to a panel of nutrition experts who had criticized Herbalife in testimony the previous day, he asked the senators, "If they're such experts in weight loss, why were they so fat? He owned a $25 million beach front mansion in Malibu. He later became a millionaire again. Some health experts doubted the efficacy of Herbalife products, saying that in some instances they relied too heavily on laxatives and caffeine. [14], Scott Carrier, of the Los Angeles County Coroner's Office, said final autopsy results found that Hughes, 44, had ingested a toxic combination of alcohol and Doxepin, an antidepressant he was taking to help him sleep. [52], Herbalife Nutrition is a multi-level marketing company. Herbalife Faces Struggle After Death of Founder Mark Hughes Herbalife Founder on Drinking Binge Before Death Make money now, ask me how! Instead of splitting the company, they agreed that Hughes would run the marketing end while Marconi would be the exclusive supplier, according to Marconis suit. More recently, however, Marconi told The Times he provided Hughes with copies of a Beverly Hills Police Department mug shot of Pair, taken after the executive was caught shoplifting at the Saks Fifth Avenue store on Wilshire Boulevard two years ago. But in the decade since the death, Mark's divorced . Unfortunately for Alex, he wouldn'tbe able to touch the money until he turned 35, in the year 2027. He was born to a poor family, became a millionaire at age 30, and went broke when he was 33. "[13], Hughes reached settlements with the regulatory agencies in 1986. Concerning Mischaracterization in Advertisement", "Herbalife's Claims Drawing Medical Fire, Government Probes", "History of Herbalife International, Inc. FundingUniverse", "Herbalife Lays Off 573, Blames Slowing Sales", "Nobel Prize Winner Didn't Disclose Herbalife Contract (Update1)", "Herbalife's Afterlife Challenge; Charismatic Leader Left an Image Problem and Other Issues", "Herbalife's Hughes Plans to Privatize In $500 Million, Leveraged Buyout", "But where are the distributors' yachts? He founded Herbalife at the age of 24 out of the back of his car and slowly built the company into a billion dollar business. [14], In September 1987, Hughes married Suzan Schroder, a former actress, court reporter and Miss Petite U.S.A.[14] In December 1991, Hughes' and his wife, Suzan Hughes, had his sole son, Alexander Reynolds "Alex" Hughes. On June 16, the coroner found that Mr. Hughes had died May 21 of an overdose of alcohol and a toxic level of doxepin, an antidepressant. Herbalife profits enabled Marconi to expand his company, finance his Marconi Automotive Museum in Tustin, a charitable foundation for children and commission Italian sculptors to make full-scale replicas of Michelangelo works for his San Juan Capistrano ranch. He has a masters degree from Northwestern Universitys Medill School of Journalism. In December, Hughes was reported to have paid about $25 million for his Malibu home. On Feb. 2, three. Whitney & Company and Golden Gate Capital, U.S. Justice Department investigation of bribery in China. [17] The company launched a line of personal care products in 1995 which included fragrances and facial cleansing products. Pair was named acting president and CEO following the death of founder Mark Hughes (1"The Rose Sheet" May 29, p. 7). [21], In 2002, the company was acquired for US$685million by J.H. Aug. 12, 2000 12 AM PT. Einhorn said the short had been closed before the end of 2012. Can the second 'Survivor' live up to the first? Last year, while he was seeking financing to buy his companys outstanding shares, Hughes was battling homeowners in Benedict Canyon over his plans to build a 45,000-square-foot Mediterranean villa. Will Force Major Changes", "Herbalife Settles Pyramid Probe as FTC Seeks Major Changes", "Herbalife Is Paying a $200 Million Fine and Having a Great Day", "Redress checks and compliance checks: Lessons from the FTC's Herbalife and Vemma cases", "FTC says Herbalife refund checks are in the mail", "Herbalife to Pay $20 Million for Misleading Investors", "Herbalife Nutrition to pay $20 million to settle false disclosure charges: U.S. SEC", "Herbalife to Pay $20 Million to Settle SEC Fraud Claims", "Former Herbalife Executives Charged With Conspiracy to Bribe Chinese Officials", "Herbalife Sets Aside $40 Million for Bribery Settlement", "Herbalife pays $123m to resolve Chinese bribery claims", "Herbalife Announces Five-Year Sponsorship Of Real Madrid's Cristiano Ronaldo", "C.B. [13] The company settled the suit for $850,000 without admitting wrongdoing. A 2004 settlement resolved a class-action suit on behalf of 8,700 former and current distributors who accused the company and distributors of "essentially running a pyramid scheme." Herbalife obviously disagrees, and has gone to great lengths to defend its honor in public statements and media interviews. Cessation of respiration would be the immediate cause of death, he said. [19], In 1999, Hughes attempted to take the company private after asserting that Wall Street was undervaluing the company. ", "Christopher Pair Leaves Herbalife After Board Criticizes Management", "HERBALIFE LTD. Form 10-K - Annual Report, 2005", "Bill Ackman, Dan Loeb, Carl Icahn, and Herbalife: The Big Short War", "Herbalife to Buy Back $266 Million in Shares", "Herbalife names a new CEO as it tries to move on from FTC settlement", "Herbalife Launches $600 Million Stock Buyback and Discloses Failed Buyout Talks", "Herbalife changes name to Herbalife Nutrition", "Herbalife Ltd Announces Name Change To Herbalife Nutrition Ltd", "Herbalife chief Richard Goudis resigns over comments he made before taking the job", "Herbalife to Expand Manufacturing Operations in China", "HERBALIFE LTD. Form 10-K - Annual Report, 2009", "Herbalife Bringing Life to Massive Former Dell Plant", "Herbalife Botanical Extraction Facility", "Herbalife Changsha Extraction Plant Open in 2013", "Herbalife launches botanical extraction facility in China", "Herbalife's Newly Renovated California Manufacturing Facility", "Comatose Sneak peek inside Herbalife's Winston-Salem plant", "Herbalife Sets Employee Volunteer Projects", "Das Geschft mit den berflssigen Pfunden", "Herbalife says group retracts lead claims", "Group Says 6 Dietary Supplements Contain Dangerous Levels of Lead", "Herbalife Leads Lean, Mean Pack of Profitability", "Herbalife Cuts Sales Guidance; Exceeds Key FTC Mandate", "Herbalife Will Restructure Its Multi-Level Marketing Operations and Pay $200 Million For Consumer Redress to Settle FTC Charges", "It's No Longer Business as Usual at Herbalife: An Inside Look at the $200 Million FTC Settlement", "Herbalife Quarterly Report to SEC, June 2006", "HERBALIFE LTD. Form 10-K - Annual Report, 2007", "Acute liver injury induced by weight-loss herbal supplements", "Spanish reports of hepatotoxicity associated with Herbalife products", "Hepatotoxicity of herbal and dietary supplements: an update", "Revisiting acute liver injury associated with herbalife products", "Israeli woman sues Herbalife, claims products caused liver disease", "Spanish Ministry of Health issues precaution on Herbalife brand", Herbalife Responds to Spain's Ministry of Health Alert, "Herbalife hepatotoxicity: Evaluation of cases with positive reexposure tests", "Herbalife Side Effects And Horror Stories - Lift Big Eat Big", "Paper about Herbalife-related patient death removed after company threatens to sue the journal", "REMOVED: Slimming to the Death: Herbalife-Associated Fatal Acute Liver FailureHeavy Metals, Toxic Compounds, Bacterial Contaminants and Psychotropic Agents in Products Sold in India", "After legal threats from Herbalife, Elsevier journal retracts and then removes a paper", "Hedge fund manager alleges Herbalife is 'pyramid scheme', "Statement from Nordic Herbalife Director denying toxicity of Herbalife products, pyramid marketing scheme", "Herbalife says Belgian appeals court reversed pyramid scheme finding", "Herbalife International of America, Inc: Moderator: Brett Chapman", "Herbalife faces rising Einhorn pressure", "Einhorn Profited on Bet Against Herbalife", "Bill Ackman Surrenders in His Five-Year War Against Herbalife", "Herbalife CEO accused of running 'Ponzi scheme', "Ackman Defends Calling Herbalife a 'Pyramid Scheme', "Bill Ackman enters the city of Stalingrad,", "There's No Law Against Bill Ackman Talking His Book", "Prosecutors Interview People Tied to Ackman in Probe of Potential Herbalife Manipulation", "FBI Probes Ackman Fund for Herbalife Manipulation", "Five years after brawl with Icahn, Ackman exits losing bet against Herbalife", "Bill Ackman is Capping His Losses on Herbalife", "Is Bill Ackman's Private Hedge Fund Career Over? 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[ 52 ], Herbalife also instituted a fairly innovative program of customer-service chat rooms, service! Herbalife Nutrition Ltd will, according to the lawsuit [ 57 ], the property was renamed `` Mountain! Criticized Herbalife for its exploitation of Latino communities, [ 140 ] and overstatement of products. And prescription drugs, he wouldn'tbe able to touch the money until he turned,. Pair subsequently pleaded no contest to the first Wall Street was undervaluing the company 's top 100 earners of Overwatch... Public twist Tuesday market healthy weight loss products and generally change the nutritional habits of the Overwatch League their... Fragrances and facial cleansing products after asserting that Wall Street end with a reminder to alcohol... Hughes reached settlements with the regulatory agencies in 1986 we are confident that Herbalife in. Sales follow-up ] his blood-alcohol level was recorded at.21 percent Golden Gate,... 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