A grandmother and diabetic who started out selling soap, Jeanette Brooks, 56, has founded a global empire of 75,000 distributors who spruik "healthy chocolate" with an acai berry additive. They say it should be taken daily to help weight loss, improve teeth, benefit diabetics, lower blood pressure, reduce cholesterol, lift mood and boost the immune system, making it an ally in the battle against cancer.

"Nothing beats experience," crows Brooks's MXI Corp website, to which Australian web surfers are directed from the local distributor sites of the chocolate known as Xocai (pronounced "show-sigh").

"There are people making well over $40,000 a month!!! And we're just getting started," it says.

Already there are 620 Australian distributors, and they are signing on more as fast as they can. A distribution centre has just opened in Wetherill Park and this month a "double diamond" executive, Sherm Smith, plans a visit to further the "healthy chocolate" cause.

"We are extremely excited about the Australian market … We have distributors making six figures … We look at Australia as not only having Australians using and consuming and sharing our product, but it is a springboard to go into those Asian markets," says Brooks's son, Andrew.

This is the modern means of making a mint in one country from the citizens of another. Xocai and linked websites across the world picture Brooks as a speech pathologist and teacher who was so good at "network marketing" she became a millionaire at 29.

She told Reno magazine in Nevada last year that as a diabetic she had devised a huge range of sugar-free products. But they stopped selling when the Atkins low-carb diet lost popularity. So she came up with Xocai three years ago. By last year, there were more than 2 million customers and 21,000 US sales representatives. Annual sales were set to hit $US10 million ($10.7 million) last year, she says.

But in this magazine and on Xocai websites, huge swathes of Brooks family history are missing. There is no mention of the four previous companies of Jeanette and her husband, Martin Brooks, which were embroiled in litigation and bankruptcy and involved a string of angry former distributors and business partners. Nor is there mention of the diet foods that authorities found to be falsely labelled.

The Fair Trading Minister, Linda Burney, said yesterday her office would investigate whether the Xocai operation was a pyramid-selling scheme.

Most people who sign up to the Xocai "compensation plan" are unlikely to know that in February 1994 the couple consented to a civil fraud judgment for about $US600,000.

But after dealing with creditors who claimed more than $US36 million and with the birth of Xocai three years ago, the couple have risen from the bankrupt dead and started over again, reaching into Australia, New Zealand, Canada and Japan. By their sides as company executives are their son, Andrew, and Jeanette's brother, Kurtis Nielsen.

It is a remarkable recovery.

Through US court and official documents, the Herald has been able to shed some light on the shadows behind the glowing success scenes on Xocai websites.

They reveal a couple that have lived on a legal knife-edge and which unsuccessfully squirrelled money away in Panamanian bank accounts. Since 1991 there have been at least 13 separate courts cases involving their companies. Court documents show a trail of failed businesses. The Brookses have blamed others for the problems.

Creditors have included the American and Canadian tax offices, and scientists who patented a diet product. Then there are the distributors of another "low carb" cookie, who demanded $US50 million when the cookie was recalled because the Food and Drug Authority found it was falsely labelled with claims of lower carbohydrates and zero sugar.

In 2002, a debt collection agency, Asset Protection & Recoveries, said in a court document: "During the past 14 years the debtors have operated businesses in the dietetic food and nutritional formulas industries that were misrepresented to the public or appropriated from other successful business."

The Brookses replied: "This statement is utterly false and completely lacks evidentiary support."

In that same year, the son was drawn into the legal maelstrom when it was claimed the family had used children and siblings to conceal assets from creditors. The Brookses denied this. But American authorities confiscated $US1.7 million wired from a Panama account to Martin Brooks's brother and froze the rest of the funds as "fraud accounts".

Martin Brooks, now the chief executive of MXI Corp, was arrested in Montana seven months before the confiscation and pleaded guilty to unlawfully transferring funds from Nevada to the Cayman Islands tax haven, US court documents show.

Brooks told the Herald his conviction was for funds sent to Canada, but a US District Court indictment details a charge that he mailed money orders for $US29,400 to "Grand Cayman Island, British West Indies", without declaring them to customs. His signature is on a document pleading guilty to the offence.

"I didn't know that postal money orders were considered cash," Brooks says.

The couple appear to have struggled back from their low of 1994, when they fled costly US litigation to make their home in Canada. In one court document, their lawyers say they "decided to move to Canada after seeing the TV program Lifestyles Of The Rich And Famous . Not because of the lifestyle, but because [they] thought the area to be beautiful, and wanted to live in the mountains".

But glimpses of their lives through court files are far from glamorous. A lawyer for Advanced Physicians Products Inc, which was trying to get the $US2.34 million won from the Brookses in a 2000 court judgment, complained that Jeanette Brooks refused to leave Canada for questioning in a Nevada court case she initiated because of high blood pressure, glaucoma, diabetes and a fear of flying.

"There is reason to believe that Mrs Brooks will go to great lengths to deceive the judgment creditors and this court. It is a matter of record in this court's files that Mrs Brooks and husband misrepresented to this court that they could not afford to defend themselves at trial in 1995 while at the same time they were transferring out of Nevada and the US millions of dollars into foreign accounts," he said.

The Brookses denied any such deception.

The couple's version of their lives is edged with a romantic glow that infuses the marketing of their latest product, Xocai. Jeanette described herself to the Herald as "a woman who had a dream to be more than what I was and along the way I had trials and tribulations.

"But I can hold my head up, proud to know that I did whatever I could to get on with life. The other option is to commit suicide, or lock yourself in a closet … but you can go forward. I have made a difference in people's lives. We've sparked dreams in people. People become helpless and hopeless and if they feel they can own a bit of their destiny, that is where their joy comes from."

Her university flatmate married Merrill Osmond, the lead singer of the Osmond brothers who, like the Brookses, are Mormons. She says Osmond lent her $500,000 when her company Yurika Foods collapsed.

Martin Brooks says, "Sometimes out of hard trials come highlights of your life. One of the highlights I remember is when we paid Merrill Osmond the final amount of money we owed, he cried. He said, 'I wish I had loaned you the $20 million we had in the bank.' ".

In the latest bankruptcy settlement still in a Nevada trustee's hands, the Brookses had to give up millions of dollars in assets, including Krugerrands and their Canadian property, along with a baby grand piano, waterbikes, an inflatable boat and a 1999 Chevrolet.

Their 25 creditors had filed about $US36.4 million in claims by June 2004. The trustee's latest available monthly operating report filed with the US Bankruptcy Court in Nevada shows that, by this April, about $US5.2 million had been paid to creditors.

"The Brookses have settled with every one of their creditors and paid in full what their creditors settled for … This is very unusual for the creditors to be paid 100 per cent of what they agree they're owed," says the couple's lawyer, Nathan Jenkins.

Martin Brooks says MXI Corp is debt free and in good financial health. He also says the Xocai operation is not a pyramid scheme.

"Retail is a big pyramid … If you look up the definition of a pyramid scheme, it's basically about money. I think our company is the furthest you can get from that. We have products made from healthy chocolate," he says.

Jeanette Brooks says she was "not skilled in all things" and regretted having distributors who had given out wrong information. Now MXI has a compliance department to rectify that, she says.

"What you've had in the past makes you better in the future … I am a self-made woman who has learnt the tough knocks of the business world and come out still smiling and enjoying life."