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The 'Herbalife' Ministry of Truth inverts reality.

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The great weakness of all totalitarian, cultic groups is that, once you know how they function by deceiving their adherents into accepting aUtopian fiction as fact, the inflexible reality-inverting reactions of these groups to any challenge to their authenticity, can be predicted with almost 100% accuracy.



The Herbalife logo is seen on a building housing some of their offices in downtown Los Angeles, California April 28, 2013. REUTERS/Lucy Nicholson
'Herbalife is a global nutrition company publicly traded on the New York Stock Exchange. We have more than 7,400 employees, millions of customers and for more than 30 years we have been committed to bettering the lives of those we touch with products that support and encourage a healthy, active lifestyle.' http://iamherbalife.com/



Thus, the latest, predictable move by the 'Herbalife' Ministry of Truth, is the creation of a kitsch, new Website which seves up a veritable feast of reality-inverting Utopian 'MLM' propaganda; all of which has been designed to obstruct justice in order to continue to commit fraud. 




Despite what they now steadfastly pretendto be reality, for decades, the propagandists at the 'Herbalife' Ministry of Truth have been constantly repeating the absurd lie that 'Herbalife' has 'helped millions' of people to 'realize' their 'financial dreams.'




http://mlmtheamericandreammadenightmare.blogspot.fr/2012/05/racketeer-influenced-and-corrupt.html


As ever, this sinister new broadcast-platform for the'Herbalife' Lord Hee Hawsto recite their latest inflexible script, fits into an overall pattern of ongoing, major, racketeering activity as defined by the US federal Racketeer Influenced and Corrupt Organizations Act, 1970





 

'The purpose of Newspeak was not only to provide a medium of expression for the world-view and mental habits proper to the devotees of Ingsoc, but to make all other modes of thought impossible. It was intended that when Newspeak had been adopted once and for all and Oldspeak forgotten, a heretical thought — that is, a thought diverging from the principles of Ingsoc — should be literally unthinkable, at least so far as thought is dependent on words. Its vocabulary was so constructed as to give exact and often very subtle expression to every meaning that a Party member could properly wish to express, while excluding all other meanings and also the possibility of arriving at them by indirect methods. This was done partly by the invention of new words, but chiefly by eliminating undesirable words and by stripping such words as remained of unorthodox meanings, and so far as possible of all secondary meanings whatever.'

Georges Orwell (Appendix to 'Nineteen Eighty-Four')


The purpose of 'MLM Income Opportunity' jargon is not only to provide a medium of expression for the unquestioning world-view and mental habits proper to the core-adherents of 'Herbalife,'  but to make all other critical and evaluative modes of thought impossible. It is intended that when 'MLM Income Opportunity'  jargon has been adopted once and for all and traditional language forgotten, a heretical thought — that is, a thought diverging from the 'positive' principles of  'Herbalife'  - should be literally unthinkable, at least so far as thought is dependent on words. Its vocabulary is so constructed as to give exact and often very subtle expression to every 'positive' meaning that an 'MLM Distributor' can properly wish to express, while excluding all other 'negative' meanings and also the possibility of arriving at them by indirect methods. This is done partly by the invention of new 'positive' words and phrases ('Herbalife', 'Multi-Level Marketing', 'Distributor' , Independent Business Owner,'), but chiefly by eliminating undesirable 'negative' words and phrases ('cult', 'totalitarian', 'fraud', 'deception',  'brainwashing', 'victims', 'exploitation' , 'de facto slaves') and by stripping such words and phrases as remain of unorthodox meanings, and so far as possible of all secondary meanings whatever. 




David Brear (copyright 2014)


Feds Launch 'Herbalife' Investigation... but What About All the Other 'MLMs?'

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Notice the Orwellian wording of the 'Herbalife/MLM Income Opportunity 'lie. The verb, 'to realize,' has several senses. Presumeably, the 'Herbalife'racketeers will now steadfastly pretend that they meant 'realize,' in the sense of, 'be fully aware of,' rather than 'convert into actuality' or 'achieve.'



On March 12, the US Federal Trade Commission (FTC) announced that it has officially opened an investigation of one of the oldest and largest of  'MLMs, Herbalife.' The investigation announcement marks the first FTC public investigation of a major 'MLM' since 1975! Something new is definitely occurring. As 'Herbalife' goes, so might the entire 'MLM industry.'

The FTC is responding to mounting charges and evidence presented by Wall Street firms, business media, class action lawsuits and consumer and Hispanic organizations that 'Herbalife'is not a legitimate sales business but an illegal pyramid scheme.


 What About This One? Free Audio Report

Enough evidence has already emerged to dispel the myth that 'MLM' is a modern form of 'direct selling.'Some 'MLMs' actively discourage selling. Instead, they tell the recruits to 'be their own customer'or just 'buy from yourself' and then find others to do the same. How do you make money buying from yourself? And if  'finding others to do the same' means making money from recruiting, isn't that the perfect definition of a pyramid scheme? It is indeed difficult, if not impossible, to find a single individual that actually makes a sustainable profit from just selling'MLM'products. But 'MLM' recruiters are everywhere! 




As a result of painstaking research and courageous whistle-blowing the other myth about 'multi-level marketing'has also been demolished. It is that 'MLM' offers an 'income opportunity' to the average person. The data verifies that 99% never earn a profit. Factoring costs and product purchases means that more than 99% lose money in 'MLM.' This extraordinary fact had been hidden from view for decades. Now that is in the news, 'MLM'companies are changing stories to claim that few people who sign MLM sales contracts are even interested in income at all.They couldn't care less about money, 'MLM' promoters say of the enrollees. They just love the products. 




Other tricks of diversion include renaming the millions of failed 'distributors'as 'members' or 'end-users,'or my all-time favorite, 'volunteers!!' 


So, if'MLM'is not about 'direct selling' and it offers no viable income opportunity, then what the heck is it?


Two documents are presented in the current edition of Pyramid Scheme Alert's Update that address that question.



1. THE PYRAMID SCHEME INDUSTRY: Examining Some Legal and Economic Aspects of Multi-Level Marketing

2. "What Is this Thing Called "Multi-Level Marketing?"

Robert FitzPatrick, President Pyramid Scheme Alert.
I urge you to read these documents to learn about the legal and the financial records that determine whether 'MLM' is the 'greatest income opportunity in the world' or the world's biggest scam; whether it is 'direct selling'or pyramid recruiting; and whether it is a 'sales network' or a financial cult. 


 

Robert L. FitzPatrick, Pres. 
PYRAMID SCHEME ALERT 

'Herbalife' and 'Scientology.'

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Around about a week ago, I entered into a debate on the investment research platform, 'Seeking Alpha,' because a contributor had made passing-reference to the alarming similarities between 'Herbalife' and'Scientology.'





I attempted to draw the attention of the readers of Seeking Alpha to the fact that 'Herbalife' had been directly-linked to'Scientology' in Europe, but about 20 years ago.


http://www.assemblee-nationale.fr/dossiers/sectes/r1687p2.asp

I also provided Seeking Alpha readers with a link to a French Parliamentary Commission of Enquiry Report (1999) on cults. This featured 'Herbalife' alongside 'Scientology' and the 'Raelians.

'L'attention de la Commission a également été appelée sur les activités de la société Herbalife, condamnée en 1994 pour vente à la boule de neige de produits substitutifs de repas. Cette société sur laquelle la précédente commission d'enquête s'était interrogée pratique une valorisation très poussée de son dirigeant et le système d'encouragement et de promotion des meilleurs vendeurs.
De même, il semble que la secte Raël ait été impliquée dans des ventes pyramidales par l'intermédiaire d'une SARL, NSA-France, spécialisée dans la vente par démarchage et à domicile.'
'The attention of the Commission is also drawn to the activities of the Herbalife company, convicted in 1994 of selling food substitute products using a snowball (pyramid) system. This company, which the previous Parliamentary Commission of Enquiry questioned, practises powerful ego-building techniques on its management and employs a system of motivation and promotion for its top sellers.

Similarly, it seems that the Rael cult was implicated in pyramid selling via a privately owned, limited-liability commercial company, NSA-France, specializing in selling via representatives in people's homes.'


(The following extract comes from  'Les Sectes en Belgique et au Luxembourg' ('Cults in Belgium and Luxembourg') a book (published in 1994) written by Alain Lallemand, a journalist on the popular, Franco-Belgian Newspaper, 'Le Soir.'
'What is the connection between Herbalife and Scientology? According to Jean Albert Fisch of the circle for the defence of the individual and the family (CDIF), it was a German Scientologist, the main donor on the list of the International Association of Scientologists (IAS), who launched the sale of Herbalife in Germany. A few adherents of the Church of Scientologycontrol a share the (Herbalife)sales networks in France wrote Le Monde in July 1993. The question even appeared in the Luxembourg Parliament in April 1993, when a member, John Schummer, asked the Minister for Health about collusion between recruiters from Herbalife and Scientology; in the meantime the German television station Sat I, had been a lot more explicit: an ex-Scientologist had explained how he had been advised to use Herbalife products during Hubbard/Dianetics training courses. Otherwise, almost all other Scientologists are taking them, he declared.' 

Nathan Vardi
Bill Ackman
Perhaps this is just a coincidence, but within just a few days of my intervention, 'Herbalife's' regular little flock of bleating propagandists on Seeking Alpha, suddenly began referring to a new article by Nathan Vardi published in Forbes Magazine (April 1st 2014), which sort to link 'Herbalife's' main Wall St. challenger, Bill Ackman, with'Scientology.'


At first, I wondered if this could possibly be an April Fool's joke, but, sadly, it's for real.



In brief, Bill Ackman's Pershing Square Capital has employed a new company, 'OTG (On The Ground) Research Group,' to conduct investigations of 'Herbalife's' activities in China

Aaron Smith-Levin

According to Nathan Vardi, one of the founders of OTG, is Aaron Smith Levin (b. 1981) who is based in Clearwater Florida. 

'Scientology's Flag Building,'Clearwater Florida.

Mr. Smith-Levin has had various connections with 'Scientology,' having worked for at least three corporate structures run by deluded core-adherents of the comic-book 'Scientology'scenario. However, it is not known whether Mr. Smith Levin is himself a deluded adherent of the 'Scientology'fairy story, or if he is under the influence of deluded adherents.

Thus, I have some common-sense questions for Bill Ackman, principally:

1. How exactly did you come into contact with Aaron Smith Levin?

2. Do you have any understanding of the comic-book story of 'Good vs Evil' which controls the minds and behaviour of core-'Scientology' adherents, and which has been used as the false-justification for a catalogue of crimes?

  3.  At the time you employed 'OTG Research Group' were you aware of:

  •  Mr. Smith Levin's connections with 'Scientology?' 
  • 'Scientology's' links to 'Herbalife?'
  • 'Scientology's' involvement in the vast Ponzi Scheme fronted by Reed Elliot Slatkin?

  • 'Scientology's'history of using agents to infiltrate and destroy its perceived 'evil enemies?' 
4. Have you given any confidential information to Mr. Smith-Levin or his'OTG'associates?

5. Do you still have contact with Mr. Smith-Levin or his'OTG' associates?



David Brear (copyright 2014)



'Herbalife' now faces criminal investigation.

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http://money.cnn.com/2014/04/11/investing/herbalife-shares/
The artificially-inflated market price of effectively-valueless'Herbalife'shares has nosed-dived, following media reports that the US Federal Bureau of Investigations and US Department of Justice have launched a criminal investigation of the counterfeit 'direct selling' company.


As effectively-valueless'Herbalife' stock plunges again, some interesting questions now, are:


  • Who has actually given the green light for the FBI and DOJ to launch a criminal investigation of 'Herbalife?'

  • Has any foreign government (or governments), or law enforcement agency (or agencies), put pressure on the US administration to order a criminal investigation of 'Herbalife?'








  • What effect will a US-based criminal investigation of 'Herbalife'have on ongoing foreign-based investigations and prosecutions of other US-based so-called 'MLM'companies (I'm particularly thinking of 'Amway India Enterprises')?

  • Who has leaked the news of a criminal investigation of'Herbalife' to the mainstream media?

  • What exactly is the current nature of the FBI's criminal investigation of 'Herbalife?'

  • How might the criminal investigation of'Herbalife' develop?



  • If this is, or turns into, a full-blown RICO-based investigation, might 'Herbalife' be closed-down without going to trial, and all assets suspected of being the product of major racketeering activity, seized?
  • Might a full-blown RICO investigation of 'Herbalife,' finally lead to the opening of the entire blame-the-victim 'MLM income opportunity' racketeering, can of worms?






  • Does the criminal investigation of 'Herbalife'have any connection with the death (in suspicious circumstances) of one of the organization's most-prominent 'lead'-peddling shills, Jim Peterson, last year?




  • Might Jim Peterson already have been under criminal investigation at the time he was found slumped in his pickup truck with a bullet in his head?


John-and-the-John-Tartols

  • Will'Herbalife' super-shill, John Tartol (and his criminal associates), like prison food?


Le logo du FBI et le devise du service : "Fidelity, Bravery and Integrity"

My best information now is that, the gloves are finally coming off, and that a growing file comprising the testimonies of destitute core 'Herbalife' victims, is already in the hands of the DOJ and FBI.

From my own experience of interviewing confused, and often angry, victims of 'MLM income opportunity' racketeers, what they describe is always essentially the same.
















Former 'MLM'evangelists have invariably been attracted into the trap by excited friends and relatives who have been taught to broadcast the good news that personal, and financial, redemption is at hand, by drawing up a list of everyone they have ever encountered in the lives, then progressively-contacting these people and reciting a thought-stopping recruitment script.



Once inside the trap, the would-be
'MLM' millionaires have been told that trying to sell the products to individual customers is OK for some, but, in the end, it's an inefficient waste of time; for in order to achieve their 'Dreams and Goals,' the smartest 'MLM distributors' have all exactly-duplicated a 'proven step-by-step plan to achieve total financial freedom.'







In reality, the 'Plan' includes well-documented, co-ordinated, devious techniques of social, psychological and physical persuasion, designed to shut down the critical and evaluative faculties of individuals (without their fully-informed consent), in order to exploit them and make them believe that failure to receive whatever secure, future, Utopian existence they have been offered, must have been entirely their own fault.



Presumably, the DOJ and FBI have access to, or will be seeking, experts in the field of 'Totalistic Thought Reform Programs,' who will be able advise agents what questions to ask chronic 'Herbalife' victims in order to uncover the exact nature of the organized psychological, and financial, abuse lurking behind the kitsch facade of 'MLM direct selling.'It is interesting to note that each time I have posted an accurate comprehensive explanation of how blame-the-victim 'MLM income opportunity' racketeering functions, on the investor platform, 'Seeking Alpha,' the resident little claque of provocative 'Herbalife' propagandists have sought to portray me as an ill-informed, crackpot conspiracy theorist, spouting 'psycho babble.' Laughably, this predictable reaction is merely further proof of the accuracy of my overall analysis. It also demonstrates how scared the bosses of the'Herbalife'racket are running.David Brear (copyright 2014)

The 'Herbalife' racketeers co-opted Madeleine Albright.

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In 1945, whilst most, contemporary mainstream commentators were unable to look beyond the ends of their noses, with a perfect sense of irony, Eric Arthur Blair a.k.a. George Orwell (1903-1950) presented fact as fiction in an insightful 'fairy story' entitled, 'Animal Farm.' He revealed that totalitarianism is merely the oppressors' Utopian fiction mistaken for fact by the oppressed.




In the same universal allegory, Orwell described how, at a time of vulnerability, almost any people's dream of a future, secure, Utopian existence can be hung over the entrance to a totalitarian deception. Indeed, the words that are always banished by totalitarian deceivers are, 'totalitarian' and 'deception.'





Sadly, when it comes to examining the same enduring phenomenon, albeit with an ephemeral 'Capitalist' label, most contemporary, mainstream commentators have again been unable to look further than the ends of their noses. However, if they followed Orwell's example, and did some serious thinking, this is the reality-inverting nightmare they would find.



More than half a century of quantifiable evidence, proves beyond all reasonable doubt that what has become popularly known as 'Multi-Level Marketing' is nothing more than an absurd, cultic, economic pseudo-science, and that the impressive-sounding made-up term 'MLM,' is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organized crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim closed-market swindles or pyramid scams (dressed up as 'legitimate direct selling income opportunites'), and related advance-fee frauds (dressed up as 'legitimate training and motivation, self-betterment, programs,' etc.).
The overwhelming majority of all the countless millions of ill-informed victims who have been consumed by individual 'Income Opportunity/Prosperity Gospel' cults, have remained silent and passive, and continued (unconsciously) to form part of the overall lie: whilst, as a direct result of the silence and passivity of the overwhelming majority of the ill-informed victims, all casual observers of individual 'Income Opportunity/Prosperity Gospel' cults (including, law enforcement agents, regulators, academics, legislators, judges, journalists, etc.) have also remained silent and passive, and have continued (unconsciously) to form part of the overall lie.
Today, it is very difficult to determine exactly how many people in total around the world have already been churned through the pay-through-the-nose-to-play 'MLM Income Opportunity/Prosperity Gospel' cultic game of make-believe, since it was first peddled as reality under the name of 'Nutrilite Inc. /Mytinger and Casselberry Inc.' back in the late 1940s. It is also important to distinguish between short-term and chronic, losing-players. In general, the overwhelming majority of fraud victims never complain, but, right from the outset, the self-perpetuating 'MLM ' lie was maliciously designed to implicate its ill-informed victims - loading them with shame and guilt, and, thus, prevent them from ever facing reality. Classically, the quantifiable evidence proves that, without exception, chronic, losing-players have been subjected to co-ordinated devious techniques of social, and psychological, persuasion designed to shut down their critical, and evaluative, faculties. In this way, they have been conditioned (unconsciously) to think of themselves, not as the victims of a cruel deception or as brainwashed cult adherents, but as 'Independent Business Owners' exercising free-will.  What has made external reality even more unacceptable, is the ego-destroying fact that a large proportion of ill-informed victims were deceived by a close friend or relative and, in turn, these new ill-informed victims then deceived, or tried to deceive, their own ill-informed close friends and relatives. The few, destitute, chronic, former losing-players who have managed to recover fully their critical, and evaluative faculties, and who have filed well-informed civil lawsuits against the corporate fronts of 'Income Opportunity' cultic racketeers, have invariably been obliged to settle out of court. Although a number of isolated civil investigations, and successful prosecutions, have been pursued by the Federal Trade Commission against some smaller 'Income Opportunity' front-companies in the USA, no co-ordinated official effort has ever been made to face wider-reality and identify, let alone tackle, the overall criminogenic/cultic phenomenon that has lurked behind all the shielding layers of structural, and pseudo-economic/scientific, mystification, reality-inverting 'commercial'  jargon and kitsch capitalist/Utopian/American Dream imagery.

Until the 1970s, the original 'MLM Income Opportunity/Prosperity Gospel' cultic racket  'Nutrilite' a.k.a.'Amway,' remained confined to the USA. In the face of a prolonged (but far-from morally, or intellectually, rigorous) FTC investigation, the 'Amway/MLM' lie first spread to Canada, then to W. Europe and Australia. However, in 1979, when a corrupt, and/or naive, US federal judge failed to identify 'Amway' as the corporate-front for an ongoing, major, organized crime group, this classic regulatory-failure was widely-seen as a license to steal. Since that time, countless US-based copy-cat rackets have been instigated behind labyrinths of legally-registered corporate structures pursuing lawful, and/or unlawful, enterprises - a significant number of which ('Forever Living Products', 'Herbalife', 'USANA', 'Nu Skin', 'Xango' etc.),  have been allowed to grow out of control and to infiltrate traditional culture all around the globe, accompanied by a distracting flock of co-opted political, academic and celebrity useful idiots, and shielded by a parallel labyrinth of legally-registered corporate structures known as, 'Direct Selling Associations.'

In the past, various casual observers have thrown up their hands in horror when I have dared to say that, given its duration, scale and devastating impact on huge numbers of vulnerable persons,  blame-the-victim 'Income Opportunity/Prosperity Gospel' cultic racketeering is an ongoing financial, and psychological, holocaust (with a small 'h') of which many people have been in denial. Sadly, the essentially-absurd fairy story entitled 'MLM Income Opportunity' has been allowed to expand to such titanic proportions, that the truth has long-since become almost unthinkable. However, since the concept of the big propaganda lie, is widely-understood, it seems almost inconceivable that the directors of law enforcement, and intelligence, agencies around the world have also remained unable to look beyond the ends of their noses and identify what the bosses of 'MLM/Prosperity Gospel' cults have actually been doing. 



Fortunately, the great weakness of all totalitarian groups is that, once you know how they function (by deceiving their adherents into accepting a Utopian fiction as fact), the inflexible reality-inverting reactions of these groups to any challenge to their authenticity, can be predicted with almost 100% accuracy, because they are all compelled to continue to follow essentially the same scenario of control.




David Beckham’s spokesman, Simon Oliveira, distanced the former England soccer captain from'Herbalife.Oliveira insisted that Beckham had nothing to do with 'Herbalife' personally. 'Herbalife is the LA Galaxy sponsor and David has no direct relationship with them,' he said.


'MLM Income Opportunity/ Prosperity Gospel' cults like 'Herbalife' have been deliberately designed to shut-down the critical and evaluative faculties of not only their victims, but also those of all casual observers. To the average person, celebrity opinion makers, like Madeleine Albright and David Beckham, cannot possibly be associated with a criminal racket, but when you have billions of dollars, it is possible to buy association with just about anyone (particularly, in the USA). Mr. Beckham is a man who, although extremely wealthy and internationally famous, is not exactly noted for his intellectual capacities, but even he has had the gumption to try to distance himself from the'Herbalife'racket.


'Herbalife' useful idiot, Madeleine Jana Korbel Albright (b. 1937)

http://en.wikipedia.org/wiki/Madeleine_Albright




However, in the case of Ms. Albright, it beggars belief that someone with her background and achievements can have fallen for a kitsch 'capitalist' adaptation of the age-old totalitarianUtopian fairy story. Surely, she must have read George Orwell's 'Animal Farm.' Consequently, I am publicly asking Madeleine Albright the following, common-sense question :


Before you became associated with 'Herbalife,' exactly what quantifiable evidence did you see which proved that a significant number of people have actually earned an overall net-income lawfully from regularly retailing 'Herbalife' products to the general public for a profit (based on value and demand).


Some more, obvious questions which apparently have never entered Madeleine Albright's head, are:

  • How much profit have 'Herbalife's' pay-through-the-nose-to enter mass-meetings generated over the years?
  • Who has controlled this hidden mountain of cash?
  • Why do unquestioning core-'Herbalife' adherents feel the need to keep paying through-the-nose-to attend, and participate in, what are essentially the same, totally-'positive' Utopianperformances, time after time?

  • Do the critical, and evaluative, faculties of persons attending, and participating in, 'Herbalife'mass-meetings, appear to be fully-functioning?

  • What would happen if anyone attending, and participating in, a 'Herbalife' mass-meeting attempted to show dissent from the group's totally 'positive' Utopian controlling scenario?

  • In recent history, what other centrally-controlled, non-democratic mass-movements (occulted by labyrinths of legally-registered corporate structures) have secretly raised mountains of tax-free cash for their self-appointed sovereign leaders, by obliging their unquestioning adherents to keep buying publications, recordings, tickets to meetings, esoteric accessories, uniforms, badges, etc., on the pretext that, by doing so, they can eventually build, and enter, a future, exclusive, secure Utopian existence?





  • Could the 'Herbalife' racketeers use their paid-association with me (Madeleine Albright) to try to give the appearance of association with other (even-more influential) persons? 
  • As a former high-ranking member of the US government and public servant (particularly, one who has represented the people of the USA internationally), shouldn't I always exercise the utmost caution before entering into any commercial arrangement in which not only my name and reputation, but also the name and reputation of the US government, might possibly be used to facilitate the committing of criminal acts? 












During the last 6 years, Madeleine Albright's company , 'Albright Stonebridge Group,' has received approximately ten millions  dollars from a gang of blame the victim 'MLM income opportunity' cultic racketeers. In return for this pile of stolen cash, Ms. Albright has betrayed every single value that she (and her late father) ever claimed to have stood for, by enthusiastically participating in committing fraud and obstructing justice. 




'Herbalife's'most-useful idiot, Madeleine Albright, and her associates, can have absolutely no moral or intellectual justification for holding onto the ten millions pieces of silver they have received from the bosses of the 'Herbalife'racket.




Ms. Albright's only possible ecape from this shameful situation, will be silence or a limp claim of ignorance. However, if, after being confronted with reality, Ms. Albright still insists that 'Herbalife/MLM' has been an entirely lawful enterprise and that she has done no wrong, then she too should be personally held to account.




With an irony that is close to exquisite, Madeleine Albright currently chairs the Advisory Council of  'The Hague Institute for Global Justice.'

According to its own Website: 

'The Hague Institute for Global Justice is an independent, nonpartisan organization established to conduct interdisciplinary policy-relevant research, develop practitioner tools, and convene experts, practitioners and policymakers to facilitate knowledge sharing. Through this work the Institute aims to contribute to, and further strengthen, the global framework for preventing and resolving conflict and promoting international peace.




The Hague Institute for Global Justice, or simply The Hague Institute, was established in 2011 by the city of The Hague, key Hague-based organizations and with support from the Dutch government. Located in the city that has been a symbol of peace and justice for over a century, The Hague Institute is positioned uniquely to address issues at the intersection of peace, security and justice.'


http://thehagueinstituteforglobaljustice.org/index.php?page=About_Us-Organization-About_us&pid=145


Dr. Madeleine K. Albright


Chair

Chair of Albright Stonebridge Group and former Secretary of State of the United States of America
Madeleine K. Albright is Chair of Albright Stonebridge Group, a global strategy firm, and Chair of Albright Capital Management LLC, an investment advisory firm focused on emerging markets. Dr Albright was the 64th Secretary of State of the United States. In 1997, she was named the first female Secretary of State and became, at that time, the highest ranking woman in the history of the U.S. government. From 1993 to 1997, Dr Albright served as the U.S. Permanent Representative to the United Nations and was a member of the President’s Cabinet. She is a Professor in the Practice of Diplomacy at the Georgetown University School of Foreign Service. Dr Albright chairs both the National Democratic Institute for International Affairs and the Pew Global Attitudes Project and serves as President of the Harry S. Truman Scholarship Foundation. She also serves on the Boards of the Council on Foreign Relations, the Aspen Institute and the Center for a New American Security.


The Herbalife logo is seen on a building housing some of their offices in downtown Los Angeles, California April 28, 2013. REUTERS/Lucy Nicholson
'Herbalife is a global nutrition company publicly traded on the New York Stock Exchange. We have more than 7,400 employees, millions of customers and for more than 30 years we have been committed to bettering the lives of those we touch with products that support and encourage a healthy, active lifestyle.' http://iamherbalife.com/






The latest, predictable move by the 'Herbalife' Ministry of Truth, is the creation of a kitsch, new Website which serves up a veritable feast of reality-inverting Utopian 'MLM' propaganda; all of which has been designed to obstruct justice in order to continue to commit fraud. 




Despite what they now steadfastly pretend to be reality, for decades, the propagandists at the 'Herbalife' Ministry of Truth have been constantly repeating the absurd lie that 'Herbalife' has 'helped millions' of people to 'realize' their 'financial dreams.'




http://mlmtheamericandreammadenightmare.blogspot.fr/2012/05/racketeer-influenced-and-corrupt.html 

As ever, this sinister new broadcast-platform for the 'Herbalife' Lord Hee Haws to recite their latest inflexible script, fits into an overall pattern of ongoing, major, racketeering activity as defined by the US federal Racketeer Influenced and Corrupt Organizations Act, 1970




 

'The purpose of Newspeak was not only to provide a medium of expression for the world-view and mental habits proper to the devotees of Ingsoc, but to make all other modes of thought impossible. It was intended that when Newspeak had been adopted once and for all and Oldspeak forgotten, a heretical thought — that is, a thought diverging from the principles of Ingsoc — should be literally unthinkable, at least so far as thought is dependent on words. Its vocabulary was so constructed as to give exact and often very subtle expression to every meaning that a Party member could properly wish to express, while excluding all other meanings and also the possibility of arriving at them by indirect methods. This was done partly by the invention of new words, but chiefly by eliminating undesirable words and by stripping such words as remained of unorthodox meanings, and so far as possible of all secondary meanings whatever.'

Georges Orwell (Appendix to 'Nineteen Eighty-Four')


The purpose of 'MLM Income Opportunity' jargon is not only to provide a medium of expression for the unquestioning world-view and mental habits proper to the core-adherents of 'Herbalife,'  but to make all other critical and evaluative modes of thought impossible. It is intended that when 'MLM Income Opportunity'  jargon has been adopted once and for all and traditional language forgotten, a heretical thought — that is, a thought diverging from the 'positive' principles of  'Herbalife'  - should be literally unthinkable, at least so far as thought is dependent on words. Its vocabulary is so constructed as to give exact and often very subtle expression to every 'positive' meaning that an 'MLM Distributor' can properly wish to express, while excluding all other 'negative' meanings and also the possibility of arriving at them by indirect methods. This is done partly by the invention of new 'positive' words and phrases ('Herbalife', 'Multi-Level Marketing', 'Distributor' , Independent Business Owner,'), but chiefly by eliminating undesirable 'negative' words and phrases ('cult', 'totalitarian', 'fraud', 'deception',  'brainwashing', 'victims', 'exploitation' , 'de facto slaves') and by stripping such words and phrases as remain of unorthodox meanings, and so far as possible of all secondary meanings whatever. 


David Brear (copyright 2014)

'Fortune Hi-Tech Marketing' - FTC Press Release.

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http://www.ftc.gov/news-events/press-releases/2014/05/ftc-settlement-bans-pyramid-scheme-operators-multi-level


The operators of a Kentucky-based pyramid scheme, which enrolled more than 350,000 consumers throughout the United States, Puerto Rico and Canada in the last four years, have been banned from multi-level marketing under a settlement with the Federal Trade Commission and the states of Illinois, Kentucky and North Carolina. The settlement also requires the operators to surrender assets totaling at least $7.75 million, which will be returned to consumers.
In January 2013, the FTC and the states charged the Fortune Hi-Tech Marketing (FHTM) defendants with deceiving consumers by claiming they would earn significant income through selling various products and services if they signed up as FHTM representatives. In recent years, the scheme targeted Spanish-speaking and immigrant communities. Participants were required to pay substantial start-up costs and monthly fees to retain their positions with the company. The court subsequently halted the deceptive practices, froze the defendants’ assets, and appointed a receiver over the corporations pending a trial.
After conducting its own investigation, the court-appointed receiver determined that FHTM’s main business was recruiting new members and not selling products and services as it claimed, and confirmed the allegations made by the FTC and the states. The overwhelming majority of participants – more than 98 percent – lost more money than they ever made. At least 88 percent of consumers did not even recoup their enrollment fees. To the extent that consumers could make any income, it was mainly for recruiting other consumers into FHTM’s scheme. More than 81 percent of the payments to participants were based on recruiting new members and not for the sale of products or services. Not surprisingly, at least 94 percent of consumers did not renew their membership after their initial year.
In addition to the multi-level marketing ban, the settlement order permanently prohibits Thomas A. Mills, Fortune Hi-Tech Marketing Inc., FHTM Inc., Alan Clark Holdings LLC, FHTM Canada Inc., and Fortune Network Marketing (UK) Limited from misrepresenting material facts about any product or service, including claims concerning how much money consumers can earn. The order also bars the defendants from selling or otherwise benefitting from customers’ personal information, failing to properly dispose of customer information, and collecting any additional money from customers.
The order imposes a judgment of more than $169 million, which will be partially suspended when the defendants have surrendered certain assets with an estimated value of at least $7.75 million, including assets of the deceased defendant Paul C. Orberson’s estate. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition. 
The settlement resolves all of the FTC’s claims against the defendants, as well as the claims brought by Illinois, Kentucky and North Carolina.
The Commission vote approving the proposed stipulated order was 4-0.  The order was entered by the U.S. District Court for the Eastern District of Kentucky, Central Division at Lexington, on May 9, 2014.
To learn more about multi-level marketing, read the FTC’s Multilevel Marketing and Business Opportunity Scams(Estafas de Oportunidades de Negocio).
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

CONTACT INFORMATION

MEDIA CONTACT: 
Frank Dorman
Office of Public Affairs
202-326-2674

David A. O’Toole
FTC’s Midwest Region 
312-960-5634

'Amway India' Boss, William Pinckey, arrested again

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http://economictimes.indiatimes.com/news/politics-and-nation/hyderabad-police-arrest-amway-indias-ceo-s-pinckney/articleshow/35624394.cms




'Kurnool Superintendent of Police Raghurami Reddy said Pinckney was apprehended in Gurgoan on Monday and was brought to Kurnool on a warrant. The arrest was based on a complaint alleging unethical circulation of money through Amway's operations.
"He will be produced in the court shortly. The CEO has been booked under the Prize Chits and Money Circulation. Schemes (Banning) Act," Reddy said.
This is the second time that the Amway India CEO has been taken into custody. A year ago Kerala Police arrested Pinckney and two company Directors on charges of financial irregularities.'





Shyam Sundar Reports From

Hyderabad City:

 

Amway CEO William Pinckney arrested once again





Amway India Enterprises Chief Executive Officer William S Pinckney is arrested by Kurnool police headed by Superintendent of Police Dr Kolli Raghuram Reddy following a complaint lodged by an advocate Jagannadh Reddy.




It may be recalled that William Pinckney was arrested by Kerala police last year on the same charges of cheating and indulging in illegal money circulation schemes popularly known as Ponzi schemes. During that time also, not surprisingly, the Amway India Enterprises did not approach the judiciary for redressal of their grievance, if any, since it knew well that all the avenues of judiciary were already exhausted by the fraudulent company.

The Division Bench of Andhra Pradesh High Court has categorically stated in a landmark judgement that the business model of Amway India attracted the provisions of Prize Chits and Money Circulation Schemes (Banning) Act, 1978. Later, the Supreme Court upheld the judgement of AP High Court.

In essence, all the roads are closed on Amway and it is high time it closed all its illegal operations in the country.

It is hoped that the police would act soon on the other complaints pending against the Amway  and curb the illegal activities and put an end to the international fraud

A complaint filed against Amway

To                                                                                  Date: 22/3/2014
The Dy. Commissioner of Police,
CCS, Hyderabad City.

Respected Sir,

Sub:  Cognizable Offences of Promoting illegal Money Circulation Scheme, cheating and looting the gullible public with the promise of get quick rich scheme by the Amway India Enterprises and its promoters, members in Hyderabad City in the guise of sale of health and dietary supplement products – Request to inquire and take action against Amway India Enterprises, its promoters, members for indulging in cheating, promotion of illegal Money circulation scheme – Regarding.
*************

1.       I, M V Syam Sundar, Secretary, Corporate Frauds Watch Society, Hyderabad, humbly submit that Amway India Enterprises set up office near Yasoda Hospital, Somajiguda, Hyderabad (which lies in the jurisdiction of the officer) and has been promoting illegal Money Circulation Scheme in the guise of sale of goods by enrolment of members in chain system with the inducement of get quick rich. The details of the Amway India Enterprises are as follows.
2.       The Enrolment scheme of the Amway:
          Amway is a company registered under the Companies Act. The scheme of Amway is 6-4-3 scheme. The first person has to sponsor 6 persons and these 6 persons have to sponsor 4 persons each totalling 24 persons and in turn these 24 persons have to sponsor/enrol 3 persons each totalling 72 persons. Thus these 103 (1+6+24+72) persons are called as one leg for income calculation purpose and this chain keeps on goes unchecked. The person should be enrolled by an already enrolled member so as to maintain chain. Initially, the entrance fee of the Amway is Rs.4,500/-. Now waived this entrance fee, but the new entrants have to purchase products worth Rs.4,500/- otherwise their membership will expire. After payment of some amount, an identity card and some products will be delivered by the company at the time of joining in the name of business kit. Joining a member into the scheme is treated as sale of products. The new person who joined in the scheme is called Amway Business Owner or ADA or ABO or downliner. The person who made the new member to join in the scheme under him is called upline member. Commissions are given not only on the event of personal efforts of their direct enrolment/sponsoring but also on the contingency relative or applicable to sponsoring of new members by their downline members. The promise of commission on the enrolment of new members will be as follows:

Sl. No.
No. of persons to be joined by self or downline members
Promise of commission in percentage
Business turn over credited in the members account based on his sponsoring activity of new members
1.
3 Persons
6%
Rs.13,500/- (3 persons xRs.4500/-)
2.
10 persons
9%
Rs.45,000/-
3.
20 persons
12%
Rs.90,000/-
4.
40 persons
15%
Rs.1,80,000/-
5.
70 persons
18%
Rs.3,35,000/-
6.
100 persons
21%
Rs.4,50,000/-

          Apart from this Amway induces that it will give Rs.50,925/- per month if any person sponsor or enroll 102 persons under his downline. The commissions are said to be distributed to all the members in the chain/network from last person to Amway in U.S.A. as commissions on group turnover.

3.       Amway company further has been awarding titles to its members based on their enrollment of new members into its scheme. There are 22 levels in the scheme of Amway namely 1) Silver, 2) Gold, 3) Platinum, 4) Ruby, 5) Founders Platinum, 6) Founders Ruby, 7) Sapphire, 8) Founders Sapphire, 9) Emerald, 10) Founder Emerald, 11) Diamond, 12) Founders Diamond, 13) Executive Diamond, 14) Founders Executive Diamond, 15) Double Diamond, 16) Founder’s Double diamond, 17) Triple Diamond, 18) Founder’s Triple Diamond, 19) Crown Diamond, 20) Founder’s Crown, 21) Crown Ambassador and 22) Founder’s Crown Ambassador.  The title holders will get huge and fabulous easy money in the form of group income which purely depend on the enrolment of new members into the scheme but not depend on the sale of products.

 4.      During seminar, the members of Amway/speakers have brainwashed to target wives of Govt. officials, middle class, retired persons, unemployed youth to get them into the scheme so as to spread network.

5.       The Hon’ble High Court of A.P. also held vide WP 20470/2006 that the scheme of Amway is nothing but illegal Money Circulation Scheme and the Hon’ble Supreme Court of India also upheld the same vide SLP No.13414/2007.  Moreover  the Government of A.P. has also issued a G.O. Vide G.O.Ms.No.178 dated 15/9/2008 restraining the Amway from issuing advertisements, still Amway has been issuing advertisements in contravention of The Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
6.       The Hon’ble High Court of AP in Speakasia case (CRLP 5626/2011) held that there is no need of any loss or misappropriation of funds to attract an offence under Prize Chits and Money Circulation Schemes (Banning) Act 1978. Mere informing a scheme, which covered under the money circulation scheme and enrolling members as subscribers, itself is an offence. Further Hon’ble Supreme Court of India in Kuriachan Chacko case (2008(8) SCC 710) held that the scheme of enrolment of members leads to mathematical impossibility that amounts to cheating, as such the Amway has been cheating and promoting the illegal money circulation scheme in the guise of sale of products.
7.       I submit that so far Amway India Enterprises has cheated lakhs of people in Hyderabad and looted crores of rupees from the members of the Hyderabad by promoting illegal Money Circulation Scheme.
8.       Hence, I pray that the Dy. Commissioner of Police, CCS, Hyderabad may be pleased to initiate criminal action against Amway India Enterprises, its promoters and members for cheating, looting by extortion the hard earned money of gullible public by making false promise of get quick rich, by putting mental torture in the name of seminars and for promoting illegal money circulation scheme in the guise of sale of products by enrolment of members into its scheme.
Yours faithfully,

(M. V. Shyam Sundar)

Copy to Addl. Commissioner of Police (Crimes), Hyderabad City.
Copy to Commissioner of Police, Hyderabad City.



'Amway' already judged unlawful in India.

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Bill Pinckney, CEO of Amway of India. He was taken into custody in India on Monday, May 26, 2014.

'Amway India Enterprises' Chief Executive Officer William S. Pinckney has been arrested for a second time this week; whilst senior Indian police officers are openly describing 'Amway'as an enormous 'racket.' Pinckney is reported as being of joint American and Indian nationality, but holding an Australian passport




http://innlivenews.in/2013/11/16/cid-cautions-public-against-amway/

Previously, the Indian police have issued clear warnings to the public not to get involved with 'Amway,'and they are treating the matter of'Amway' as criminal fraud disguised as 'legitimate business.'




Meanwhile, US-based'MLM Income Opportunity' racketeers are now doing everything they can to trivialise all these events and to have their own criminal activities effectively placed above the law in India. The'Amway' Ministry of Truth has already swung into (reality-inverting) action, claiming that 'Amway' is the victim and that the Indian authorities simply don't understand how 'Amway' and 'MLM Direct Selling' functions.

http://online.wsj.com/articles/second-case-brought-against-amways-india-chief-1401388981

Sean MClain of The Wall St. Journal reports


NEW DELHI—The head of Amway Corp.'s Indian business was arrested for a second time this week as police investigate allegations that the American direct-selling company is violating a law against pyramid schemes.
Amway India Chief Executive William Scott Pinckney was already in jail in the Indian city of Kadapa when police from another municipality showed up Wednesday and transferred him to another jurisdiction for further questioning by police, in what Amway called "an interesting and curious sequence of events."
No charges have been filed in either case, and Mr. Pinckney has been remanded to custody for police questioning.
Mr. Pinckney had been arrested Monday at Amway's Indian headquarters outside New Delhi and taken to a police station more than 1,000 miles away in the southern state of Andhra Pradesh.
In both cases, police are investigating complaints alleging that Mr. Pinckney and Amway had broken an Indian law against informal lotteries and so-called money-circulation schemes, a kind of pyramid scheme.
Amway said neither Mr. Pinckney nor the company had done anything wrong, and that authorities didn't understand the nature of Amway's operations. Amway distributors earn money from products sold to consumers themselves and by other people they bring into the business.
The allegations are "frivolous and give a misleading impression about our business," Amway said in a statement. The company also noted the content of the complaints was "identical" and they were "filed by advocates or activists."
Police said both cases are related to alleged violations of the law banning pyramid schemes. The case for which Mr. Pinckney was first arrested was filed after P. Rama Jaganatha Reddy, a local lawyer, said he was approached to become an Amway distributor. The complainant in the latest case said he was told by other Amway distributors that he would lose his distributorship if he failed to recruit new distributors. Mr. Reddy couldn't be located for comment.
Mr. Pinckney, who was in custody, couldn't be reached for comment. His attorney didn't immediately respond to a request for comment.
Indian courts increasingly are willing to consider criminal liability for executives related to the actions of their companies, said Mritunjay Kapur, head of risk consulting at KPMG in India.
The biggest risk corporations face, he said, "is compliance with the various regulations that are sometimes complicated and have gray areas."
A dispute over payments between a Samsung Electronics Co. unit and one of its suppliers led an Indian court in April to summon Samsung Chairman Lee Kun-hee to come to India to face criminal charges. Samsung has denied wrongdoing and said Mr. Lee has no connection to the case.
These sorts of business-related complaints aren't new, but what has changed recently is that Indian courts are now responding with arrest warrants.
"It's a mind-set change," said Harish Salve, an attorney who has represented Amway India in the past. "This began four-five years ago," Mr. Salve said, adding that before that, "there was a feeling that the rich and mighty were above the law."
In India, even some civil-code violations can lead to jail sentences, said Rajat Mukherjee, a partner at Indian law firm Khaitan & Co. He said statutes now prescribe jail terms for offenses such as not complying with labor regulations or failing to contribute to employees' social-security plans.
On Wednesday, a magistrate in Kurnool—where the original complaint was filed—denied bail to Mr. Pinckney after local police sought to keep him in custody at the Kadapa jail for questioning, police said. Later that day, officers from the city of Khammam arrested him at the Kadapa jail, said Ramana Moorthy, a police inspector from Khammam.
"We drove with him overnight for 10-12 hours and produced him before a magistrate at 8 a.m." on Thursday in Khammam, Mr. Moorthy said. A magistrate in Khammam has ordered Mr. Pinckney held in Warangal central jail, 340 miles from Kurnool. Mr. Pinckney is under judicial custody until June 10.
A local resident Gollaubudi Rama Rao had filed a complaint on May 19 with the Khammam police, Mr. Moorthy said. "He told us that he took membership with Amway in 2012 and they asked him to recruit other members. He was told that if he didn't recruit others then his membership would be canceled," Mr. Moorthy said.
Mr. Rama Rao couldn't be located for comment.
The Khammam police filed an arrest warrant with a magistrate in Khammam after seeing on television that Mr. Pinckney had been arrested in Kurnool, Mr. Moorthy said.
Amway and other direct-selling companies want a law in India defining direct selling to make it clear that they aren't the same as a pyramid scheme. "There is no clarity in the regulations; they think we're doing money circulation," Amway spokesman Yoginder Singh said.
A money-circulation scheme is an Indian term for a type of pyramid scheme in which money is paid to the enroller for adding members to the scheme.
_________________________________________________________________
Unfortunately, 'The Wall St. Journal' has completely failed to report these key- facts:


(Readers should note that the WSJ has previously participated in covering up the 'Amway' racket http://mlmtheamericandreammadenightmare.blogspot.fr/2012/03/chairman-and-ceo-of-amway-have.html).


'Amway's' so-called 'MLM income opportunity' has already been closely examined, and judged unlawful, by the High Court of Andhra Pradesh in 2007. At that time, the court even began to examine how 'Amway' had got into India in the first place.





In June 1994, representatives of the US-based‘Amway’ crime families approached the Indian Ministry of Commerce and Industry (Dept. of Industrial Development) bearing gifts.






By steadfastly pretending affinity with officials (who, naturally, wanted to believe that all external investment creates employment), the ‘Amway’ crime families initially sought an agreement (renewable biannually) which simply paved the way for the creation a privately-controlled, unlimited-liability, commercial company,‘Amway India Enterprises.’ As a subsidiary (entirely owned by its American parent company), the representatives of the ‘Amway’ racketeers meekly accepted that ‘Amway India Enterprises’ would be forbidden to manufacture or import. The proposed company would be permitted only to use its ‘Multi-Level Marketing Business Model’ to sell products sourced from local, independent, Indian manufacturers. 





Furthermore, ‘Amway India Enterprises’ was obliged to file a separate agreement with the Reserve Bank of India, allowing the proposed subsidiary to transfer capital to, and from, its parent and, thus, act as a de facto, foreign exchange dealer.

Consequently, without any informed scrutiny, officials at the Indian Ministry of Industry, Secretariat for Industrial Approval (Foreign Collaborations II Section) rubber-stamped the application for the proposed 'Amway' company (within less than two months) on August 26th 1994.




Twelve months later, 'Amway India Enterprises'was legally-registered after final approval by the Indian 'Foreign Investment Promotion Board.'







In this way, America’s contemporary version of the Trojan Horse was dragged unnoticed into India with the assistance of the country’s own naïve regulators. However, it lay dormant until May 5th 1998 when a network of regional offices began to be established.





Six years later, the destructive contents finally began to spill out. On August 8th 2004, the (apparently safe) original (biannual) agreement was mysteriously altered (at the request of the corporate officers of ‘Amway India Enterprises’) allowing the unregulated manufacture, and/or importation, of ‘Amway’s’ own range of effectively-unsaleable household, beauty and health products.

At no stage did Indian officials bother to apply common-sense and ask how the so-called ‘MLM Business Opportunity’ could possibly be economically-viable, and lawful, when ‘Amway’ products were now, self-evidently, several times the price of equivalent (and often superior) merchandise widely-available in traditional Indian retail outlets? Yet, implicit to the modified agreement was the understanding that ‘Amway India Enterprises’ would respect Indian law and recruit non-salaried agents who could earn commission payments from retailing products to the public. In plain language, Indian officials were deceived by the de facto agents of US-based racketeers.

That said, it is not known what other inducements (if any) these conveniently-blind civil servants received.

The guts of above information comes from a landmark judgement given on July 19th 2007 against ‘Amway India Enterprises’ by Chief Justice G.S. Singhvi, and Justice C.V. Nagarjuna Reddy, of the High Court of Judicature, Andhra Pradesh, Hyderabad.





In 2006, the Criminal Investigations Dept. of the Hyderabad police raided, and sealed, the local offices of ‘Amway India Enterprises’ arresting various employees, following a particularly detailed complaint filed by A.V.S. Satyanarayana under the ‘Prize Chits and Money Circulation (banning) Act, 1978.’ This courageous individual confessed that he had been deceived into wasting a significant amount of time and money after having being subjected to overwhelming psychological pressure to join ‘Amway’ by two dominant men in his own social circle. Within three days of the registration of this complaint, aggressive lawyers acting for ‘Amway India Enterprises’ issued two writs against the Hyderabad CID. Typically, Amway’posed as the innocent victim under attack. Ignoring all quantifiable evidence to the contrary, the lawyers steadfastly pretended that their employer’s ‘MLM Business Opportunity’ was entirely legal and that ‘Amway India Enterprises’ was acting with the full-approval of the Indian government. Therefore, the Andhra Pradesh police had neither reason nor authority to launch such a heavy-handed investigation, and, thus, damage, a legitimate business. At the same time, both the lawyers and corporate officers of‘Amway India Enterprises’ tried to convince the world that Satyanarayana was a pathetic liar who had filed a malicious complaint as the result of a marital/financial dispute which had, itself, resulted in his pursuing a vendetta against members of his family who were ‘Amway Distributors.’ 






Ironically, it was‘Amway India Enterprise’s’ own malicious writs which brought the company under the rigorous scrutiny of the Andhra Pradesh High Court.

Simply by applying common-sense, Chief Justice Singhvi and Justice Reddy were immediately able to see that the ‘Amway MLM’ fairy story is far too good to be true. Then, by ignoring the scripted-lies of ‘Amway’s’ attorneys, and by concentrating on the compelling testimony of the victim (backed up by documentary evidence), they deduced that the so-called ‘MLM Income Opportunity’ is in breach of Indian legislation. Despite the mystifying, linguistic and mathematical complexity of ‘Amway’s’ corporate camouflage, de facto agents of the company actually propagate the self-gratifying delusion that limitless prosperity can eventually be obtained without any further effort simply by regularly purchasing products and recruiting others to do the same, etc., ad infinitum. As a consequence, the two writs were dismissed, and the High Court of Andhra Pradesh ordered that the Hyderabad Criminal Investigation Dept. should be allowed to continue to follow whatever procedures are permitted by law to hold the corporate officers of ‘Amway India Enterprises’ to account.




Seven years later, despite the boss of 'Amway India Enterprises,' and two other corporate officers, being arrested for, and charged with, fraud in the Indian State of Kerala in 2013, the 'MLM Income Opportunity'virus still continues to infect India, whilst India legislators continue to be approached by the representatives of US-based racketeers who, obviously, do not wish to have their real activities rigorously investigated by independent Indian law enforcement agents.


 
http://en.wikipedia.org/wiki/Sachin_Pilot

Although he is only 37 years old, Sachin Pilot (b. 1977) was the American-educated, Indian Minister for Corporate Affairs at the time of Willima Pinckney's first arrest in 3013. Sachin Pilot has previously worked for the British Broadcasting Corporation in India, as a well as for the American-based multi-national, General Motors. 



Sachin Pilot with his party, and nation's, leader, Manmohan Singh

http://en.wikipedia.org/wiki/Indian_National_Congress
http://en.wikipedia.org/wiki/Rajesh_Pilot

Sachin Pilot, whose late father, Rajesh, briefly led the the Indian National Congress party, is a member of the same party (now led by the former Indian Prime Minister, Manmohan Singh) as well as a member of Indian Parliament and a serving, regular officer in the Indian Territorial Army. 



Unfortunately, young Sachin Pilot (like his American equivalent, Sarah Palin) seemed to have been promoted to his lofty governmental post more for his clean-cut, good-looks, than for his intellectual capacities; for, if he sincerely believes that 'Amway India Enterprises' is a 'law abiding and reputable company' (as was reported last year), then he was probably far too stupid even to be making the tea at the Indian Corporate Affairs Ministry, let alone running it.

http://www.dnaindia.com/india/1841200/report-clearer-laws-on-tackling-fraud-schemes-soon-sachin-pilot-on-amway-issue
 





Despite his previous, apparently well-informed pronouncements, on hearing of the arrest of the managing director of 'Amway India Enterprises' on fraud charges in 2013, Sachin Pilot is reported as saying:

'it is disappointing that such an eventuality came about.' 

'the government will remove as early as possible the ambiguities in laws aimed at tackling fraudulent investment schemes.'

'We (Corporate Affairs Ministry) will work closely with concerned ministries and industries to remove the ambiguity in the law (related to tackling ponzi and other fraudulent schemes) as soon as possible.' 

'While steps should be taken to crack down on fraudulent companies running dubious investment schemes, companies that are reputed and abiding by the law must be delineated,'

'Such events  might negatively affect the prospects of our country as an attractive investment destination,'

'While we take strong actions against ponzi schemes, we need to be careful not to create a vitiating atmosphere for reputed and law abiding companies.' 


When translated into plain English, Sachin Pilot has apparently said that he had absolutely no intention of allowing the Indian police or the courts to do their job and protect the people of the republic of India from the biggest 'MLM income opportunity' racketeers! On the contrary this young fellow is reported as having steadfastly pretended moral and intellectual authority whilst, at the same time, foolishly broadcasting his urgent intention to place all the biggest  'MLM income opportunity' racketeers above the law of the land, before their Indian agents can be convicted of fraud and sent to prison.

Apart from the fact that Sachin Pilot has already been approached by countless deluded 'MLM' adherents, begging him to save their 'businesses, there is another explanation for his morally, and intellectually, bankrupt commentary. Namely, the billionaire racketeers whom Sachin Pilot apparently claimed he selflessly wanted to protect in the wider-economic interests of the people of the Indian republic, have been following the same subversive tactics which have enabled them to dodge criminal prosecution in the USA, and elsewhere, for decades.

Thus, I have some common-sense questions which I would like to put to Mr. Sachin Pilot:

  • What exactly has been your own, and/or your political party's, financial connection, with the foreign-controlled, major, organized crime group known as 'Amway?'

  • What exactly has been your own, and/or your political party's, financial connection with the foreign-controlled, parallel organization known as the 'Direct Sellng Association?'

  • What quantifiable evidence have you seen to prove that any member of the so-called 'Direct Selling Association' has actually been regularly retailing goods, and/or services (based on value and demand) to the Indian public, rather than operating a dissimulated closed-closed market swindle, or pyramid scam, in which unlawful investment payments (based on the false expectation of future rewardhave been laundered as retail sales simply by offering a never-ending chain of temporarily-deluded victims of the swindle, effectively-unsaleable wampum?   
  • What possible lawful reason can you supply to explain why you now, urgently don't want the above serious matters to be fully-investigated by independent Indian law enforcement agents and put before independent Indian judges by independent Indian prosecutors? 

In an ideal world, it wouldn't be me putting these common-sense questions to Sachin Pilot. Self-evidently, if they have been reported accurately (and I have no reason to doubt that they have), Sachin Pilot's thoughtless pronouncements are further evidence that, due to the length of time it has survived and amount of capital it has already unlawfully-generated, the absurd, but nonetheless pernicious, lie entitled 'MLM income opportunity,' represents an ongoing threat to democracy and the rule of law, all around the globe.





More than half a century of quantifiable evidence, proves beyond all reasonable doubt that what has become popularly known as 'Multi-Level Marketing' is nothing more than an absurd, cultic, economic pseudo-science, and that the impressive-sounding made-up term 'MLM,' is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organized crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim closed-market swindles or pyramid scams (dressed up as 'legitimate direct selling income opportunites'), and related advance-fee frauds (dressed up as 'legitimate training and motivation, self-betterment, programs,' etc.).



David Brear (copyright 2014)

India can hold back 'MLM income opportunity' racketeering.

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All so called 'MLM direct selling schemes' are unlawful in the Indian Republic under common-sense criminal legislation dating from 1978:

The Prize Chits and Money Circulation Schemes (Banning) Act. 


http://indiankanoon.org/doc/1621737/






Currently, in the wake of the of the boss of 'Amway India Enterprises', William S. Pinckney, being arrested under the PCMC Act in Andhra Pradesh, the agents of US-based 'MLM income opportunity'racketeers have been doing everything they can to trivialize these events in an attempt to have so-called'MLM' companies placed above the law in India.



Officers of the so-called 'Indian Direct Selling Association' have already infiltrated state and national government in India, trying to tamper with proposed new technical legislation (ostensibly designed to replace the role of the police and the PCMC Act  in protecting the Indian public from dissimulated pyramid and Ponzi schemes) by redefining so-called 'MLM Direct Selling income opportunities' as automatically legal because they involve products. Thus, attempting to have so-called 'MLM' treated as an entirely separate issue to pyramid and Ponzi schemes, in the Indian Republic.




The proposed new Indian legislation already contains the familiar, vague and essentially-meaningless definition of 'direct selling' (referring to 'customers' and 'end users') which has obviously come from 'MLM' racketeers in the USA.

What has been required for a very long time (not just in India, but all around the globe), is a universal, accurate, common-sense, legal definition of what constitutes an economically-viable direct selling scheme, and which cannot be tampered with by the agents of racketeers or misinterpreted by amoral attorneys.

Thus, vague, and essentially meaningless, terms such as 'customers' and 'end users,' cannot be employed in any accurate definition of lawful direct selling, because these words can be taken to mean the direct sellers themselves in an economically unviable closed market.

A lawful direct selling scheme can only be one sponsored by persons who can immediately provide quantifiable evidence (on demand), that their scheme has ultimately always derived the overwhelming majority of its revenue via its salaried, and/or non-salaried, commission agents regularly retailing products, and/or services, to the general public for a profit (based on value and demand).

Common-sense should reveal to any honest law enforcement agent, legislator or judge, that any alleged 'direct selling scheme' which does not fit the above accurate definition, and which has been offering economically-incestuous commission payments to its own agents on their own purchases, and on the purchases of these agents' own recruits, and on the purchases of the recruits of these recruits, etc. ad infinitum, is a dissimulated closed-market swindle or pyramid scheme without a significant, or sustainable, source of revenue other than its own losing participants, and which, therefore, has been obstructing justice by laundering unlawful losing investment payments (based on the false expectation of future reward) simply by arbitrarily, and falsely, defining these transactions as: 'sales to customers and end users'.

In any alleged 'direct selling scheme,' if products, and/or services have not been regularly retailed to the general public (based on value and demand), then they might as well not exist. This why I usually refer to them as 'wampum.'


David Brear (copyright 2014)

Sherman Unkefer, 'MLM income opportunity' racketeer exposed.

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http://www.phoenixnewtimes.com/2014-06-12/news/sherman-unkefer/

Sherman Unkefer is a classic narcissistic charlatan, his criminal activities can be traced back more than 30 years, but thanks to the determination of his step-sons, Harley and Mark Davidson, he is only just now being held fully to account. Unkefer has been deeply involved with blame-the victim 'MLM income opportunity'racketeering in general, and with 'Xango'in particular.


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Once upon a time in the wonderland of 'Xango,' when modern western medical science didn't have a clue what to do and the Angel of Death was hovering, behold there was a miracle.









Some casual observers have believed that all the absurd 'MLM' propaganda (like that contained in the above kitsch 'Xango' videos) is not particularly dangerous; that is, until they have compared it with quantifiable reality:


The following testimony was sent to me by Mark Davidson who, along with his brother, Harley, witnessed just how lethal total belief in an absurd Utopian 'MLM Income Opportunity' fairy story can be.


________________________________________________________________________


'Harley and I have been warning people about Xango for years. Much like you, our experience with Xango and the whole MLM cult mentality comes from our own personal experience via a family member, our mother. Unfortunately the con job perpetrated by Xango and more specifically Dr. Templeman cost my mother her life. I can honestly say that Xango and Dr. Templeman killed my mother.


Sharon Davidson Unkefer (1940-2008) died as a result of the twin guided-delusions that modern western medical science is a scam controlled by big drug companies, and that massive doses of ($40 per bottle) 'Xango/Mangosteen Juice' can cure cancer.




In June of 2008, a CT scan revealed a growth on my mother's spine. The doctor reviewing the scan indicated that it was more than likely cancer and advised her to seek immediate professional help from a qualified Oncologist. I know, I was in the room.


'MLM' racketeer and chief  'Xango' quack, Dr. Templeman
http://xangoconfidential.wordpress.com/

What my mother did instead was contact Dr. Templeman, the self proclaimed mangosteen expert and medical researcher who was a personal friend and a paid pitch man for Xango.

Dr. Templeman is a retired MD (Family Practitioner) from Utah and also the father in law of the brother of one of the Xango founders. It is Dr. Templeman's literature claiming the amazing cancer curing Zanthones found in Xango that prompted the FDA warning letter in 2006. http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2005/ucm076067.htm


Dr. Templeman's forte is to essential blur the lines between junk science and dubious personal anecdotal stories with very small published scientific data. Being neither a published researcher nor ever having spoken at any credible institutions of health or science, the wannabe Jonas Salk routinely claims that Xango cures cancer. The crowds he claims he has spoken to are merely attendees at Xango corporate functions. Considering the average income for MDs in the US is around $60,000a year he's got a pretty good gig as a paid Xango executive flying the globe and being treated like a rock star at luxury hotels, exotic vacation destinations and tropical cruises.


(At the beginning of 2014, the official average income for a General Practice family MD in the USA, was approximately $101 736 - $141 431 http://www.healthcare-salaries.com/physicians/medical-doctor-salary-md).




What Dr. Templeman did upon learning of my mother's illness was to immediately fly out to her home, again I was there, and proceed to sell her on the notion of using an alternative health clinic and treating her cancer with massive doses of Xango. The alternative clinic is currently under criminal investigation. Needless to say, my mother was dead by mid August (two short months). What I witnessed during those two months was nothing short of criminal behaviour by a pack of greedy egomaniacs with absolutely no medical experience in treating cancer or any serious disease.

Even if you disregard the fact that Dr. Templeman is not a trained Oncologist or even licensed by the state of Arizona to practice medicine, the treatment she received was abominable! The basic minimal protocols of dealing with a deadly disease like cancer (pathology, staging diagnosis, treatment and pain management options) were never followed! The egomaniac Dr. Templeman acted as the primary physician and specialist and cut off all contacts with any of the doctors she was seeing. This, in and of itself, violates the most basic of all protocols in which the primary physician, especially Family Practitioner's, refers patients to specialists trained in specific diseases once that disease is diagnosed.

I can speak with some authority on this subject because in September of 2012 I was diagnosed with stage 3 colon cancer. I by no means claim to be an expert, but I can tell you through personal experience and dealing with numerous experts from Oncologists, Radiation Oncologists, Surgeons, Technical and support staff who deal with this daily is that my mother was cheated out of her fighting chance to beat cancer.

I was constantly asking questions and doing my own research and the bottom line is, unfortunately, the vast majority of people "suckered" into the alternative health cures are stone cold dead. I chose the traditional route and after both chemo, radiation and major surgery, I am in remission. Thank God for modern medicine and shame on those that advocate the hocus-pocus ancient Chinese secret cure for every thing that ails you.
The false hope and phony health claims of companies like Xango is an incredibly dangerous public health issue and is often overshadowed by the financial woes of it's victims. MLMs like Xango are a two sided coin that either leave you broke, dead or both.


Sharon Davidson Unkefer was married to convicted conman, turned exemplary 'Xango' millionaire shill, Sherman Unkefer. http://blogs.phoenixnewtimes.com/valleyfever/2010/08/sherman_unkefers_71_million_re.php

My mother was not only the top distributor for this company, she was one of the true believers and bought into the whole "Cancer Conspiracy" that big drug companies and the American Cancer Society are suppressing natural cures that companies like Xango preach at every opportunity meeting. It's all bullshit by a gang of the most egotistical criminals, con men and liars the world has ever seen. But then again, you know this story all too well.

My brother and I, along with some other associates, have done a massive amount of research on this company and their product. The facts we have obtained would make your head spin. The amount of lies and deceit from giving themselves phony charity awards, criminal records, sick personal behaviour, constantly cheating the system they themselves have created and false medical claims abound. You hit the nail on the head when you called them cults!

A lot of the information I have not only comes from personal experience (witnessing my mother's involvement and 20 year roller-coaster ride of a whole slew of MLMs) but from legal documents uncovered through personal research and a personal lawsuit I am currently involved in. 

I hope at some point there might be enough of an outcry from the public to pass some real legislation that shut these companies down and ban all forms of MLMs. Unfortunately, the brainwashed masses who prop up these criminals continue to grind their way to a slow financial death with a big phony smile plastered on their faces and a "dynamic" opportunity to share with the world. Keep up the good work


Mark Davidson (copyright)







According to the authors of the frighteningly-familiar 'XANGO'  fairy story:

'XANGO, LLC, was founded in 2002, and is a privately-owned international network marketing company based in Lehi, Utah. The company markets and distributes XANGO Juice, a blended juice product consisting of mangosteen and other juices, and skin care, personal care, energy supplement and nutritional supplement products formulated with botanical ingredients. Since 2008 XANGO been selling more than $1.5 billions annually of products via more than one million distributors in 27 countries'




In the adult world of quantifiable reality, 'XANGO' has been the deceptively kitsch 'commercial' label hung over the entrance to a  dissimulated 'Prosperity Gospel' cultic, blame-the-victim, closed-market swindle, or pyramid scheme, and related advance fee frauds. Inside this progressively-incomprehensible and expensive- to-play game of Utopian make-believe, an endless chain of ill-informed victims have been told that they can achieve unlimited health, wealth, happiness, etc., simply through exactly duplicating the 'positive' example of 'Xango winners' (like Sherman Unkefer) and buying a regular quota of 'XANGO' products each month whilst recruiting their own social contacts to 'duplicate the same lawful MLM sales and marketing plan.' 

http://www.xango.com/recognition/distributor-recognition

In theory, profits automatically multiply as an individual 'Xango Distributor's' own network is built through geometric progression. In practise, other than the insignificant number of schills at the top of the recruitment-chain, the hidden overall rolling insolvency/churn rate for the so-called 'XANGO income opportunity,' has been 100%.

'XANGO' orgy of deluded self-gratification, Taiwan 2010



The 'XANGO' racketeers have been stealing money from the citizens of the USA, as well as those of Australia, Austria, Belgium, Bermuda, Canada, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Kazakhstan, Latvia, Malaysia, Mexico, Netherlands, New Zealand, Norway, Philippines, Portugal, Russia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Trinidad, United Kingdom and the Ukraine.  http://www.xango.co.uk/


Snakeoil




http://www.scribd.com/doc/2525317/Xango-Presentation-English

Like the latter-day snake oil pedlars they are, deluded 'XANGO' adherents have recited a precisely-worded script which pretended more than 20 human health benefits for their unique star product, 'XANGO' juice, including 'anti-inflammatory, anti-microbial, anti-fungal, anti-viral, anti-cancer, anti-ulcer, anti-hepatotoxic, anti-rhinoviral and anti-allergic effects.'  Promotional material for the product merely states that 'research has been carried out' into XANGO's capacity to prevent all manner of illness, from leukemia, tumours and diabetes to Parkinson's disease, depression and fatigue, and that  'antioxidants from the inedible rind of fruit provide health benefits.' However, there is no independent research-based evidence to prove any of these vague, and/or essentially meaningless, anecdotal claims. Consequently, 'XANGO' has already attracted the attention of the Federal Drug Administration and widespread criticism from within the medical profession.




Reminiscent of 'Nutrilite Double X' (concocted by Carl F. Rehnborg in the 1940s),  'XANGO' juice is just an inert blend of mangosteen aril and pericarp purée with juice concentrates of eight other fruits: apple, pear (juice and purée), grape, blueberry, raspberry, strawberry, cranberry and cherry. Other ingredients include citric acid, natural flavour, pectin, xanthan gum, sodium benzoate and patassium sorbate. Unfortunately, since 'XANGOproducts have comprised cheaply-procured common substances, but offered at exorbitant fixed-prices (e.g. 750ml of 'XANGO'juice is almost $40), they have been effectively-unsaleable on the open-market. 'XANGO' juice is at best a harmless placebo, but due to its price, the liquid is the eqivalent of a valueless amalgam of shiny base-metals being offered at the cost of pure gold.

'XANGOInternet propaganda



No matter what childish drivel they spout in defence of their egos, the overwhelming majority of people who have regularly handed over their cash in exchange for 'XANGO' wampum have clearly only done so under the delusion that they were duplicating a proven plan to achieve 'financial freedom forever;' for there is absolutely no quantifiable evidence that a significant quantity of 'XANGO' wampum has been retailed to the general public for a profit by 'XANGO' adherents. Indeed, the organization itself does not dispute this fact, but, like those of 'Amway,''Herbalife', etc. ,'Xango's' officers illogically claim that their company's products are bought solely due to value and demand.  Self-evidently, because the so-called 'XANGO MLM income opportunity,' has had no significant or sustainable revenue other than that deriving from its own constantly-churning, insolvent participants, its instigators have been operating a dissimulated closed-market swindle, in which losing-investments have simply been laundered as 'sales.' From all rational points of view, 'XANGO' wampum might as well not exist. 


2008121501
Chart depicting Bernie Madoff's claimed '18 years of constantly-expanding profits' (in red)
'XANGO' boss Gary Hollister

Exactly like Charles Ponzi, Bernie Madoff, Reed Slatkin, etc., the instigators of the 'XANGO' racket are narcissistic, economic alchemists who have bedazzled their victims with an avalanche of pseudo-scientific/financial hocus-pocus, in order to peddle them infinite shares of their own finite money. Amazingly, at the same time as Bernie Madoff was still steadfastly pretending tobe running the 'World's Largest Hedge Fund,'  the bosses of 'XANGO' began boasting that they were running the 'World's Fastest Growing Business.' 

Charles Ponzi

Ironically, in 1920, Charles Ponzi was also steadfastly pretending to be running the World's Fastest Growing Business, called the 'Securities Exchange Company.' By peddling worthless pieces of paper in denominations up to $50 000 (on which he personally signed a 'guarantee to refund bearers their initial investment + 50 % interest in 90 days'), within less than one year, Ponzi had collected more than $20 millions (the equivalent today of approximately quarter of a billion dollars). For months, people (including many police officers) were literally queueing to give Ponzi their cash, falsely-reasoning that nothing so large and visible could possibly be a fraud, and, anyway, if Ponzi was a crook, he would have been immediately arrested.

Doug Wead preaching
 the perverted 'MLM Prosperity Gospel'

Other than the fact that the two cultic rackets are essentially identical, the 'XANGO' bosses were at one time directly linked to the 'Amway' bosses via Doug Wead and Jean or John Godzich. Classically, victims of the initial 'XANGO' fraud have been deceived into buying publications, recordings, tickets to meetings, etc., on the pretext that these 'materials/tools' contain exclusive secrets, vital to achieving success. At the same time, victims have been drawn into the universal, blame-the-victim, closed-logic, cultic trap, in which they have been conditioned to visualise their 'dreams and goals' as future reality and to believe that they can only achieve the redemption of 'financial freedom forever' through exactly duplicating the 100% positive (i.e. unquestioning) belief and behaviour of their redeemed, multi-millionaire leaders. Thus, few victims have complained, because they have falsely-believed that failure to succeed in 'XANGO' is solely the fault of the individual who didn't believe totally. Sadly, most core-victims have been deceived into joining 'XANGO' by their own friends and relatives and, in turn, they have tried to deceive their own social contacts, making the ego-destroying truth even more difficult to face.


In order to further shut down the critical and evaluative faculties of victims and casual observers, the instigators of the 'XANGO' racket have used a proportion of their ill-gotten gains to infiltrate traditional culture. e.g. In November 2006, 'XANGO, LLC,' became the main corporate sponsor of Real Salt Lake (one of N. America's most-successful professional soccer clubs) in a 4 year deal costing  between $500 000 and $1 million per year. In 2006, the company gave a 5-year, $1 million grant to Orem, Utah arts council, for naming-rights to what is currently called the 'XANGO Grand Theater.' 


Utah Senator Orrin Hatch (b. 1934)

Utah Attorney General, Mark Shurtleff (b. 1957)

'XANGO, LLC,' has been the main contributor to the political campaign of Utah Senator, Orrin Hatch, giving $47 200 in 2008 and $46 700 in 2006. However, Orrin Hatch and various members of his family (in the 'lobbying' business) have been in receipt of huge quantities of stolen cash deriving from 'XANGO' and other similar 'Mormon' owned corporate structures registered in Utah. Indeed, the de facto agents of 'MLM income opportunity' racketeers have had a hand in writing an amendment to Utah State legislation, exempting 'MLMschemes from common-sense statutes which previously banned all endless-chain, pyramid frauds. The Republican, 'Mormon' Attorney General of Utah, Mark Shurtleff, who supported this amendment (SB 182), has been heavily-backed by Utah-based 'MLM' racketeers. Furthermore, Shurtleff has been a speaker at 'MLM' orgies of deluded self-gratification. http://www.sequenceinc.com/fraudfiles/2007/08/utah-attorney-general-improperly-endorsing-usana-health-sciences/  http://www.youtube.com/watch?v=Uv-H096uZHU


'MLM donations' to Mark Shurtleff, 2008
Orrin Hatch being paid to promote fraud at 'XANGO' HQ
http://www.nytimes.com/2011/06/21/us/politics/21hatch.html?pagewanted=all

It almost goes without saying that Orrin Hatch is also a Republican and an adherent of the 'Mormon Church.' He is a qualified attorney who has served as Chairman of the Senate Committee on Judiciary and as a senior member of the Senate Select Committee on Intelligence. In the recent past, Orrin Hatch has had aspirations to become a member of the US Supreme Court. http://en.wikipedia.org/wiki/Orrin_Hatch

Yet again, when the wider-picture is examined, 'XANGO' is revealed as being one small part of a pattern of ongoing, major racketeering activity (as defined by the US federal Racketeer Influenced and Corrupt Organizations Act, 1970, and clarified by subsequent US Supreme Court judgements); for without significant or sustainable external revenue, all so-called 'MLM income opportunities' have been variations of essentially the same cruel lie which has been repeated so often, that many people have come to accept it as the truth.


http://www.youtube.com/watch?v=PgYWIhkhpHI

http://romneyfacts.com/money.php?emp=XANGO

http://www.youtube.com/watch?v=r0H-NFeBco8




Again, it almost goes without saying that Mitt Romney has been receiving stolen money from the 'XANGO,' latter-day snake oil pedlars who continue to pose as 'Latter Day Saints.'


David Brear (copyright 2014)

What does the Jimmy Bakker tragicomedy tell us about the 'MLM' tragicomedy?

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Mark Hughes stole millions of dollars by acting the unoriginal role of ordinary poor man: turned millionaire superman. In this way, he deceived countless vulnerable persons into trusting him completely and into blindly-following an 'MLM Plan' to obtain unlimited: prosperity, health, happiness, etc. Yet the chances of receiving any overall net-profit from participating in so-called'MLM Income Opportunities', have always been effectively zero. Ironically, Mark Hughes died 14 years ago from an overdose of alcohol and anti-depressant drugs, but the profitable racket this angelic-looking charlatan instigated, has survived.




Currently, Mark Hughes' 'Herbalife' chapter of the pernicious 'MLM Income Opportunity' fairy story is under federal investigation in the USA, as a suspected fraud. However, the peddling of this apparently 'commercial / economic / legalistic / mathematical' fairy story as obtainable reality, is neither original nor unique and, consequently, this type of 'Prosperity Gospel' mass-deception, cannot be fully-understood in isolation. 






In the Bible, a story is told of Jesus feeding 5000 people with just a handful of loaves and fishes, and of basketfuls of leftovers being gathered after the feast. However, it is important to understand that, in the biblical tale, all Jesus asks for in return, is unquestioning belief in future redemption. Should some sanctimonious performer require of 5000 individuals the same unquestioning belief in‘Jesus the Redeemer,’ but exploit their faith to extract $1000 per head entrance to ‘The Miracle Buffet’ for the rest of their lives, then he/she would gross $5 millions. Unless the sanctimonious performer really does possess the superhuman power to turn the finite into the infinite, then his/her activity is an advance fee fraud (a form of theft).


Jim and Tammy-Faye Bakker, circa 1964

James (‘Jim’) Orson Bakker (b. 1940) is the son of Michigan ‘Dutch Pentecostalists’. In 1962, Bakker (aged 23), became a pastor in the ‘Assemblies of God.’ His diminutive wife was, Tamara (‘Tammy’)-Faye LaValley (1942-2007), the daughter of (divorced) Minnesota‘Pentecostalists.’ The couple met at ‘North Central Bible College.’ They went on to found a ‘joint-ministry’ in N. Carolina. 


Pat Robertson circa 1965

From 1964 until 1973, the fresh-faced young Bakkers worked in Virginia at ‘CBN’ (‘Christian Broadcasting Network’) for Pat Robertson. They were founder members of ‘The 700 Club’ (a televangelist programme in the style of a variety show). They also hosted ‘Come On Over’ - a daily programme for children, in which a glove puppet, ‘Susie Moppett,’ was used to explain ‘the Word of the Lord.’


Jan & Paul Crouch  4/24/98  HO
Paul Crouch and his wife, Jan, founded the 'Trinity Broadcasting Network' in 1973. They preached that the faithful should generously ‘sacrifice.'Illogically, they pretended that this would result in God rewarding the faithful with material wealth. In this way, the kitsch couple reportedly collected 'donations' totalling $93 million. 
paul-crouch


The Bakkers’ enormous success and their intimate friendship with Pat Robertson created a lot of jealousy at ‘CBN.’ They decided to go to California where they coined the catch-phrase, ‘PTL’ (‘Praise The Lord’), for ‘TBN’ (‘Trinity Broadcasting Network’) owned by Paul and Jan Crouch. Within a year, the Bakkers moved back East and created their own show, ‘The PTL Club.’ This soon generated a multi-million dollar income; it was screened by around 100 television stations. The Bakkers went on to found their own ‘PTL Television Network’ a.k.a. ‘The Inspirational Television Network’ in Charlotte, N. Carolina.



In Charlotte, the Bakkers became friendly with blame the victim 'MLM Income Opportunity' shills, Dexter and Birdie Yager, and Jim Bakker became an influencial 'Amway' recruiter / promoter.




At this time, Jim Bakker is said to have become heavily influenced by Dexter Yager. Indeed, there are some people who have claimed that Dexter Yager was behind the financial crimes Jim Bakker subsequently committed.






Jimmy and Tammy-Faye Bakker, circa 1982.



In 1982, Jim and Tammy-Faye Bakker used their popular cable programmes, ‘The PTL Club’ and‘The Jim and Tammy Show’ (which were eventually beamed into 13.5 millions American homes via 200 television stations), to launch ‘Heritage USA,’ the ‘World’s Largest Christian Theme-Park/Retreat Center’ to be built on a 4 square-mile site at Fort Mill, S. Carolina. To finance this, the Bakkers asked their television audience to send a minimum of one voluntary contribution per year to become a ‘Partner in Ministry’ (i.e. a person with the right to access ‘Heritage USA’). Jim Bakker created a series of corporate structures, including ‘Heritage Village Church and Missionary Fellowship’ to run the project. As the head of a tax-free religious organization, Bakker had no legal obligation to supply any material benefit in return for unspecified, voluntary donations. An estimated 1 million people contributed over a period of 6 years. The number of ‘Partners in Ministry’ stabilized at approximately 600 thousands. In this way, Bakker lawfully acquired absolute control of sufficient capital assets to build his Utopian project.





 Eventually,‘Heritage USA’ employed almost 3000 people. After ‘Disney Land’ and ‘Disney World,’ it was the third most-visited theme-park in the USA - boasting a reconstruction of ‘Old Jerusalem,’ a ‘Crystal Palace’ 30 000 seat Conference Center, a 1500 seat television studio, a ‘Crystal Tower’ Resort Hotel, a ‘Heritage Island Inspirational Water Park’ with Bible teaching on an artificial beach, etc. 





'Heritage USA'became a regular venue for 'Amway'meetings and rallies peddled by the Yager clan.




Bakker bought the childhood home of Dr. Billy Graham, and had it rebuilt as a shrine at ‘Heritage USA.’ 





In 1984, the Bakkers made another‘offer.’ In return for one mandatory minimum‘contribution’ of $1000, ‘Partners in Ministry’ could become ‘Lifetime Partners in Ministry’ (i.e. persons with the additional right to'4 days and 3 nights free accommodation annually in exclusive luxury hotels on the Heritage USA site for the rest of their lives’). 



Richard Dortch

This Christian time-share scheme was open to the public and involved a sales contract. Although this stated (in small print) that ‘accommodation was subject to availability,’ the officers of ‘Heritage USA’ were bound by federal law to supply what they’d sold. However, ‘Heritage USA’ president, pastor Jim Bakker, and his vice-president, pastor Richard Dortch, set no limits on the number of contracts.





Between 1984 and 1987, approximately 153 000 people paid the $1000 (certain individuals are now known to have given as much as $7000), but only one 500 room hotel was ever completed. The odds against getting a room were, in fact, more than 300/1. Although the overwhelming majority of applicants were simply told that no rooms were available, not one single contributing participant filed a complaint - the truth was unthinkable. Bakker’s image stared directly out of the slick advertising material, smiling benignly with his wife, son and daughter around him. He styled himself as ‘America’s Favourite Televangelist… Spiritual Adviser to: Jimmy Carter, Ronald Reagan and George Bush.




Tammy-Faye’s trademarks were her outrageous hairstyles, kitsch outfits and doll-like makeup. At the end of each ‘PTL’ show, she would sing a heart-rending hymn and pray that ‘God’ would ‘bless Heritage USA’ before fixing the camera and bursting into floods of mascara-stained tears. Behind this apparently absurd façade, between 1984 and 1986, the Bakkers awarded themselves over $5 millions in ‘salaries and bonuses. On one occasion, a private jet was chartered by the ‘PTL’ organization at a cost of $100 thousands, just to fly the couple’s wardrobes across the USA. They now advocated a ‘Gospel of Prosperity.’ This ostensibly ‘Christian’ doctrine was used as the false justification for buying a $200 thousands Rolls-Royce, 3 Cadillacs, various condominiums in California and a $600 thousands villa in Palm Springs. The gold plate in the bathrooms of the Bakkers’ 6 homes was alone, reputed to have cost $60 thousands whilst their pet dog slept in an air-conditioned kennel.



Tammy-Faye’s shopping addiction led to her being ridiculed as the ‘Imelda Marcos of televangelism.’ 




In 1987, Jim Bakker was dragged into a sordid sex scandal by Jessica Hahn (b. 1959), the supsiciously-glamorous 'Church secretary' of another ‘Pentecostalist’ pastor, Eugene Profeta. 


Fletcher
John Wesley Fletcher

Hahn (who later bared-all in ‘Playboy Magazine’) claimed that, whilst attending a national conference of Christian ministers in Florida in 1980 (when she was 21), she’d been drugged and raped for 15 minutes by Bakker and another preacher, John Wesley Fletcher, and that Bakker and Fletcher had then taken it turns to sodomise one another in front of her. Hahn approached a journalist at the ‘Charlotte Observer’ and threatened to file a multi-million dollar civil lawsuit. Bakker denied rape, but admitted that, in 1980, he’d had a 15-20 minute (one to one) consensual sexual encounter with Hahn in a hotel room in Clearwater Florida.‘PTL’ lawyers made a secret out-of-court settlement totalling $265 000 to keep Hahn from going to court. However, Bakker’s competitors (in the cut-throat televangelist business) acquired this intelligence. He was obliged to resign from his presidency and from his ministry. 



Jerry Falwell

Soon Jerry Falwell (1933-2007), ‘Baptist Minister,’ co-instigator and self-appointed leader of ‘The Moral Majority’ and the rising star of the ‘Religious Right,’ appeared to be taking over the ‘PTL’ Empire, but at Jim Bakker’s own request. However, at the last moment, Bakker changed his mind. A bitter struggle then ensued to seize Bakker’s television network which was, in effect, a licence to print money. Leading the pack was Jerry Falwell who now described Bakker as ‘a liar, embezzler, sexual deviant…the greatest scab and cancer on the face of Christianity in 2000 years of Church history.’




Falwell subsequently took over the ‘PTL Network’ and ‘Heritage USA.’ He promptly sacked all Bakker’s existing staff. With his Utopian dream-world falling apart (Tammy-Faye was in the ‘Betty Ford Clinic’), Bakker faced more, traumatic public revelations. He had been sexually-abused from the age of 11 by a male adherent of his parents’ church. When Jerry Falwell failed to have the ‘PTL’ Empire placed in voluntary receivership, he passed confidential, internal documents to federal agents proving there had been serious financial irregularities during Bakker’s rule. A series of investigations led to ‘Heritage USA’ being compulsorily placed in receivership and its tax-free status was revoked. All assets were sold-off at a fraction of their cost. Pastors Bakker and Dortch faced federal indictment for fraud, tax-evasion and racketeering.





In 1989, Bakker was convicted of fraud and conspiracy to commit fraud. He was fined $500 000 and sentenced to 45 years federal prison. In effect, Judge Robert Potter ruled that, although Bakker and Dortch had been fêted as philanthropic millionaires and exemplary Christian conservatives by an alarming number of unthinking observers in the US media, and the political and religious establishment, the pair had unlawfully obtained at least $158 millions by peddling‘future accommodation’ in largely non-existent hotel rooms. In his defence, it was claimed that Bakker had reinvested most of these vast ill-gotten gains in ‘Heritage USA,’ and that he’d only received a $200 000 'salary' and kept $3.7 millions ‘bonus’ for himself. However, Bakker’s lawyer accepted that his client had deliberately attempted to conceal his illegal activities by maintaining two sets of accounts.





Before he was led (in chains between two US Marshals) to a waiting car, Bakker was found crying and whimpering on the floor in the foetal position. He later claimed to have been experiencing hallucinations in which the crowds outside the Charlotte Courthouse had ‘transformed into demons and wild beasts.’ As Bakker tried to hide from reality on the back seat of the Marshal’s car, a small group of his most-bedazzled followers tried to throw themselves in its path. For a while, it was feared that there might be a collective suicide. In 1991, Bakker’s appeal against conviction for fraud and conspiracy was denied by another federal court, but his original sentence and fine were deemed too severe, and waved. At a later hearing, he was re-sentenced to 18 years federal prison.


David Brear (copyright 2014)

Indian Enforcement Directorate set to reclaim 80 billions Rupees from 'Amway' racketeers.

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  • The CEO of 'Amway India Enterprises,' William Pinckney, remains in prison in India after being arrested (and having his Australian passport seized) for fraud and money laundering.
  • The American, billionaire bosses of the'Amway'cultic racket, Doug DeVos and Steve Van Andel, have personally intervened in a clear attempt to obstruct justice in India.
  • This intervention forms part of an overall pattern of ongoing major racketeering activity (as defined by the US federal Racketeer Influenced and Corrupt Organizations Act 1970) which stretches back more than half a century.
  • The Indan tax authorities calculate that (to date) the'Amway' racketeers have syphoned approximately 80 billions Rupees (US$1.3 billion) out of India. 
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https://www.youtube.com/watch?v=1-qLdQzU2Xw

The following propaganda (published in the Economic times of India, June 20th 2014) was somewhat foolishly signed by Doug DeVos and Steve Van Andel.

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'Amway India's CEO Bill Pinckney was arrested on May 26 at Amway's headquarters in Gurgaon. At the time of this writing, he remains in police custody. This continued detention and harassment must end. Amway is a reputable company with 55 years of operating legally and ethically in more than 100 countries and territories worldwide.And while the newly elected Union government in New Delhi played no role in this police action, we ask their help with the immediate release of Bill so he can be quickly and safely return to his family. To continue with this investigative retention when we have fully cooperated with all investigations and requests from authorities in India - including Andhra Pradesh - is unnecessary and unreasonable.


Whenever our business model has been questioned, we have shown up to provide answers. We have made every effort to be entirely transparent and forthcoming with authorities. If there is a problem, we want to fix it so we can continue to do business in India.
The underlying issue at hand is the lack of clear direct selling regulations that distinguish legitimate businesses like Amway from dishonest ones.
Additionally, provisions of the Prize Chits and Money Circulation Schemes (Banning) Act seem to be misapplied against Amway. An amendment to this Act - or even new legislation - is something we have been working toward for some time.
Hopefully, these recent events call greater attention to the immediate need for fair and balanced direct selling legislative guidelines. Fortunately, the newly sworn in Modi government's probusiness agenda is actively working to create an environment that will welcome foreign direct investment. This makes us hopeful we will be able to collaborate with them to find solutions that work for everyone.
With similar situations in other markets in the past, we have successfully worked alongside government officials to resolve issues and we feel confident we can do the same here.
Since opening in 1998, we have seen firsthand the potential this market holds. Amway India has grown into one of the top 10 global markets for the company, selling more than 140 high quality products - most of which are manufactured in India. We employ close to 500 people and have more than 550,000 distributors across the country. Our philanthropic efforts in India have helped nearly 100,000 children including visually challenged students in need of educational and vocational tools.  
Amway is not alone in seeing the opportunity in India. The World Federation of Direct Selling Associations brought industry CEOs to India earlier this year to learn about doing business here. They too saw this potential firsthand and left feeling excited about their prospects for the future. Events like this however, may cause them to rethink investing in the Indian market.
Despite the challenges we currently face, we remain firmly committed to doing business in India. We will not abandon the hundreds of employees and hundreds of thousands of distributors who are working to build businesses for themselves and their families. In fact, we will continue to expand our investment in India in many ways. This includes a new USD $100 million state-of-the-art manufacturing facility in Tamil Nadu. Our goal is to help Indian citizens reach their potential through a business of their own. When we say we're committed to their success, we mean it.
To be clear, our top priority is the immediate release of Bill. We will continue to answer any questions any person may have about our business. And we stand ready to work with India's new Union government to develop clearer direct selling legislative guidelines to ensure events like this never happen again.'

http://articles.economictimes.indiatimes.com/2014-06-20/news/50739314_1_amway-india-prize-chits-money-circulation-schemes
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These reality-inverting statements are a clear attempt by American citizens to obstruct justice in order that they can continue to commit fraud on a grandiose scale in the Republic of India (the world's largest democracy). As such, DeVos and Van Andel's words form part of an overall pattern of ongoing major racketeering activity (as defined by the US federal Racketeer Influenced and Corrupt Organizations Act 1970) which stretches back to 1959.
Far from being philanthropists wanting to help Indian citizens, Messrs. DeVos and Van Andel are two of numerous 'MLM income opportunity' racketeers who want to enslave, rob and blame millions of Indian citizens for generations to come, and this should be clearly explained to whoever is judging William Pinckney.

The'Amway' racketeers and their copy-cats, pose a genuine threat to the security of the Indian Republic.

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Meanwhile back in the adult world of quantifiable reality, the Indian Directorate General of Economic Enforcement, estimates that (to date), behind the corporate front of 'Amway India Enterprises,' more than 80 billions Rupees ( approximately US$1.3 billion) has been unlawfully removed from India by means of a closed-market swindle or pyramid scheme dissimulated as a 'entirely legal direct selling scheme'.

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The Directorate General of Economic Enforcement is a law enforcement agency and economic intelligence agency responsible for enforcing economic laws and fighting economic crime in India. It is part of the Department of Revenue, Ministry of Finance. It comprises officers of the Indian Revenue Service. It was established on the 1st day of June, 2000 by the Central Government of India. to investigate provisions of the Foreign Exchange Management Act, 1999 (FEMA) and the Prevention of Money laundering Act, 2002 (PMLA).


David Brear (copyright 2014)

'USANA' / 'Ariix' - yet another 'Amway' copy-cat 'MLM Income Opportunity' racket.

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In 1945, whilst most, contemporary mainstream commentators were unable to look beyond the ends of their noses, with a perfect sense of irony, Eric Arthur Blair a.k.a. George Orwell (1903-1950) presented fact as fiction in an insightful 'fairy story' entitled, 'Animal Farm.' He revealed that totalitarianism is merely the oppressors' fiction mistaken for fact by the oppressed.




In the same universal allegory, Orwell described how, at a time of vulnerability, almost any people's dream of a future, secure, Utopian existence can be hung over the entrance to a totalitarian deception. Indeed, the words that are always banished by totalitarian deceivers are, 'totalitarian' and 'deception.'


Sadly, when it comes to examining the same enduring phenomenon, albeit with an ephemeral 'Capitalist' label, most contemporary, mainstream commentators have again been unable to look further than the ends of their noses. However, if they followed Orwell's example, and did some serious thinking, this is the reality-inverting nightmare they would find.




More than half a century of quantifiable evidence, proves beyond all reasonable doubt that what has become popularly known as 'Multi-Level Marketing' is nothing more than an absurd, cultic, economic pseudo-science, and that the impressive-sounding made-up term 'MLM,' is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organized crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim closed-market swindles or pyramid scams (dressed up as 'legitimate direct selling income opportunites'), and related advance-fee frauds (dressed up as 'legitimate training and motivation, self-betterment, programs,' etc.).

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Earlier this year, I was contacted by a European financial journalist wanting detailed information about, and analysis of, 'USANA.'Essentially, he wanted to know if'USANA' is a pyramid scheme and whether shares in'USANA'have any value.






The same journalist also wanted to know if'Ariix'is part of'USANA.'




Recently, I was contacted by a concerned man from the USA. He had read my article on 'Herbalife' and Tim Sales,  and he asked for my opinion of'Ariix.' He subsequently explained, that his father has been an adherent of several so-called 'MLM income opportunities,'(including  'USANA'and of 'Ariix') and that his father had lately been acting under the influence of two 'Ariix'shills, Tim Sales and Lynn Allen-Johnson.



'USANA' instigators, Myron W. Wentz and Jeff Yates, posing as a historically-important, visionary-scientists, autodidactic scholars and multi-millionaire, philanthropic businessmen who has helped millions of people around the world to start their own business.





According to the frighteningly familiar fairy story:

'USANA Health Sciences, Inc., a Utah corporation, was founded in 1992 by Myron W. Wentz, Ph.D. We develop and manufacture high-quality, science-based nutritional and personal care products with a primary focus on promoting long-term health and reducing the risk of chronic degenerative disease. In so doing, we are committed to continuous product innovation and sound scientific research. We have operations in 19 markets worldwide, where we distribute and sell our products by way of direct selling. Our net sales in fiscal year 2013 were $718.2 million, of which 78.1% were in markets outside of the United States. As a U.S.-based multi-national company with an expanding international presence, our operating results are becoming more sensitive to currency fluctuations, as well as economic and political conditions in markets throughout the world.'









The blame the victim 'MLM income opportunity'racket known as 'Ariix,' is a spin- off of the blame the victim'MLM income opportunity' racket known as 'USANA.'

Various'USANA'shills have transferred their allegiance (and networks of temporary recruits) to'Ariix.'


The 'USANA' and'Ariix' rackets have had extensive connections with the 'Mormon Church.'


Blame the victim 'MLM income opportunity' rackets are neither original nor unique; consequently, they cannot be fully-understood in isolation.

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According to the frighteningly familiar fairy story:

'ARIIX was born from the vision of six leading minds in business and nutritional science who wanted to create a unique company based on the "golden rule" of helping others as they help you.


Our name, ARIIX, comes from combining the Latin word Aurum, meaning gold, with "IIX," similar to the roman numeral 8. Rotating the 8 gives you the infinity symbol, which you can see reflected in our logo. So the name altogether means eternal wealth, and also symbolizes our effort to set the "gold standard" for excellence in our products and our company as a whole.



ARIIX is set apart by our passion for helping individuals unleash their potential for success, as well as by our unparalleled product line. We are proud to offer the highest quality nutritional supplements available.'





'MLM Income Opportunity'shills, Tim and Laura Sales (left) posing as ordinary humans: turned multi-millionaire superhumans, with an instigator of the'Ariix' racket, Fred W. Cooper.  


'Ariix  MLM income opportunity' racketeers (Mark Wilson, Deanna Latson, Fred W. Cooper, Riley Timmer and Jeff Yates) posing as visionary, philanthropic, multi-millionaire businessmen and women who have helped countless people around the world to start their own business.


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Second generation 'Domionist MLM income opportunity' racketeers, Dick De Vos and Steve Van Andel, posing as a pair of visionary, philanthropic, Christian billionaire businessmen who have helped more than 3 millions people around the world to start their own business. 




The original 'MLM income opportunity racketeer,' Carl F. Rehnborg (1887-1973), posing as a historically-important, visionary-scientist, autodidactic scholar and multi-millionaire, philanthropic businessman who helped thousands of people to start their own business.


The parallels between the 'Ariix' fairy story, peddled as reality by shills like Tim and Laura Sales, and the 'Nutrilite' fairy story, originally peddled as reality by Carl F. Rehnborg (and more recently by the De Vos and Van Andel clans), are quite remarkable. In brief, all these crooks have played the unoriginal role of ordinary humans, turned superhumans - prepared to share their secret of unlimited health, wealth, happiness and freedom with anyone (for a price). However, this again is hardly surprising, because ‘Nutrilite Products Company Inc.’ was, after all, the prototype corporate-front for all subsequent 'Multi-Level Marketing Income Opportunity' rackets.


In the 1950s, 'Nutrilite' was a highly-controversial trademark owned by Carl F. Rehnborg a.k.a.'Dr.' Rehnborg, a previously-penniless, American toothpaste-salesman (of German origin) who'd acquired a considerable fortune by reinventing himself as a historically-important, visionary-scientist, autodidactic scholar and philanthropic businessman. Lawyers from the US Food and Drug Administration Bureau of Enforcement, who successfully-challenged the authenticity of some of Rehnborg's many, absurd lies in the federal courts during two decades, privately knew him to be nothing more than one of a trio of sinister quacks protected by an echelon of shyster attorneys, who’d combined, and updated, the medicine show and Ponzi-scheme to reflect the spirit of the age. However, Rehnborg was no ordinary charlatan. He almost certainly suffered from severe and inflexible Narcissistic Personality Disorder. 

Former penniless science-fiction author, turned multi-millionaire, cultic racketeer, L. Ron Hubbard,posing as a historically-important,visionary scientist and philanthropist who had discovered the secret of how ordinary humans can become healthy, wealthy happy and free super humans. Hubbard was also prepared to share this secret with anyone (for a price).
The Nutrilite Story


Tellingly, Rehnborg's own comic-book version of his life and achievements (set-down in various published documents, including a book signed by his son and heir, Sam Rehnborg), reads uncannily like the autobiography dreamt-up by 'Scientology' instigator, L. Ron Hubbard - a man who was once famously described as 'a combination of  Baron Münchausen and Adolf Hitler.'



Unfortunately, just as with the followers and casual observers of Hubbard, the only information made available to the followers and casual observers of Rehnborg has been carefully controlled.


Carl F. Rehnborg circa 1915

Thus, to date, the world has been led to believe that Rehnborg (who was born in 1887 in St. Pitersberge, Florida) :- 

- was a noted-child-prodigy who read voraciously and who amazed his teachers with his detailed knowledge of: philosophy, religion, history, politics, astronomy, mathematics, aerodynamics, chemistry and human rights. 

- was  fluent in many languages, including Chinese. 

- was not a believer, but he studied Christianity, making a boyhood pilgrimage to Palestine and Egypt.

- had a great passion in his teen-age years - the study of planet Earth, its population, its food reserves, and the 'technology of conservation of natural products, but his first love was always the science of nutrition. 

 - was, by the tender age of 27, already a 'doctor of chemistry' who had moved to Tianjin in China to work as an accountant for an American Oil company.

- ran a shipbuilding company, before becoming the representative of the 'American Dairy Company' and, eventually, the representative of 'Colgate Products Company' in Shanghai.

 - witnessed ‘mass-starvation’ in China, before surviving a ‘siege of Shanghai’ by supplementing his diet (and that of his starving friends) with an improvised, vitamin and mineral-enriched broth made from grasses, vegetables, powdered limestone, ground-up bones and rusty nails, etc.

- sailed across the Pacific (studying its many island-cultures on the way) and landed on the West Coast of the USA, where, despite having no money, he managed to establish a 'research laboratory’ in his modest loft-apartment on California’s Balboa Island.


- selflessly dedicated 6 years of his life (1927-1934) to develop a ‘Revolutionary New Food Supplement’ to save mankind from starvation, assisted only by his dutiful young wife, Edith.

- first naively tried to give his wonderful new formula away, but the cynical world wasn’t interested, so, in 1934, he reluctantly decided to create ‘California Vitamins Inc.’ 

- moved his flourishing  ‘Business’ to a ‘Manufacturing and Processing Facility’ in Buena Park, California, and created the ‘Nutrilite Products Company Inc.’ in 1939. 

- acting in association with a ‘Network Sponsoring Company’, ‘Mytinger and Casselberry Inc.’ (to whom he’d sold ‘Exclusive Nutrilite Distribution Rights’) created the ‘World’s First Multi-Level Marketing Scheme’

- had lived the American dream, starting from nothing to become an admired and respected millionaire through ‘Helping 15 thousands fellow Americans to build their own MLM Businesses.’ 


Carl F. Rehnborg  circa 1936


  

Exactly like L.Ron Hubbard, scant quantifiable evidence has been produced to prove that Rehnborg was qualified (let alone expert) in anything, other than lying to people to get their money. There is even reason to doubt that Rehnborg (who apparently did once work for 'Colgate & Co') was in China in the exact period he claimed during, and after, WW I; whilst all the other exciting episodes in his various occidental and oriental odysseys are largely anecdotal. However, the truth about Rehnborg’s convoluted Rags to Riches’ American fairytale is an entirely different matterIn 1934, Rehnborg (aged 48) created ‘California Vitamins Inc.’, allegedly to manufacture and distribute what he arbitrarily defined as 'the World’s First Multi-Mineral/Multivitamin Plant-Based Food Supplement - a Unique Combination of Vitamins and Minerals in a Special Base.’ At first, this so-called ‘Health Tonic’ was brewed up, and peddled as 'Vita-6' a.k.a. 'Vitasol,' in insignificant quantities. Consequently, it was of no particular interest to regulators. However, anyone with an ounce of common sense could immediately tell that Rehnborg’s ‘invention’ was just another essentially-inert potion (in the absurd tradition of the medicine show); a random mixture of cheaply-procured common substances with an expensive price tag. It had probably taken Rehnborg 6 hours to concoct, not 6 years.

Aerial View of Nutrilite Products Inc. Plant




By 1939, Rehnborg had spotted the existing term, 'Nutrilites' (probably in an old scientific magazine). So he legally-changed the name of his pay-to-play game of make-believe to the technical-sounding ‘Nutrilite Products Company Inc.’ and moved his quackery onto an almost unprecedented scale. Soon, Rehnborg was legally employing dozens of white-coated workers in purpose-built industrial buildings in Buena ParkCalifornia. He also acquired an alfalfa farm near to the city of Hemet in California's San Jacinto valley, but it is unclear exactly where he suddenly found all the necessary capital to pay for these impressive sites and their modern equipment. To his followers and casual observers, Rehnborg’s activity looked like any other lawful enterprise. His staff were ordinary honest folk, to whom the truth was also unthinkable. At this time, Rehnborg rechristened his potion ‘Nutrilite Double X (‘XX’) Supplement.’ He now proposed to offer it as two ‘complimentary products’ in one pack -  comprising little green bottles of bright red ‘Multivitamin Capsules’ and boxes of pale-coloured ‘Multi-Mineral Pills.’ The product was deliberately designed to look modern and scientific (like a proprietary medicine), but, tellingly, the price was fixed at just less than $20 a box (the equivalent of several hundred dollars today). Rehnborg claimed that the ‘XX’ brand-name was derived from the Roman numeral representing twenty. It should have been read as ‘double cross;’ for when the former toothpaste salesman’s pricey wampum was routinely analysed by independent chemists working for the FDA, it was discovered that (although it contained essentially what it said on the labels and was quite harmless) ‘XX Supplement’ really did mostly comprise a random mixture of cheaply-procured, common substances (dried vegetable extracts: alfalfa; parsley; watercress; yeast; etc.). FDA experts later estimated that XX Supplement’  cost no more than a few cents a pack to produce. Thus, FDA lawyers must have known that Rehnborg was, in fact, using authentic pharmaceutical equipment to mass-produce a precisely-measured, harmless placebo, but labelled as a ‘Health Tonic’ (a meaningless term), and peddling it at an exorbitant mark-up (certainly, more than 1000%). This crack-pot pseudo-scientific swindle, which was tantamount to a self-styled 'alchemist' stamping a valueless amalgam of base-metals, 'Pure Gold,' and selling it for the price of pure gold, could have been quickly nipped in the bud, simply by charging Rehnborg with criminal fraud. Apparently, prosecutors never considered the possibility that they might be dealing with someone with severe psychological problems whose own inflexible delusions were contagious. Instead, at first, FDA lawyers felt obliged to take no action; reasoning that, by truthfully listing the banal ingredients, but avoiding making any specific therapeutic claims, on his packaging, Rehnborg had found a loophole in federal laws concerning criminal misbranding of medicines. As result, an up-dated version of an age-old fiction was permitted to be mass-marketed as fact to an unsuspecting public. Unfortunately, the lack of any rigorous, official challenge only brought its author more credibility. Not surprisingly, a host of copy-cat 'Unique Vitamin and Mineral Health-Tonic’ scams quickly sprang up.





As WWII drew to its close, ‘Nutrilite’ had lost its novelty, so Rehnborg (who was approaching 60) had teamed-up with two respectable-looking associates, Lee S. Mytinger and William S. Casselberry (later described by FDA officials as a ‘cemetery-plot salesman’ and a ‘psychologist’). The result was ‘Mytinger and Casselberry Inc.,’ a second corporate structure peddling ‘Exclusive Commission-Agency Rights’ to ‘Distribute XX Supplement’ using (what was first defined by the company’s owners as) a ‘New Business Model.’ In theory you could try to sell ‘XX  Supplement’ to your social contacts for a small profit, but, if you wanted to make big money, you didn’t need to sell anything… you could buy a monthly quota of ‘XX Supplement’ yourself and sign-up your social contacts to do the same… your ‘Sponsored Recruits’ would then ‘Sponsor’ their own social contacts, etc., ‘compensation’ would automatically multiply in an infinitely-expanding geometric progression

‘Mytinger and Casselberry Inc.’ offered a mind-numbing contract’ in which the ‘company’ undertook to pay its ‘Independent Distributors’ an escalating ‘monthly commission’ on the totality of their escalating ‘Business Volume’ [i.e.their own regular monthly purchases (falsely defined as ‘sales’), added to the regular monthly purchases (falsely defined as ‘sales’), of their ‘Sponsored Recruits’, and those of the recruits of their recruits, etc. etcad infinitum].






In reality, the new set-up was merely the original lie with a second chapter added, but to casual observers ‘Nutrilite Products Company Inc.’ appeared to be exclusively manufacturing for, and wholesaling ‘XX Supplement’ to, ‘Mytinger and Casselberry Inc.,’ whose commission agents, in turn, appeared to be retailing it to the public for a profit. Although ‘XX Supplement’ was presented as ‘Unique,’ it mostly comprised substances which could easily be bought at a fraction of their exorbitant, assembled fixed-price, in traditional retail outlets. The product was effectively-impossible to sell to the public for a profit on the open market. Therefore, the overwhelming majority of its final customers were merely the non-salaried agents of the second corporate structure, which itself was the sole agent of the first corporate structure. In order for them to maintain the false hope that if they signed-up further contributing participants they would automatically become rich, the participants in this dissimulated money game were obliged by its rules to keep handing-over a monthly payment toMytinger and Casselberry, to be shared with Rehnborg. From all points of view (medical, economic, legal, etc.), ‘XX Supplement’ might have well not existed. It was just a convenient means of laundering illegal payments in a closed-market swindle based on the crack-pot theory of endless-chain recruitment. New victims were supplied with a $49.50 ‘Business Kit’ (i.e. a large cardboard box stuffed with a month’s supply of ‘XX Supplement’ and a fat folder containing page after page of mystifying pseudo-economic/medical presentations and diagrams, and instructions in how to go about remembering, contacting and recruiting everyone they’d ever known during their lives). These presentations contained the concrete evidence which FDA lawyers could use to prosecute Rehnborg,Mytinger and Casselberry. Contributing participants were being instructed to smile, project excitement and enthusiasm, and to recite a precisely-worded script which proclaimed ‘Nutrilite XX Supplement’ to be ‘good value,’ because it could ‘cure or prevent,’ virtually any known human illness.



William W. Goodrich
William H. Goodrich


Interview with William W. Goodrich, Office of General Counsel, 1939 - 1971
Even though it wasn’t his area of responsibility, FDA Legal Counsel (1939-1971), William H. Goodrich, was probably the first senior US law enforcement agent to deduce that the innocent baby that Rehnborg, Mytinger and Casselberry had baptised a ‘New Business Model’ (later to become known as: ‘Multilevel Marketing’) was actually the same old delinquent previously known a 'pyramid scam.’ Again, anyone with an ounce of common sense could work out immediately that, since Rehnborg had been peddling medical alchemy, the strong likelihood was that Mytinger and Casselberry were peddling economic alchemy. The sinister trio of quacks were obviously acting in association, but agents of the Food and Drug Administration and those of the Federal Trade Commission acted independently. At this time, anti-racketeering legislation did not yet exist in the USA. However, in the late 1940s, the rapidly-expanding ‘XX Supplement’ dossier was already in the hands of FTC lawyers. Apparently, prosecutors still never considered the possibility that they might be dealing with persons suffering from severe psychological problems and whose own inflexible delusions were contagious. Instead, they still felt obliged to take no action; this time reasoning that Mytinger and Casselberry appeared to have found a loophole in federal law prohibiting fraud. For even today, the fundamental identifying characteristic of all pyramid scams and Ponzi schemes, has not yet been accurately defined by legislators. As a result, another updated version of an age-old fiction was permitted to be mass-marketed as fact to an unsuspecting publicYet again, the lack of any rigorous official challenge only brought its authors more credibility. Not surprisingly, a host of copy-cat 'income opportunity' swindles (camouflaged by banal, but pricey, wampum) quickly sprang up.



By 1947, Rehnborg, Mytinger and Casselberry were steadfastly pretending  ‘15 000 Successful Distributorships in the USA,’ with ‘sales’ totalling ‘$500 000 dollars per month.’ They had also organised the production of a ‘Free’ booklet‘How to Get Well and Stay Well’, in which they further pretended that ‘Nutrilite Double X Supplement’ had ‘cured or greatly helped such common ailments’ as : ‘Low blood pressure, Ulcers, Mental depression, Pyorrhoea, Muscular twitching, rickets, Worry over small things, Tonsillitis, Hay Fever, Sensitivity to noise, Underweight, Easily tired, Gas in stomach, Cuts heal slowly, Faulty vision, Headache, Constipation, Anaemia Boils, Flabby tissues, Hysterical tendency, Eczema, Overweight, Faulty memory, Lack of ambition, Certain Bone conditions, Nervousness, Nosebleed, Insomnia, Allergies, Asthma, Restlessness, Bad skin colour, Poor appetite, Biliousness, Neuritis, Night blindness, Migraine, High blood pressure, Sinus trouble, Lack of concentration, Dental caries, Irregular heartbeat, Colitis, Craving for sour foods, Arthritis, Rheumatism, Neuralgia, Deafness, Subject to colds.’



Carl.F. Rehnborg circa 1950

Rhenborg now cast himself in the role of ‘Scientific Adviser’ to ‘Mytinger and Casselberry Inc.’ He toured the USA preaching the gospel to wide-eyed ‘Distributors’ - ‘for less than $20 a month’‘Nutrilite Double X Supplement’ was the ‘Answer to Man’s Search for Health.’ After both companies’ owners were approached by FDA officials and warned that they could face criminal prosecution for misbranding, the booklet was ‘revised.’ Specific therapeutic claims were supposed to be eliminated‘All illnesses’ suddenly became a ‘state of nonhealth’ produced by ‘chemical imbalance’.… ‘Nutrilite XX Supplement’ cured nothing, it merely ‘enabled people to Get Well and stay Well’ by themselves. However, pages 41-52 of the booklet still recounted alleged case-histories explaining that ‘Nutrilite brought relief from such ailments as diabetes, feeble mindedness, stomach pains, sneezing and weeping.’ Not surprisingly, the FDA officials were not impressed, so they finally launched a number of raids, and seizures of ‘Nutrilite XX Supplement’ and associated publications.




In 1951, after a series of lawsuits, appeals and counter suits (in which Mytinger and Casselberry hired top lawyers who portrayed their clients as American capitalist heroes being crushed by Soviet-style bureaucracy), the FDA obtained (on behalf of the people) a permanent Supreme Court injunction against ‘Mytinger and Casselberry Inc.’ preventing ‘Distributors’ from referring to 50 publications making false claims about ‘Health Tonics and Food Supplements’ (including various ‘Revised Editions’ of ‘How to Get Well and Stay Well’). FDA agents soon found that the injunction was being flouted. As a result of mounting complaints, they infiltrated the organization (as potential recruits) and recorded deluded proselytisers chanting the same cure-all mantra abou‘XX Supplement.’ Faced with more litigation and fearing that their monopoly of information might be lost, in 1954, Rehnborg, Mytinger and Casselberry hired a leading advertising agency which handled the clean-cut Hollywood star, Alan Ladd. Along with his wife and children, Alan Ladd then briefly-featured in a kitsch 'Nutrilite' advertising campaign - published in various mainstream magazines right up until 1959.  






 

The charlatan-trio, 'Mytinger, Casselberry and Rhenborg,' also paid a team of Hollywood professionals to produce a 20 minute colour propaganda film, From the Ground up’ (featuring themselves as three nice ordinary American guys turned philanthropic scientists and industrialists), and they began to publish their own propaganda magazine, ‘Nutrilite News’ (stuffed with colour photos of happy, healthy and wealthy ‘Distributors). Soon, they were organizing ‘Rallies and Seminars’ (addressed by ‘Successful Christian Distributors’ like Rich De Vos and Jay Van Andel). No quantifiable evidence (in the form of audited accounts) was ever produced to prove what percentage of claimed ‘sales' were authentic retail transactions to the public for a profit, or how many people who’d signed a ‘contract’ with Mytinger and Casselberry Inc.’' had actually received an overall net-profit from the operation of what its instigators arbitrarily defined as an MLM income opportunity’. Excluding the tiny percentage of grinning schills at the top of the pyramid, the hidden, rolling insolvency/churn-rate was 100%. Since there was no significant or sustainable external revenue, participants were actually buying infinite shares in their own finite money. 




          Jay VanAndel                                                             Richard DeVos

circa 1960


In reality, in 1959, when it seemed that ‘Mytinger and Casselberry/Nutrilite Products Inc.’ might finally be shut down (under the ‘Federal Food, Drug and Cosmetic Act 3381-3383’, rather than anti-fraud legislation) De Vos and Van Andel hid behind familiar, patriotic words and images stolen from contemporary popular culture. They created the ‘American Way Association’ - the first of what was to become a shoal of red, white and blue herrings.

The classic movie, 'Elmer Gantry' (released in 1960), was written and directed by Richard Brooks and is loosely-based on a novel of 1927 by the Nobel prize-winning author, Sinclair LewisIn the Movie, 'Gantry' (played by Burt Lancaster) is a grinning charlatan in a loud suit - a hard-drinking whore-chasing travelling-salesman, who, for sexual and financial motives, attaches himself to the beautiful 'Sister Sharon' (played by Jean Simmons), the focus of a profitable 'Tent Revivalist' group working the Bible-Belt during Prohibition (1920-1933). 'Elmer Gantry'keeps his grin, but he dons a sombre suit and black hat, and is reborn as 'Brother Gantry' 'Charismatic Preacher' and 'Moral Crusader'. He soon discovers that he has the power to create mass-hysteria, and reap tens of thousands of dollars, by manipulating individuals' existing beliefs and instinctual desires. At a key-moment in the movie, a Protestant Minister (bedazzled by 'Brother Gantry's' offer to fill his church coffers) abandons the traditional Christian message and proclaims: 'Business is business, that's the American Way'.

Perhaps it's just a coincidence, but at almost exactly the time that the American Way Association’ first appeared, ‘Elmer Gantry' was playing to packed movie-theatres all over America.




Initially (and with an irony that is close to exquisite), in order to dodge being drawn into the ongoing FDA investigation of 'Nutrilite,' De Vos and Van Andel now laundered all the unlawful investment payments into their copy-cat, dissimulated, closed-market swindle, behind the claim that they were selling detergents  (i.e. banal, but effectively-unsaleable, non-'medicinal' pseudo-scientific wampum of their own fabrication) and not pills and potions. Again, the updated snake oil stain remover was deliberately designed to look modern and scientific, whilst De Vos and Van Andel grinned from ear as they too steadfastly pretended that these strangely-familiar, cheaply-procured mixtures of common substances, were all-American, exclusive, good-value and unique.





The original 'Nutrilite' lie was progressively-absorbed back into the spin-off 'Amway' lie, 1972-1994, where it still is peddled as the truth.

Only after the 'MLM' 

virus had spread to almost every State of the Union, did the US Federal Trade Commission finally make a half-hearted attempt to close-down 'Amway.' After  receiving a significant number of complaints,  FTC prosecutors, advised by specialist economists, recognised that what they were faced with, was not a direct selling scheme, but as a classic pyramid scam, without a significant or sustainable source of revenue other than its own victims, but hidden behind a smokescreen of effectively-unsaleable products . However, after years of investigations and hearings, in 1979, a naive, and/or corrupt, federal judge ruled that although 'Amway' had previously been massively in breach of the law and would have to pay fines, the company would be allowed to continue to trade. This was because the judge accepted the latest unbelievable chapter of the 'MLM' fairy story. i.e. That 'Amway' s owners were repectable Christian businessmen who were vehemently opposed to  pyramid schemes and that, consequently, they had stopped fixing prices and introduced their own rule which would, henceforth, oblige the members of 'Amway's' sales force to retail at leat 70% of the products which they had bought wholesale from the company, to at least 10 external customers, before they could receive commission payments. Amazingly, no independent, common-sense mechanism was created to ensure that this latest twist in the fairy story was true, and that 'Amway' would now be in compliance with the law.

Not surprisingly, this absurd and dangerous judgement was seen as an open-invitation to thieve, and, consequently, a whole host of 'Amway' copy-cat 'MLM' rackets soon began appear.   

More than 30 years later, the so-called 'Direct Selling Association,' is a demonstrable lie financed and controlled by the bosses of a classic, organized crime syndicate.


David Brear (copyright 2014)



Shackled to a financially-suicidal Ambot.

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In 1945, whilst most, contemporary mainstream commentators were unable to look beyond the ends of their noses, with a perfect sense of irony, Eric Arthur Blair a.k.a. George Orwell (1903-1950) presented fact as fiction in an insightful 'fairy story' entitled, 'Animal Farm.' He revealed that totalitarianism is merely the oppressors' fiction mistaken for fact by the oppressed.


In the same universal allegory, Orwell described how, at a time of vulnerability, almost any people's dream of a future, secure, Utopian existence can be hung over the entrance to a totalitarian deception. Indeed, the words that are always banished by totalitarian deceivers are, 'totalitarian' and 'deception.'

Sadly, when it comes to examining the same enduring phenomenon, albeit with an ephemeral 'Capitalist' label, most contemporary, mainstream commentators have again been unable to look further than the ends of their noses. However, if they followed Orwell's example, and did some serious thinking, this is the reality-inverting nightmare they would find.




More than half a century of quantifiable evidence, proves beyond all reasonable doubt that what has become popularly known as 'Multi-Level Marketing' is nothing more than an absurd, cultic, economic pseudo-science, and that the impressive-sounding made-up term 'MLM,' is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organized crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim closed-market swindles or pyramid scams (dressed up as 'legitimate direct selling income opportunites'), and related advance-fee frauds (dressed up as 'legitimate training and motivation, self-betterment, programs,' etc.).

____________________________________________________________________________________________

  • A number of correspondents have recently asked me: Were you an 'MLM Distributor?'

  • The answer to the above frequently-asked question is 'no,' but this article explains why I began to research, and to write about, cultism in general, and so-called 'Multi-Level Marketing,' in particular.



___________________________________________________________




About 10 years ago (by chance), I ran into the Mayor of Beaumont Le Roger (the fashionable Normandy village where I used to live). The Mayor (who was also a local business owner and elected member of a regional council) informed me that my former home had just been sold for around Euros 650 thousands (US$ 800 thousands). He asked me why I'd previously abandoned the restoration of this historic property, and then sold it (at just the wrong moment) for less than Euros 150 thousands? I replied that, although (on paper) I had temporarily appeared to be the owner, in reality, the transaction had been handled by my brother - a deluded cult adherent. However, as soon as the word, 'cult,' was mentioned, the Mayor looked at me blankly and had another pressing engagement to attend. 

For those who are interested, the following is a contemporary account of what actually happened to me as a result of members of my family falling for the version of the blame-the- victim cultic racket entitled'MLM income opportunity.' 



One spring evening in the early 1990s, I was relaxing in the garden of my home in Normandy after returning from a trip to England. I was having a chat with two visiting friends. I began to tell them about the sudden, nightmare personality-transformation of my only brother (who is 15 months older than me) and of the uncanny influence he, and his ‘new business associates,’ now seemed to hold over my widowed mother.






For a long while, my brother had not been at ease with himself. After graduating from university (as a Bachelor of Arts) in 1978, he had failed to find his vocation in life. At that time, he was one of a typical bunch of students who’d all roomed together. Before going their separate ways, they’d taken a summer trip to the USA and driven a Chevrolet Camaro from the East coast to San Francisco.



My brother had then returned home to the North of England, where, reluctantly, he attended teacher training college. His Californiasuntan soon faded along with his taste of freedom. For the next ten years, he lived, and worked (teaching English), within a few miles of the same industrial town where he had been born and where he had gone to school himself. Apart from the occasional short holiday, that was pretty much the limit of his world. My brother expressed many right-wing opinions, but he had no political affiliations. 




In his spare time, my brother improved his backstreet home, waxed his second-hand car, played competitive sports and drank beer. For his level of education, he wasn’t well-paid, but he lived cheaply and saved his salary. However, my brother made no secret of the fact that he loathed his job and despised his senior colleagues. He’d been passed-over for promotion, and almost fired, because of his lack of self-control. Yet, in my brother’s head he couldn’t possibly be at fault… the public education system was ‘run by politically-correct socialist idiots and weaklings.’




Towards the end of this frustrating period, something happened which shook my brother to the core. In 1987, a group of middle-aged men (all stalwarts of my brother’s former rugby club) were killed, or maimed, in an horrific crash involving a truck ploughing into the back of a mini-bus in which they were travelling. He had always lived in denial, but, according to his girlfriend (another reluctant schoolteacher), once he’d past the age of 30, my brother had finally begun to take stock of his life. He realized that he needed to escape before he was too old or he would be condemned to three more, miserable decades in the classroom. The only problem was that, apart from some vague dream that one day he wouldrun a country pub,my brother could see no definite way of replacing his salary cheque. Privately, he was in total despair.



It was one Christmas, when I first noticed that my brother was not the same man. The new version was an unlikely mixture of glad-handing politician, zealous missionary and foot-in-the-door salesman. He grinned artificially, stared deeply into everyone’s eyes and asked: ‘What do you dream of achieving in life?’He then confidently tried to convince anyone who would listen that he was the bearer of good news… he had discovered a sure-fire way to make all your ‘dreams’ come true.


My brother had been to a cosmetic dentist and he had started wearing a suit and tie. His previously-timid girlfriend had transformed as well. They formed a well-rehearsed double-act. Whatever scripted-nonsense my brother spouted, she gazed at him, smiling and nodding on cue. They had become relentlessly-enthusiastic witnesses to the infinite financial, and personal, benefitsof something which they first described as ‘Networking,’ then ‘Multi- Level Marketing.’ They insisted that ‘for less than £100 initial investment,’they had become ‘independent business owners,’ who, by ‘working only 15 hours per week,’ were‘Building a Leg in a rapidly-growing International network of distributorships’their‘network’s training system combined with their sponsor’s business model, compensation plan and high quality, good-value, environmentally-friendly products’wouldguarantee a secure residual income’… ‘MLM could enable anyone to achieve financial freedom in 2-5 years, retire early and have a great new lifestyle.’ 

In plain English, my brother had a bought a commission-agency from a UK-registered company importing soap powder and other, banal household products from a parent corporation the USA.



According to my brother: you could settle for buying products from the company at a ‘wholesale price’ and then ‘retailing’  them to your social contacts at ‘30% profit.’ This ‘short-term strategy’ was fine for some, but, in the end, it was a ‘waste of time.’ If you were really serious about making big money, then there was ‘no need to sell anything.’ You could ‘follow a proven, business-building plan’ and consume a regular quantity of ‘money-saving products’ yourself whilst offering your friends and relations a ‘helping hand’ by bringing them onboard. In turn, your recruits could ‘duplicate exactly the same plan’ and consume a regular quantity of ‘money-saving products’ themselves whilst ‘helping’ their own social contacts to do the same, etc… the company undertook to pay its ‘Distributors’ a escalating percentage commission on the totality of their monthly ‘Business Volume’ and on that of their recruits, and on that of the recruits of their recruits, etc… if the ‘plan’  was ‘duplicated’ correctly, payments automatically multiplied in an infinitely-expanding geometric progression. The more people you ‘helped:’  the more money you earned!





To my complete consternation, my brother made a determined attempt to recruit me. He was so transparent that my immediate reaction was laugh, but that didn’t put him off. So, I told him and his girlfriend (in no uncertain terms) that I wasn’t interested and I would never be interested ! Their phony act was an insult to the intelligence ! In their wildest fantasies, how could they think that I would want to have anything to do with what was obviously a dumb pyramid scam? When they scoffed at this description and persisted with their inflexible, mid-Atlantic jargon, I tried to talk them round by poking fun at the child-like naivety of adults who fell for get-rich-quick schemes. However, my brother was locked into his new way of dealing with reality. He wouldn’t listen to reason, mainly because he couldn’t laugh at himself. Instead, he sneered at me and hid behind a wall of  thought-stopping clichés:

Your a cynic, no statue has ever been built to commemorate a cynic !… Only fools pass judgement on something without looking at it first !… I’ve met  people who have literally made millions by building this business…!  I prefer to listen to winners not losers !… Who are you to belittle some of the world’s most successful businessmen ?… If you’re so clever, why aren’t you rich ?… People like you laughed at the Wright brothers.’ etc.

When it dawned on him that he had no chance of converting me, the authentic version of my brother made a fleeting re-appearance. Familiar signs of anger flashed across his face, but then he looked to his partner for support. The couple now went into another irritating routine. They fixed their happy, smiley  faces and calmly refused to talk about what they were doing as thoughit wasmy loss not their's.For my brother, it was unthinkable that I could have a more-informed opinion than him.

Shortly after this embarrassing encounter, I had gone to live in France. I forgot about it until my recent visit to Englandwhen I discovered that my brother and his girlfriend were planning to move in with my mother. She lived alone in the old family home. As the joint-owner, my mother had acquired this in its entirety after the sudden death of my father (an architect) in 1972 (English law gives no automatic property-rights to children). My mother was always insecure; an only-child who never knew her real father and whose own mother had died young - at 17, she’d been obliged to leave school to support herself. Although my mother was brought up as a ‘Methodist,’ she’d assembled her own belief system. She rejected the vocabulary of ‘God’and ‘heaven and hell.’Instead, she insisted that her life experience had taught her thatthere was ‘a benign, natural order … an invisible force running all our lives… punishing wicked people and rewarding good people, but whilst they were still alive.’ My mother placed herself at the centre of her system. This allowed her to neglect herself. She was registered with a doctor, but she had more faith in a local woman who styled herself as a‘healer.’


Throughout the 1960s (at my father’s instigation), my mother had run a small business in old books, maps, prints and collectors’ items. After my father’s death, she gradually dropped this to care for a succession of ailing, friends and relatives. Inevitably, my mother’s elderly charges began to die off, and each time she inherited more property. She claimed that she didn’t want the responsibility of money,but she kept tight hold of it all the same. To outsiders, my mother seemed to be occupied with her business. In reality, she’d sold some apartments that had come from my father’s family. The resulting capital, coupled with her widow’s pension and the rents from some more, inherited apartments, allowed my mother’s life, and home, to become governed by an overwhelming desire to find parental substitutes.


As she got older herself, my mother withdrew into a parallel world based on her deprived 1930s and 1940s childhood - hard times were round the corner. In this way, she justified another obsession - hoarding things. Even though she lived in quite a large house, it became almost impossible to move about. Virtually the entire building was crammed full of books, furniture, pictures and objects. Cupboards bulged with rotting bags of sugar and rusting cans of food. Although I knew that my mother had some (declared) savings and investments, and that she employed a lawyer and accountant, I was neither told the full extent of what she’d inherited nor allowed the slightest contact with her professional advisers. All documents were kept secret and my mother always talked to me as though she was struggling to make ends meet. At the same time, she was paranoid about burglars and the tax authorities. By 1990, my mother was sitting on all our family’s capital assets and she was in deep denial. Before I moved to France, I lived about 40 miles from my mother and I used to visit her every week, but she never once came to visit me. In fact, for almost 20 years (despite my best efforts), she never went anywhere, and never parted with a penny, unless she believed it to be absolutely necessary.

After the sudden deaths of her ‘healer’ and of her final charge (a childless old man, and former antiques dealer, from whom she copied many of her miserly ways), my mother was confronted by the ‘Ghost of Christmas to Come.’ Exhausted after a heavy fall, she was persuaded to consult a cardiologist. Tests revealed that she needed to have a pacemaker fitted. My mother was only in her late 60s, but, when she was also diagnosed as diabetic, she became convinced that she didn’t have long to live.Consequently, she was elated when her previously-depressed and self-centred, eldest son was suddenly bursting with optimism and offeringto take care of her.For a while, my mother freely-admitted that, in the past, she had got her priorities all wrong. A substantial proportion of her inherited wealth was undeclared, it was stashed away in the form of cash, gold, jewellery, etc. My mother wanted to make amends whilst she still had the chance.She was now obsessed with the idea of transferring ownership of her properties to my brother and myself to avoid inheritance tax. So many of her illusions had been destroyed, and she was so vulnerable, that I considered returning to live in England to be near her. However, during my recent visit we’d had a series of acrimonious conversations in which my mother recited prepared statements containing elements of my brother’s new jargon -Although she was ‘duty-bound’  to divide her properties equally between her two sons, because my brother was ‘following a proven plan for his financial future’ and my finances were ‘in a mess,’ after taking ‘professional advice,’ she had decided to place 50 % of everything she owned in my brother’s name... when I got myself ‘organized with a plan for my future’ then I could be ‘included.’ My motherinsisted that in the past, she’d had tax inspectors at her door looking for me… she’d told them that she’d had no contact with me for many years… they had gone away, but she was terrified they would return… if any property was put in my name, it would taken away…she had also changed her will if she didn’t survive, my brother would ‘appear to inherit everything,’ but she had given him ‘secret instructions to divide everything equally in the future’... nothing would be put in writing, we could ‘trust him to act fairly.’

At first, I laughed and tried to point-out that there was only one member of our family with a secret fortune hidden from the tax-man, and it certainly wasn’t me.… far from being ‘organized,’ it was obvious to anyone that it was my brother, not myself, who was involved in a hare-brained scam… no one in their right mind would want to trust him with money… surely she knew that pyramid scams were the equivalent of flushing cash down the toilet! My mother had shown no sense of humour and I’d begun to lose mine. I told her that, even without my brother’s involvement with a scam, there was no way that I could accept what she’d done… it was crazy. My brother had never voluntarily shared anything with me in his life. My mother had turned away from me - I was making her ill.When I suggested that, if she wouldn’t listen to me we should meet with her accountant and lawyer, she’d refused -I was ‘being ridiculous.’ 


To my amazement, my mother had then retreated further into my brother’s intellectual bunker. She boasted about something called ‘Amway.’ At first, this peculiar word hadn’t made much sense, although I soon realised that it had to be the name of the US-based organization behind my brother’s mysterious metamorphosis.However, my mother had sensed my initial confusion and become triumphant. She proudly proclaimed my brother to be a ‘completely changed man’…a ‘financial consultant,’ who, along with his ‘new business associates, helped people to start their own networking businesses and change their lifestyle.’ Why wouldn’t I let him ‘Help’  me to ‘change in the same way ?’


 



When challenged, my mother couldn’t begin to describe what my brother was doing in clear terms. She was even forced to admit that, at first, ‘Amway’ had sounded a bit suspicious, because it involved a lot of complicated ‘pin-levels and percentages’ which she couldn’t figure out.However, she’d made up her mind that my brother was a ‘university-educated man’ who knew ‘exactly what he was about’… he loved his family and wanted to ‘help all of us’… there could be ‘no risk in his business’ because there was ‘no capital outlay’my brother had been ‘Introduced to Amway’ by an ‘old school-friend’ (a lawyer)… they had ‘checked-out networking,’ it was an ‘entirely ethical business accepted all over the world’… why did I want to make a fool of myself by arguing with ‘business experts’ who knew far more about legal matters than me ?… my brother had been ‘networking for several years,’ he was ‘already making good money’… ‘Amway’ was the ‘business for the 21st  century,’ it was myself who was ‘crazy to imagine’ that it was a ‘pyramid scam’…my‘Selfish’ reaction in ‘refusing to support’ my ‘own brother,’ proved that I ‘didn’t give a damn’ about my ‘family,’ I was ‘disloyal.’ 


My motherhad met my brother’s‘new business associates,’ they were ‘all decent, honest and hard-working young couples trying to do something positive with their lives.’ She was sure that many ‘professionals, businessmen, police officers, Conservative politicians, journalists and celebrities endorsed Amway,’ and that the ‘company’ was ‘Christian-inspired’ and had ‘given generous donations to innumerable good causes, including a minibus to a local Methodist chapel’‘Amway’ was the ‘world’s largest private business, founded in the USA in the 1950s… it’s owners published multi-billion dollar sales figures’… there was ‘no way thatanything so big, and long-established, could be crooked !

My mother’s child-like faith in something beyond her understanding, and which sounded far too good to be true, had only confirmed my original fears. All my instincts told me that my brother was involved in something stupid and potentially disastrous. I’d continued to tell my mother this with increasing frustration, but she’d acted as thoughI was consumed by childish jealousy, inventing outrageous lies about my brother in a blatant attempt to turn her against him and get hold of all her money.No matter what I said, she’d stubbornly refused to listen to any criticism of my brother or to come and visit with me to convalesce. For my mother, it was unthinkable that I could have a more-informed opinion than her. In the end, I’d had to return to France, but I remained very concerned.

The immediate response of my two friends was to roll their eyes in disbelief. ‘Oh no’ they said almost in unison: ‘Don’t you know ? Amway’s a cult !’ Although this idea had already crossed my mind, I smiled and told them that I thought they must be exaggerating somewhat. After all, how could a cult be based on soap? That still seemed absurd. So my friends started to tell me about another, previously-passionless, ‘thirty-something’ schoolteacher who’d caught the ‘Amway’bugin their home town. Just like my brother, at a vulnerable moment in his life, this man had been contacted (out of the blue) by a former class-mate whose relentlessly-enthusiastic personal testimony had triggered a revelatory experience. Almost overnight, he too was in the same delirious state of self-righteous euphoria - totally convinced that he could ‘help’ all his friends and relations achieve ‘total financial freedom.’ A local wit had given him an appropriate nickname, the ‘Jackpot Witness.’ It was even rumoured that he was on drugs, because he’d changed so abruptly. 


The man had systematically invited everyone he knew to dinner - he had a‘once in  lifetime opportunity  for  them.On each of these contrived occasions, he had performed the famous ‘what do you dream of achieving?’routine. He had then excitedly told his embarrassed guests that‘within a couple of years’ he was going to ‘retire,’ buy a ocean-going yacht and spend the rest of his life ‘cruising the world.’He was so confident that Multi-Level Marketing’was the ‘proven way to achieve your dreams and goals,’ that he had fixed posters of the exotic places he was intending to visit, at strategic points in his home. However, this guy had not only quit his job and then lost his home and savings, but he had also ditched his wife, friends and family who had all tried to stop him. As far as my friends knew, rather than laugh at himself, and admit that he’d fallen for a con, he had attempted to kill himself before spending some time in a psychiatric unit.



Even if all this lurid anecdotal story was true, from what I’d actually observed ‘Amway’still appeared to be more like a pyramid scam than what (at the time) I understood to be a cult. My mother and brother were certainly very difficult people with fragile egos (who wouldn’t be proved wrong), but they weren’t homicidal maniacs. I preferred to believe that there was no way that anyone in my family could join a cult,and, in truth, I was too proud to seek more-informed advice. This turned-out to be a big mistake.

Soon afterwards, I returned to England to visit my mother. Although she had aged dramatically, she was still managing to live alone. As long as our conversation remained at a trivial level, everything was fine between us. However, when I tried to talk seriously to her, she suddenly clutched at her chest and began gasping for breath. My mother struggled to tell me that she’d promised my brother that she wouldn’t ‘discuss money’ with me… why wouldn’t I understand that stress could kill her?… if I wanted ‘to discuss money,’ then I would have to see my brother.For obvious reasons, I refused to meet him. My mother was severely crestfallen and she begged me to reconsider. She was now in tears, but this new approach still seemed to be a recruitment ploy. Rather than risk my mother’s health, I left her home, but I was at a complete loss as to know what to do for the best. A few days later, when I was en routeback to France, I had a problem with my car. I was forced to return to the North of England. I telephoned my mother. She seized the opportunity. At a weak moment (when I was tired and under pressure) she made me feel really guilty by inviting me to come back and stay with her whilst my car was being repaired. All of a sudden, nothing was too much trouble. Even my brother’s girfriend (whom I hardly knew) kindly offered to drive me to pick up some parts. In this way, I became obliged to encounter my brother.My mother promised me thatthere would ‘be no mention of Amway’… my brother only wanted to ‘Help’ me, I would be ‘pleased.’ A meeting was arranged at her home. When my brother arrived, he was like a dog with two tails. He guided me into a room and closed the door. We were all alone. For obvious reasons, my brother now saw himself as the head of his family. He was insufferable, so I took the initiative and told him exactly what I thought: For years, it had been a waste of breath trying to get our mother to admit that she’d inherited anything of value, let alone persuade her to relinquish control of any part of the family’s capital… just when I thought that sanity was about to prevail, she had suddenly decided to exclude me in favour of someone so devoid of business acumen as to have fallen for a pyramid scam…

Uncharacteristically, my brother remained completely serene. He made no attempt to interrupt. Instead, he lent forwards, nodding and staring at me; apparently, with great interest. When I’d had my say, my brother smiled knowingly and, in a studied manner, asked: could we firstagree that our mother’s health was ‘far more important than money ?’ When I said: ‘yes, of course,’ but that it was easy for him to say this ‘given the circumstances,’ he announced thatI was completely wrong about what he was doing… like me, he ‘believed in free-enterprise’… he was ‘building’ his ‘own business with the goal of financial freedom’… this was why he could ‘identify’ with me and why he wanted to ‘help’ me, but, before we went any further,would I accept that I had ‘no right to interfere’ with his life?He wouldn’t be ‘drawn into a ‘childish argument with an ill-informed critic’ who didn’t even know ‘the basic differences between illegal pyramid scams and legal Multi -Level Marketing.Self-evidently, my brother was still working from his script, but, because he seemed to have given up trying to recruit me, I modified my attitude. I conceded that whatever he chose to do with his life was entirely his own affair, provided it didn’t involve me.

My brother was now almost hugging me. He insisted that he didn’t agree with our mother’s decision to exclude me, but he knew the ‘real reason’ why she’d done this… he couldn’t ‘be held responsible’… we were both ‘forced by circumstance to respect our mother’s wishes’… we risked ‘giving her a heart attack’ if we argued with her… he could appreciate my point of view, but I had to accept that our mother wasn’t ‘mentally incapable’… she was ‘still perfectly entitled to decide’ what she wanted to do ‘with her own property’… she had ‘made a free-choice,’ no one could ‘challenge this in law.’ My brother confessed that I’d had good reason not to like him in the past.He then told me thatI was ‘making an enormous mistake’… he was actually on my side… he was ‘not only concerned about our mother’s welfare,’ but also about mine.My brother smiled broadly, offered me his hand, looked me straight in the eye and assured me that he was a ‘changed man’ who felt ‘ashamed’  about how he had ‘bullied’ me when we were younger, he’d been ‘jealous’ of me. Would I accept his apology?... Fortunately, he was now in a position to ‘redeem’ himself… he wanted to be my ‘friend’… he couldn’t alter our mother’s decision, but what else could he do to ‘help’ me? After this unprecedented personal disclosure, I began to drop my guard. I responded to my brother's offer of ‘help’with detailed information about what I was doing. He took copious notes.

The owner of my home in France was an English friend badly hit by the recent economic recession in London. He needed to sell his French property… although he’d paid relatively little for it, he now couldn’t afford its upkeep. My friend had defaulted on his mortgage with a French bank and he owed years of local taxes and charges. My home (a rambling 18th century house and two adjoining houses 100 miles West of Paris), was very attractive and had lots of potential, so, I’d made a private agreement to buy it. I was planning to occupy part of it and convert the rest into apartments to be rented. To stop my friend’s creditors from foreclosing, I had negotiated a delay on his mortgage-arrears and local taxes, and I’d paid-off most of his charges. I was now maintaining his current interest payments. My friend owed me this and other money, but, if I wrote-off these considerable debts, he would pass ownership of the property to me for the remaining value of his mortgage. However, I’d made a wrong assumption; at that time, unlike English law, French law wouldn’t allow me to take-over an existing loan-contract with a bank. For various reasons (including a general credit squeeze), I couldn’t raise all the alternative finance by myself, but I needed to transfer title into my name urgently. In the eyes of the French administration, banks, insurance companies, utility companies, etc., I was neither the owner nor the tenant of my home… I was living in a bureaucratic no-man’s land where even minor procedures were major obstacles. In short, my project was blocked due to a shortage of ready cash.

My brother now began to talk in pseudo-psychoanalytical terms. I’d never heard him use language like this before, but what he said was so personal that I couldn’t accept that these weren’t his own words. He climbed right inside my head by pretending affinitywith me; not just mirroring my own thoughts, but also those of some of my closest friends. My brother explained thatour mother was ‘greatly weakened by advancing age and failing health,’ but she had been ‘unstable for most of her life’… she was ‘insecure’… she ‘suffered from deep-rooted emotional problems’… she had‘always been ruled by irrational, childish fears… suppressed, traumatic experiences blocked her capacity to make rational, adult decisions about money’… instead of seeing me as ‘a grown man with a positive opportunity’… she could only see me as ‘a child and a negative risk’… no matter what I wanted to do, our mother would never agree to support me… she was, therefore, ‘the last person who should have control over money’… she was ‘too emotional.’

At this point, my brother rephrased his previous rhetorical question:‘You’d like the finance for your project wouldn’t you ?’ When I said ‘of course,’ he laughed at me, and told me thathe could ‘easily arrange to put the finance in place,’ but, by criticising him, I’d been shooting myself in the foot.My brother insisted thatif I supported him, he would support me… ‘as the men in the family, we should make all decisions about money without any emotion’... if I stopped saying ‘negative’ things about his ‘business,’ then, there would be ‘no problem’ with letting me use ‘the family properties as collateral’ for my ‘business.’

I found it increasingly difficult to argue with the new version of my brother. Even so, for a while, I told him that there was no way that I could enter into any private agreement. As things stood, I would be completely in his hands. He had no practical experience of business and there was far more than money at stake. I would need to have his absolute guarantee in writing that I would have direct control over the finance. My brother assured me thatIwould ‘have direct control,because we would ‘work together as a team.’ He accepted that I knew exactly what I was doing, therefore, he would just follow my instructions.Although he knew nothing whatsoever about the property market in France, he insisted that,before we made any agreement, he would have to come and view my home, then talk to his ‘friends’ (‘lawyers and financial consultants’)… they could give him ‘free advice.’ Within a couple of weeks, my brother flew to France at his own expense. He stayed for 24 hours and took dozens of photos. However, when he left, he played a puerile game - a sort of behavioural experiment. I had to drive him to the airport. We set-off early, but he kept criticizing my driving and complaining that we were going to be late. No matter how fast I drove: I had to drive faster. In the end, we arrived in plenty of time, but when my brother got out of the car he calmly announced that his flight was actually one hour later than he’d told me. At the time, I dismissed the incident as infuriating, but insignificant.

Soon after his return to England, my brother contacted me with good news’…he had confirmed that my home was an ‘excellent opportunity’… once our mother had ‘signed some documents,’ he would ‘organize a bank loan in England’ and then I could complete its purchase in France… in the meantime, how else could he ‘help’ me ?My brother acted as though he washurt and insulted when I insisted on a written contract -we were ‘Family,’ surely we could ‘trust’ one another. To cover myself, I offered to make him a partner in my project so that he would have some legal responsibility, but he refused. When I again began to express serious doubts about this murky arrangement, my brother informed me thatif I gave him my word that I wouldn’t try to discuss what we doing with our mother - because we didn’t want to cause her even the slightest worry - thenI could forget about paying interest to bankers, he could let me have everything I needed ‘in cash.’

In this way, my brother progressively manipulated me into a position of dependence. This was the last thing I’d intended, but he did it using a classic technique. An irreconcilable conflict was deliberately created in my mind - I didn’t want to be accused of putting money before my mother’s welfare, but I wanted financial security. It was quite easy for my brother to give me the illusion that I was making a free-choice to go along with his dangerous proposal.Subsequently, he began to use a similar ploy to manoeuvre me into a position from which I couldn’t retreat. He followed my first instructions and immediately transferred enough sterling to enable me to settle the outstanding mortgage-arrears on my home. At this point, I was too grateful to establish exactly where these funds had come from. However, I told my brother that once this payment was passed to the mortgage-holding bank, I would be committed. There could be no turning back without a significant loss. At the same time, we discussed the minimum amount still required to complete the purchase. In addition to what I could raise myself, it was far less than 10 % of the current market-value of the capital assets my brother claimed to control. Strangely, he never asked to see any documentation. I’d told him the truth, but I could have told him almost any figure. His attitude was, this was chicken-feed. I made it clear to him that my only income came from buying and selling antiques. I would temporarily have to halt this activity to consolidate my own capital. Therefore, the amount he needed to supply was not fixed - delay would expose me to many variable cost-factors - these would quickly bleed my own limited funds and leave me with no means of making a living; it was vital to ensure that more than enough cash was brought together (in francs) at one time, in one place, under my control and as soon as possible. Again, I told my brother that if he let me down, I had no safety-net - my entire future rested on him. He assured me that there was ‘absolutely no need to worry,’I could ‘go-ahead in France,’ he was ‘already making the arrangements in England’ for my ‘cash to flow.’So (taking my brother at his word), I paid-off the mortgage-arrears, stopped business, wrote-off my friend’s debts and made all the standard preparations with the interested third-parties.

At this time, I was completely fooled. In fact, had someone tried to explain to me that I had taken several paces into a trap - a systematic fraud designed to make it appear to casual observers that the victim was acting independently and was, therefore, to blame - I would have said they’d been reading too much pulp-fiction. However, what should have been one quick step in a purely commercial transaction, now started to turn into a never-ending personal nightmare. On paper, the property deal was all in my name: in reality, I was just a powerless spectator. My brother and his invisible ‘Advisersretained absolute control over the final means of payment.

Whilst I diverted my own energy, time and money into the restoration of my home, my brother acted contrary to all commercial logic. He ignored my next urgent instructions and withheld the key-finance. My logical reaction was to remind him that this was financial suicide; until the property officially became mine, I would be insolvent. Therefore, according to our verbal agreement and the laws of economics, the longer the delay: the more cash he would have to find to replace my dwindling capital. My brother responded by insisting that our mother was the obstruction… he was doing his best to ‘help’ me, etc. Exactly what he was doing remained unclear. In reality (apart from constantly repeating the same ‘positive’ script), he was doing nothing. Days quickly turned into weeks, weeks turned into months. For over a year, my brother drew me into an ever-more infuriating mind-game. I couldn’t get any sense out of him on the telephone, and each time I arrived in England I was forced to return to France empty handed. My brother’s tactics were always the same. He could remain completely calm, whilst I was becoming increasingly destabilised. My own plans were thrown into chaos, and I was made to look commercially incompetent; something which I found very difficult to live with. All the time, the unpaid interest was again mounting-up in francs. Obviously, I’d not budgeted for this, and soon my friend’s bank invoked a penalty-interest clause and began to threaten foreclosure. The more desperate the situation became: the more my brother denied any responsibility.

Just as I’d feared, I had no written contract and, therefore, no external avenue of complaint. When inevitably I approached my mother, falsely-believing that she was causing the delay, I couldn’t hide my frustration. Although I tried to explain to her the mathematics of what was happening, her mind was conditioned not to follow what I was saying. Instead, she began to cry like a child, convinced that I must be trying to confuse her with complicated lies in order to get more money. My mother then said thatI’d got it wrong… she wasn’t involved… my brother was ‘arranging everything’… he was acting in my ‘long-term interests,’ but I didn’t understand this… I needed to ‘have more faith’… everything I ‘dreamed of’ would come to me ‘eventually.’My mother then went to my brother to report. When I tried to talk to her again, my frustration had been reinterpreted - I was ‘too selfish and impetuous’… I’d broken my word… this proved I didn’t care about her health… I was ‘only interested in money,’ etc. My brother controlled all information entering my mother’s head - there was no need for her to listen to me or to consult her lawyer… I’d got myself ‘into a mess’ and he would calmly save me, but I was ‘panicking.’However, my brother still couldn’t tell me when my cash would be available or exactly how he was going to raise it.He told me that there would now ‘have to be further conditions attached.’





Soon, my brother was trying to introduce infantile rules about what I could say, and do, in his presence. He began to act like a sarcastic drill-sergeant. At one stage, he declared that I swore too much,and that he couldn’t accept ‘negative words’ like ‘difficult’, ‘impossible’, ‘losses’ and ‘problems’… I should also ‘remove all selfish words’ like ‘I’, ‘me’ and ‘mine’ from my vocabulary…until I showed ‘100 % positive mental attitude,’ he couldn’t ‘help’ me.For a while, I still kept trying aggressively to persuade my brother to take action, but, the longer he withheld the payment: the less I could afford to upset him. In the end, there was nothing I could do except try to appease him. I had to face the fact that I’d allowed my way of life to become dependent on someone who had briefly appearedto be reasonable,but who was now acting like a madman. Although my situation was rapidly getting out of control, it still retained an almost unreal aspect. I had no possibility of employment in France, no right to State benefits and no cash available for business, but I did have a roof over my head and some good friends. I kept kidding myself thatmy brother would have to keep his word.Once I’d transferred my home into my name, I could use its 100 % equity value to complete its conversion and to refinance my business. With a bit of luck and some hard work, I could quickly recoup my losses and regularize my personal situation. I started selling my possessions and I cut my living expenses to a minimum to hang on. It was during this period, that my brother and his partner moved in with my mother. Things then went from bad to worse.

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The day my brother and his partner arrived in my mother’s home, a ‘cultural revolution’ began. They brought stacks of bizarre American-published paperback books on ‘Personal Development’, ‘Self-Betterment’, ‘Self-Motivation’, ‘Leadership Training’, ‘Positive Thinking’, etc. (‘The Magic of Thinking Big’, ‘The Miracle of Motivation’, ‘The Greatest Secret’, etc.). Although my brother had always poured scorn on religion, many of these tomes were written in directly religious terms. 





The couple had hundreds of related magazines and recordings. They spent their weekends travelling to attend what they described as ‘Business Functions.’ They tidied-up my mother’s house and started to stockpile boxes of banal, but outrageously-overpriced, products supplied by the‘Amway Corporation.Their parallel world defied all logic. I can remember trying to give my brother’s partner a packet of coffee that I’d brought from France. It was promptly thrown back in my face by my brother on the premise that he sold a ‘premium coffee’ in his ‘Business.’However, the coffee I’d brought was the finest quality, 100% Arabica, whilst the small print on the back of his‘Amway’  product revealed it to be caffeine-rich rubbish that would keep an elephant awake half the night. I later discovered that, at this time, ‘Amway’ coffee was about 5 times the price of its bitter-tasting equivalents in French discount stores.

Another friend insisted that ‘Amway’was a ‘brainwashing cult just likeScientology and that I was grossly-underestimating its danger. Someone else alluded to the ‘KKK’and ‘Nazism.’ Even though I still had no real understanding of the cult phenomenon, I was now forced to agree. However, for obvious reasons, I was constrained not to challenge my brother. Any individual who dared to cast the slightest doubt on the authenticity of his beliefs was first dehumanized as ‘just another whining negative… one of life’s losers, too stupid and selfish to recognise the chance of a lifetime,’then totally shunned. My brother now didn’t ever get angry, he had succeeded in excluding all his‘negative emotions.’


Meanwhile, because of the factors which were beyond my control, the cost of my project was escalating, but I was still managing to hang on. However, at this time, sterling dropped-out of the ‘European Exchange-Rate Mechanism.’ The pound plunged against the French franc. Almost every day, I had to sit and watch whilst the immediate price of my home went up (in France) and the value of my (promised) means of payment (in England) went down by the same amount - producing a double-effect, soon totalling over 50 %. Previously, when I’d contacted my brother to implore him to use any available sterling to buy francs, he couldn’t even register this vital procedure: let alone execute it. He was like a machine relentlessly spewing his group’s ‘commercial’ jargon and acting the role of calm financial consultant, but he was incapable of understanding the most-basic economics. I can remember trying to explain to an incredulous friend that it was as though my brother had been hypnotised or drugged. When I asked him if he watched the television or read the papers, my brother sneered and recited puerile, thought-stopping clichés - he was ‘too busy building the Business.’ In his ‘100% positive Amway’world, ‘negative’concepts (i.e. fluctuating exchange-rates and penalty-interest payments) simply did not exist - ‘to achieve success, you must stop searching for excuses and believe 100 % that you will succeed!’ Unfortunately, in the adult world of quantifiable reality, my credibility with all the interested third-parties was rapidly being destroyed. To casual observers, I appeared to be the reality-denying fool and liar, not my brother. I began to lose what remained of my sense of humour along with my enthusiasm. It became pointless for me to try and make any decisions or to continue even the most pressing work on my home. The more effort I put in: the more I risked losing. Eventually, even my closest friends couldn’t understand what was happening - why had I gone cold on such a great project? The better people knew me: the more unbelievable it all seemed. I felt depressed and humiliated. For a while, I tried not to let the situation affect my private life, but, as my own resources dwindled to zero, I started losing sleep. I then found it difficult to control my anger. I was the voice of reason, but with the apparent face of insanity.

In desperation, I went to see my brother for a show-down. I told him that we had long-since passed the point of no return… if he didn’t come to his senses and take immediate action, I had decided to quit my home, lose all my previous work and investment and return to England destitute… he’d led me into a hole and I’d already stopped digging. Even if he immediately supplied twice the amount that we’d previously discussed, I could no longer guarantee to complete the transaction and regularize my situation. The delay meant that he needed to supply a lot more sterling and the sum was increasing all the time. I made a final attempt to give him a break-down of the figures, but, predictably, my brother wasn’t in the slightest bit interested. Without a flicker of emotion, he started to attack me on a vicious personal level designed to reduce me to the position of a guilty child. He stared at me and, in a mocking voice, accused me of beinga ‘whining little loser’… a ‘lazy little parasite’… a ‘pathetic little wimp’ who couldn’t stand on my own feet and accept responsibility for my own actions… I was ‘obsessed with money’… it had beenmy own ‘free-choice’ to buy such a large property and to accept his ‘help’… I’d said ‘yes,’ no one had forced me… any extra cost was, therefore,the result of my own ‘selfishness and greed’… I was now ‘searching for a scapegoat. When I still tried to stand up to him, my brother countered by producing one of my mother’s diaries and reading aloud from it. I was portrayed asa childish liar and bloodsucker who didn’t care whether she lived or died. At that moment, I felt physically sick. I put my hands on my head. My instincts told me to pin my brother to the wall and tell him to stick the money, but I managed to reason that this must be exactly what he wanted.



Suddenly, my brother switched-off the viciousego-destroying drill-sergeant, and switched-on the kindly ego-building father-figure.He offered me immediate deliverance,but only if he could ‘present the Amway business opportunity’ to me. I was dumbstruck. For an instant, I couldn’t think straight. He shepherded me into the room where he did all his recruiting and closed the door. What followed was truly weird - like having a witch-doctor perform a voodoo incantation whilst you bleed to death. My brother stared at me again, but this time he smiled in triumph. He was almost drooling with excitement. He then launched a relentless barrage of hypnotic Amway’jargon. Simultaneously, he started to draw a mystifying pattern (a pyramid of circles, containing numbers and percentages, connected by lines) on a large, blank sheet of paper - he was ‘about to go Direct in the UK’s biggest Amway Network, International Business Systems or IBS for short’, he’d always ‘visualised us building the business together’…‘MLM’ was a ‘duplication business’ - this wasthe ‘IBS Plan’ … he ‘exactly duplicated’ his ‘Uplines’s example’ and bought at least ‘200 ‘PV’ of positive product every month’ if he ‘sponsored’ me, I would become his ‘Downline’… if I then ‘exactly duplicated’ the ‘Upline example’ and bought at least ‘200 PV of positive product per month’ and then ‘sponsored 6 Downlines,’ who each ‘exactly duplicated’ the ‘Upline example’ and bought at least ‘200 PV of positive product per month’ who then ‘sponsored 6 more Downlines,’ who each then ‘sponsored 6 more Downlines,’etc. etc… ‘within 2-5 years we could both be Diamond Distributors earning a minimum of £ 37 000 ($ 50 000) a year in commission from all the thousands of Distributors automatically multiplying in our Downline groups.’

After 5 minutes, that felt like a lifetime, I walked out. The atmosphere was indescribable. I’d seen, and heard, more than enough to realise that, from the start, my brother had been deliberately sabotaging my life. He was now trying to use my vulnerability to force me to join his crackpot pyramid scam, but he was genuinely convinced that he was acting in my long term interests.I returned home exhausted and depressed. Two weeks later, my brother lured me back to Englandwith a promise of the cash we’d discussed more than a year before. Obviously (when all the additional costs were taken into consideration), this amount represented an enormous net-loss. However, my brother’s poisoned mind was incapable of receiving what it systematically reinterpreted as ‘negative’ information. I realised that it was pointless trying to explain to him the actual sum now required to complete my purchase. My brother solemnly proclaimed that he’d tried his best to ‘help’ me by bringing me into his ‘business,’but my refusal had finally proved to him that I was ‘just a selfish loser’he couldn’t be held responsible for my ‘failure’even if I ‘begged to join Amway,’ it was ‘now too late.’ Under normal circumstances I would have laughed, but now it was impossible to see any humour in the situation.


My brother then supplied approximately 80 % of the sterling he’d promised. At the last moment, he obliged me to sign a blank receipt and to promise that I would only use the payment for my project. By this stage, I would have accepted almost anything to save my home, but, soon afterwards, I discovered that my brother hadn’t been using family money at all. He had emptied his own, and his partner’s, savings accounts - this explained the odd amount. At the same time, he had convinced my mother that I had freely signed an agreement to accept his generous payment as my inheritance… I’d been given exactly what I’d requested to complete my transaction. Again, he’d made sure there were no witnesses to what had really occurred. My brother was like a bent cop framing an innocent suspect. He had arbitrarily decided that, for the purpose of their division, our family’s properties were worth a tiny fraction of their market-value. He had reams of his own contemporaneous notes to prove his case, but these took no account of the subsequent delay. My brother then gave-up his job and began pretending thathe’d ‘retired thanks to the Amway business opportunity. In reality, he was using his stolen prosperity (and his partner’s salary) to bedazzle his prospectiverecruits and to finance his allied ‘Amway’activities. I was now more than ready to tell him exactly what I thought, but when I tried to confront him by telephone, he played the robot and refused to talk with me. At the time, I could not control my anger - I almost didn’t recognise myself.

As a result of the intervention of a close friend, who persuaded my mother to consult her lawyer, I was again offered deliverance,but onlyif I ‘agreed’ to sign a legally-binding contract. However, I was not allowed to communicate directly with the lawyer and I couldn’t afford legal representation. I had to attempt to negotiate the contract through my friend, but she was being overwhelmed by constant claims thatmy mother would die if there was any argument. To my friend, it was unthinkable that anyone could be so manipulative. In the end, my friend was begging me to remain silent. Consequently, the contract reflected my brother’s inverted world-view. In short, I was falsely blamed for everything. Ironically, when my mother’s lawyer discovered the rising market-value of my home (more twice the outstanding mortgage-debt), he advised her to raise a loan in England(using family property as collateral) and to complete its purchase using French lawyers to instruct the interested third-parties. The one time I met with my mother and brother was when the contract had to be signed. Only at this point, was I allowed to read it. When I started to challenge it, my mother began clutching at her chest and gasping for breath. In the end, I felt obliged to comply. The atmosphere was again indescribable. On the contract, the previous (net-loss) payment was now falsely recorded as a ‘personal loan’from my brother. My friend had been verbally assured that ‘this was for reasons of tax’…he would ‘never demand repayment.’Although the contract gave me 6 months before any interest was due, I was made responsible for an additional sterling-loan (recorded as being from my mother) and for two sets of lawyers’ fees (10 % of the total debt). Interestingly,my brother declared his occupation to be a ‘qualified schoolteacher’ - there was no mention of his ‘Amway Distributorship’or his recent ‘retirement. In total, it took over two years to conclude a relatively simple house purchase that I’d planned to take no more than 6 weeks, and it could not have been finalised at a worse time. My urgent instructions (which had been quasi-identical to the long-winded, and expensive, advice of my mother’s lawyers) had been completely ignored. With all the unnecessary delay, the cost of the transaction in sterling had doubled. Instead of having a home and 100 % equity, producing a secure rental-income and financing another business (which had been my overall strategy), I was saddled with a major debt and no lawful means of servicing it. I had already lost an incalculable amount of time and income, whilst a self-defeating clause in the contract now prevented me from legally-renting out any part of my home. However, the money had long-since become secondary. My peace of mind and state of physical health were disintegrating along with my way of life. Several close relationships had already become strained to breaking-point. For this reason, I couldn’t bring myself to speak with my family.

I heard nothing for almost 6 months, and I was starting to recover, when my mother (at the instigation of my brother) sent me a leaflet from another American-registered company, ‘Marketing Group International.’Its ‘British office’ wanted an up-front payment of approximately $300 ‘to offer European houses for sale in Hong Kong -  it was an obvious ‘advance-fee fraud,’ but my name was already filled-in on a form in my mother’s distinctive handwriting. When I contacted her lawyer in England to express my concern, he claimed that she had no knowledge of this,and he demanded a crippling interest payment on behalf of my mother and brother. The lawyer also believed that if I refused to comply, I would be risking my mother’s life. Thanks to my brother, I had neither equity nor income. Subsequently, a lawsuit was filed against me in France to take possession, and force the sale, of my home. My only possible defence witness was my friend who had negotiated the contract. However, she now refused to support me, totally convinced that she too might be blamed if my mother dropped dead.Although my mother’s name was on the documentation, in reality, all the proceeds of any sale would have only gone to the benefit of my brother and his invisible ‘Amway business associates.’

Major 'MLM' crook, Mark Shurtleff, arrested.

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hen Mark Leonard Shurtleff (b. 1957) was Attorney General of Utah, he was on the take from the 'MLM Income Opportunity'crime syndicate; particularly, the gang of racketeers behind 'USANA.'In the above video from 2007, Shurtleff can be seen not only enthusiastically committing wire fraud on behalf of the 'USANA' racketeers, but also obstructing justice by telling victims that if they try to file complaints with the Utah AG's office, they will be ignored. To cover his back, in the same video, Shurtleff admitted that many so-called'MLM schemes' have turned out to be frauds. Shurtleff insisted that 'MLM schemes' are legal in Utah, but he failed to disclose that various de facto agents of 'MLM income opportunity' racketeers had a corrupt hand in writing an amendment to Utah State legislation, exempting so-called 'MLM schemes' from common-sense statutes which previously banned all endless-chain, pyramid frauds.  It almost goes without saying that Mark Shurtleff was paid (with stolen money) to support this amendment (SB 182)
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After investigating for more than a year, authorities on Tuesday arrested two former Utah attorneys general on charges of bribery, misusing public funds and other counts. Salt Lake County District Attorney Sim Gill on Tuesday laid out allegations against John Swallow and Mark Shurtleff that involve gold coins, luxury houseboats and jets and thousands of dollars in cash or campaign contributions. Swallow and Shurtleff, both Republicans, have denied wrongdoing and the accusations against them.
Here's some highlights of the allegations:
LUXURY GIFTS
Authorities said both Swallow and Shurtleff used a luxury jet and personal property belonging to a businessman indicted on federal fraud charges. Swallow also used the businessman's million-dollar houseboat on Lake Powell.
In another case from 2008, Shurtleff negotiated a plea deal for a Utah businessman facing fraud charges that was so lenient a judge wouldn't accept it. After a more stringent deal was reached and the businessman was on probation, he put up Shurtleff and Swallow at a high-end Newport Beach resort and bought them meals, rounds of golf, clothing and massages, prosecutors said.
When Swallow left his job at a Utah payday loan company to join the attorney general's office, his employer gave him 12 one-ounce gold coins, court documents said. While he was a chief deputy in the attorney general's office, Swallow sold back the coins one or two at a time to the same former employer, receiving $17,000 in all, which is more than they are worth, Gill said.
INFLUENCE PEDDLING
In 2012, the attorney general's office intervened in a lawsuit against a Bank of America subsidiary on behalf of thousands of Utah residents facing foreclosure. The Salt Lake City-area couple that brought the suit then spent $28,000 holding a campaign fundraising party for Swallow. The couple's individual case was settled favorably, but Shurtleff in December directed the attorney general's office drop the state case, despite objections from staff attorneys. Prosecutors said a division chief in the Utah attorney general's office reported Swallow indicated to Bank of America that Utah would drop the case if the couple's case was settled favorably. Shurtleff later accepted a position with a Washington, D.C., law firm that represented Bank of America.
PAY TO PLAY
Both former attorneys general are accused of taking at least $50,000 in cash or campaign contributions from people who came under scrutiny from their office. One businessman claimed that in 2009, Shurtleff had offered him $2 million if he stopped trying to find a suspected swindler. In 2010, a St. George businessman's online company came under federal investigation. Authorities said he asked Swallow to secure a meeting with Senate Majority Leader Harry Reid of Nevada. Swallow responded by saying he has a liaison to Reid but it "won't be cheap," court documents state. The businessman later paid $250,000 to the liaison, who in turn paid Swallow more than $23,000. The businessman, who now faces dozens of federal fraud charges, claims the plot was to bribe Reid to throw off investigators. Reid and Swallow have denied that. Swallow said he was connecting the businessman with lobbyists and the $23,000 was for separate consulting work. Reid has not been implicated in the investigation.
COVER UPS
In May 2013, Shurtleff lied to FBI investigators about practices in the attorney general's office, campaign donations, gifts and bribes, charging documents state. During subsequent state investigations, both Swallow and Shurtleff gave false information to investigators, Gill said. Swallow is also accused of destroying evidence and falsifying invoices and other documents to cover up his conflicts of interest.

_______________________________________________________________________

Mark Shurtleff's arrogant, reality-inverting reaction to his recent arrest, can only be described as pathetic.

David Brear (copyright 2014)

Read more here: http://www.miamiherald.com/2014/07/15/4237959/charges-detailed-for-utah-ex-attorney.html#storylink=cp
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Robert FitzPatrick's Open-Letter to the FTC.

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Robert FitzPatrick



Open Letter to the Members of the US Federal Trade Commission
 and 
Officials of the Consumer Protection Bureau

Identifying “Bright Lines” for Determining Illegality of 
Any Multi-Level Marketing Company
under Section 5 of the FTC Act

Robert L. FitzPatrick,
Pres., Pyramid Scheme Alert,
Co-Founder, International Coalition of Consumer Advocates
©2014 Robert L. FitzPatrick

1800 Camden Rd. Ste. 107 #101
Charlotte, NC 28203
RFitzPatrick@falseprofits.com
http://www.falseprofits.com
704-334-2047

July 4th, 2014

Edith Ramirez


US Federal Trade Commission
  • Edith Ramirez, Chair
  • Julie Brill, Commissioner
  • Maureen K. Ohlhausen, Commissioner
  • Joshua D. Wright, Commissioner
  • Terrell McSweeny, Commissioner
  • Jessica Rich, Director, Bureau of Consumer Protection
  • Katherine Fallow, Deputy Director
  • Daniel Kaufman, Deputy Director
  • Lois Greisman, Assoc. Dir. , Division of Marketing
  • Monica Vaca, Asst. Dir., Division of Marketing
  • James Kohm, Assoc. Dir., Division of Enforcement
  • Mary Engle, Assoc. Dir., Division of Advertising Practices
  • Carolyn Shanoff, Assoc. Dir., Div. of Consumer & Bus. Education
  • Reilly Dolan, Assoc. Dir., Division of Financial Practices
  • Rob Kaye, Chief Litigation Counsel
  • David C. Shonka Acting General Counsel
  • John F. Daly Dep. Gen. Counsel for Litigation
  • Burke W. Kappler Attorney
  • Dr. Peter Vandernat, Sr. Economist


Dear FTC Commissioners and Officials,

Thank you for the opportunity to express my views on the critical question now facing the FTC – determining a consistent, understandable legal standard of law enforcement for multi-level marketing (MLM). This letter directly responds to a request from the office of the Director of Consumer Protection to offer ideas and recommendations on the subject of “bright lines” of illegality.

Background notes, supporting data and recommendations are in the following pages presented as an “open letter.” This letter follows up the one-thousand petitions and formal request sent to the FTC in October, 2013 by the International Coalition of Consumer Advocates signed by attorneys, authors, academics, former regulators, and consumer activists from Europe, Asia and North America to investigate and regulate multi-level marketing,now the most common form of work-at-home business and financial solicitations in America.

It is an understatement to say this task is overdue. Virtually every household in America is affected. The aggressive political influence-buying these companies now engage in to thwart law enforcement, the confusion they have sown around what constitutes a “pyramid scheme” – making the public more vulnerable to swindles –and the controversy that now engulfs Wall Street about the legality of various MLM companies have made the FTC’s task urgent and unavoidable.

It is my view, reflecting those of many others who have studied, written about, litigated and directly experienced the realities of “MLM”, that identifying “bright lines” of unfairness and deception under Section 5 of the FTC Act requires not so much a government inquiry as it does regulatory recognition and will.

The electrifying and cruelly misleading “endless chain” income proposition, outrageously false incometestimonials, dangerously false medical and diet claims, 99% loss rates among participants and marketing and compensation plans blatantly and existentially based upon continuous recruiting of new participants whose investments are transferred to earlier ones – these are the glaring bright lines that my letter describes and documents. They are everywhere one looks in the MLM marketplace. Fraud is in plain sight.I believe it is fair to say that my own hope that the FTC will face the challenge to halt and prevent endless chain frauds disguised as “multi-level marketing” mirrors the aspirations of millions of other people. The whole world is watching.

Sincerely,

Robert L. FitzPatrick



________________________________________________________________________
                                                       

Introduction


Jessica Rich



This memo is a personal follow-up to an hour-long conference call on June 9, 2014 that I participated in with Ms. Jessica Rich, Director of the FTC’s Consumer Protection Bureau and several of her associates. During this call, I and two of my colleagues, Attorney Douglas Brooks and former Asst. Attorney General of Wisconsin (Retired), Bruce Craig, presented economic data, legal citations, interpretations and references to federal court decisions relevant to pyramid selling schemes, aka multi-level marketing, (MLM). We discussed factors of legality, economic significance and the impact of the proliferation of endless chain schemes on individual lives and American society.

Additionally, I had submitted a five-page memo prior to the call, entitled, “The Economic Case for a New FTC Policy of Law Enforcement on Pyramid Selling Schemes Promoted as Business Opportunities.” The memo contained documentation and data on the reality of consumer losses among the millions of consumers who have invested in the ubiquitous MLM “business opportunities” and on the absence of what is conventionally understood as market based retail selling among major MLM companies. The memo concluded that MLM could not be characterized as “direct selling” or as a “business opportunity”, given the absence of true retail selling and the near universal lack of income among consumer investors, euphemistically called “distributors”.

The report showed how the MLM “industry” has falsely represented that “millions” of Americans gain full or part-time profitable income from MLM businesses, even spreading the false claim of a “median average income” for 15 million participants of $2,400. The actual data show a median income of zero or a substantial negative figure. Limiting the data only to the upper 37% of participants, who are unquestionably classified as seeking income, the median income is still zero. My memo included 2012 hard data on three of the largest MLMs, Amway, Nu Skin and Herbalife, accounting aggregately for 10% of the entire field in America, or 1.431 million Americans who purchased goods and paid fees totaling $2.259 billion under MLM contract terms, including the granting of the right to recruit others and benefit from the endless chain pay formulas.Out of this 1.431 million Americans under contract, the data show only 5,500 gaining what might be considered a livelihood income of $60,000 or more per year, before all expenses and product purchases are subtracted. This group, accounting for about 1 out of every 250 in a one-year timeframe (far less when a longer time frame is applied), received the equivalent of 32% of the three companies’ entire USA revenues each year. The payments are based only upon the purchases – not sales – of the other 99.6%. Fifty-four percent (54%) of all reward payments were transferred to this group situated at the peak of sales chains.

In summary, while MLMs attract as many as 15 million consumers to sign the hallmark contracts 
offering the endless chain income plan, more than 99% never earn any net income annually. The income of the top 0.39% is not gained by “direct selling.” Indeed, few at the top or at any other level engage in what would be conventionally considered profitable direct selling. The high incomes are gained through a complex formula of money transfers tied to recruiting other recruiters.

Note: The data and analysis we presented to the FTC applied to the great majority of MLM 
companies that employ the one-to-one recruiting plans, rather than the smaller segment of party-plan businesses such as Tupperware.
                                                       


Untenable Position

Beyond documenting the negative economic realities of MLM on American household income or employment, most of our June 9 FTC conference call addressed the unchallenged reality of the current position of the FTC concerning these schemes in which the FTC lacks a consistent or understandable standard for determining illegality, rendering effective FTC prosecution and law enforcement in this sector essentially impossible and, indeed, virtually non-existent. The successful but extremely rare FTC prosecutions of a handful of MLM companies over the last few decades, out of the hundreds in current operation, document the reality of fraud within the ranks of these types of enterprises. These prosecutions are a great public service for which the FTC and its staff deserve gratitude and commendations. Yet, the lack of any meaningful criteria for determining illegality of this type of business makes the prosecutions arbitrary and, from a broader consumer protection perspective, largely pointless. Since virtually all MLMs appear to replicatethose that were prosecuted yet are untouched by FTC regulation or law enforcement, to many people the prosecutions indicate widespread, possibly universal, fraudulence, which the FTC appears to be ignoring. To others, the few prosecutions are cited to claim that all the other MLMs are, de jure, legitimized.

We argued that this situation, by any standard, is intolerable. The most important fact we presented was that the current position of the FTC relative to multilevel marketing leaves millions of people in America and around the world without any means of distinguishing legitimate direct selling opportunities from pyramid swindles. This financially dangerous situation is exacerbated by the expansion and multiplication of these enterprises and theiraggressive financial solicitations, which now affect virtually every household in America. Individual household losses may range from a few hundred dollars to tens of thousands and are commonly accompanied by family disruptions, loss of credit, and derailment from other meaningful employment or educational pursuits. In recent years, these schemes have begun targeting the most vulnerable sectors of the public, students and immigrants.

It was also noted that the FTC’s untenable position for consumer protection and law enforcement toward multi-level marketing has now generated a dangerous uncertainty in the securities markets, putting pension funds at risk that are invested in MLM enterprises that are being openly challenged for operating illegally. Our conference call presentations were respectfully received. The main response consisted of one pointed question posed to us to present our own views on “bright lines” for distinguishing illegal marketing practices among multi-level marketing companies.

In this memo, I offer my own personal response to that question. Though the views contained in 
this memo are my own, I present them in the format of an open letter due to their public interest 
importance and because they are based upon and reflect the research and efforts of many other people who have courageously served as whistle-blowers and public interest advocates.

I am co-author of a book on multi-level marketing, researcher of MLM compensation plans and 
marketing practices, business model analyst, expert witness, consultant, and consumer educator. Like others in this field, I have endured hate mail, threats and lawsuits from MLMs and their promoters for publishing information relevant to prosecution and enforcement. I am grateful for the personal and direct invitation from the FTC to offer my views. I do not represent any other party in preparing and submitting this memo and have received no compensation from anyone in connection with it. I personally have no financial interest in any 
company or type of company that is referenced.


The FTC’s Dilemma


As Jessica Rich publicly stated, “The Commission is first and foremost a law enforcement agency.”

Yet, in the area of network marketing schemes, which aggressively solicit and persuade at least 15 million households each year to sign long and complicated commercial contracts and gain $30 billion from the public under those contract terms, the FTC acknowledges that law enforcement is severely inhibited. The difficulty is related to the lack of a legal demarcation between multi-level marketing, which is generally described by the FTC as legitimate, and pyramid schemes which are officially treated by the FTC as inherently unfair and deceptive under Section 5 of the FTC Act.

The lack of this demarcation was even cited by the FTC staff to support a recommendation that
no disclosure rules be applied to multi-level marketing companies, because they could not be usefulto consumers in distinguishing fraud from fairness in MLM. The FTC staff wrote to the Commission, “There is no bright line disclosure that would help consumers identify a fraudulent pyramid from a legitimate MLM.” MLMs, by far the largest of all “business opportunity” purveyors, were then exempted from the new FTC rules requiring greater disclosures in business opportunity solicitations.

Based on a reading of the FTC’s original proposal for the business opportunity rule, the basis for, ultimately, exempting MLM was a non sequitur. The “Biz Op” disclosure rule was intended only to provide information to prospective distributors about the “business opportunity.” It was never intended to enable consumers to distinguish pyramid schemes. In fact, there were many provisions of the rule that would be extremely useful to consumers for due diligence purposes when faced with MLM’s ubiquitous financial solicitations.

Thus, the FTC is not only hamstrung from performing its main role of law enforcement, but it
cannot even enact preventive measures to help the individual consumers get enough information about MLM on their own to evade frauds or even to conduct reasonable “due diligence” into the investment opportunity’s true value, whether fraud is involved or not. MLMs are currently not required to make any financial disclosures at all to the millions they solicit for investments.In its other role as a consumer education force, the FTC’s consumer warnings relative to multi-level marketing are similarly constricted and contradictory in light of the near absence enforcement actions. The box to the right is from a 2009 publication by the FTC. It appears to identify several “bright lines” of fraud in MLMs – more product sold internally than externally, and a compensation plan calibrated to reward the recruiters over the retailers. These two practices are pervasive in the MLM field, yet, the paucity of FTC prosecutions of these practices seeminglycontradicts the content of the warning.




The Business Whose Name Dare Not Be Said


In reference to the FTC challenge for regulating MLM, the term, "bright line," may be conceptually inadequate. It infers a fundamentally legal business that crosses a line and, which, if it had stayed on one side, would continue to function legally; but stepping over this line, it suddenly becomes existentially "illegal." In the case of multi-level marketing, a bright line is conceived of as a single factor that renders the entire operation illegal, worthy of an injunction to halt its operations entirely. The bright line, is therefore, a fundamental factor that identifies the business as a fraud. To properly characterize a bright line for multi-level marketing, in which the factor is fundamental, it must be acknowledged that no line would have been “crossed”, but rather the business would be founded upon a marketing practice that is inherently illegal. The illegal MLM is a not a business engaging in fraud but a fraud engaging in business.The often-stated FTC position that determining an MLM’s illegality is intensively fact-based flies in the face of 30 years of observable and experienced reality.

Even a cursory review of MLMs reveals that hundreds of them are virtually identical, all such similar companies showing an existential requirement to relentlessly recruit, with pay plans obviously designed to motivate and reward recruiting, flaunting the “infinity” factor as a means to gain income, and producing the inevitable 99% loss rates.  The “fact-based” perspective infers the opposite of these realities, that each MLM is unique, that the factors of illegality are hidden and difficult to uncover and that the ones the FTC has prosecuted are anomalous. The reality of MLM is so glaring and its use of the endless chain to gain sales and investments is so obvious that, if there is any prospect for the FTC to identify bright lines of illegality, it will require acknowledging what is staring everyone in the face. The defining characteristic of MLM is the promise of “unlimited income potential” to each new recruit. An infinite font of income is said to be possible from an obviously finite base of money, the recruits’ own purchases and that of any customers they might have, if any. 

Consumer activist and educator, David Brear has aptly termed this proposition a “closed market swindle.” That a tiny few at the peak of the expanding chain could indeed gain large amounts of money from the transfer plan is certainly true, though even those few are not able to gain “unlimited” income. But in MLM the “unlimited potential” promise is extended to all who join, forever. Such a fundamental premise of a business proposition can only be called deceptive from the start. It is instantly revealed as a false claim. Hundreds of multi-level marketing companies openly highlight, publicly celebrate and obviously base their entire operations on the deceptive illusion of the endless chain income proposition. Surely FTC staff have attended MLM recruitment meetings and observed this plain truth. How else could a company offer ordinary cosmetics, vitamins, soap or protein shakes as a product for consumers to sell one-to-one to other consumers from their homes, without any marketing or advertising support and claim that the income opportunity is a means to achieve “total wealth”? The past position of the FTC that MLM investigations are nearly beyond the scope of the agency’s capacity or that the illegality is so hidden, even disclosures will not help a consumer, are only evidence of the failure to establish a legal standard, not of MLM reality.

The Limits of the Endless Chain

As a non-attorney, I will not attempt to present chapter and verse of the federal court rulings that 
treat the endless chain income proposition as a sufficient bright line indicator of fraud when it is 
used to solicit investments or purchases from consumers.The Commission’s own notation in the Koscot case about the endless chain’s “intolerable capacity to mislead” addresses the inherentfraudulence of the endless chain proposition. It does not require complex economic analysis to conclude that the endless chain is unsustainable as a marketing plan and, as the FTC’s Dr. Peter Vandernat has repeatedly explained in his declarations, the model, by its design, requires that the vast majority of all participants must always be in unprofitable positions at the bottom of the chain. Thus, regulators have no need to await “ultimate collapse” before recognizing the ongoing and growing harm once an endless chain is set in motion. The loss rate is mathematically predetermined, inevitable and unchangeable. The endless chain proposition, by its very nature, makes a deceptive promise – one that it cannot keep. Additionally, there is ample evidence of how the endless chain’s “intolerable capacity to mislead” produces mass manias, altered personalities and extraordinary social disruption with its utopian – and utterly false – promise of “unlimited income” potential for all. When attached to a purchase and sales scheme, the endless chain, as FTC and other state prosecutions have repeatedly shown, can rapidly enroll hundreds of thousands of hopeful and misguided consumers to pay fees and purchase goods they would normally not have acquired and at prices beyond market standards – and generate millions in ill-gotten revenue for the perpetrators. Yet, the FTC, based on its enforcement record and its citation of the 1979 Amway ruling, does not currently treat the existence of an endless chain income proposition as a sufficient “bright line”,by itself, to initiate a prosecution.

The 1979 Amway ruling appears to be the FTC’s main reason for not citing the existence of an 
endless chain proposition in MLM enterprises and the repeated manifestations of massive consumer losses among people who enroll in them as a sufficient bright line indicator of unfairness and deception. The Amway ruling complicated enforcement since it did not accept the 1975 FTC claim that Amway’s endless chain model was inherently deceptive and unsustainable, a fraud per se.

Amway’s Obsolescence

Current business practices of MLM companies, however, render that court ruling irrelevant in practice. MLM, including Amway, today operates far differently from the way Amway did in the pre-computer 1970s. The market transactions that characterized MLM practices then and which were examined in the case have changed. Thirty-five years of MLM expansion have altered popular perceptions. Much greater understanding of the place of MLM as a distinct business sector in the overall market exists today, in contrast to 1975-9, when the judge characterized Amway as an upstart competitor of the oligopolistic Procter & Gamble. Few today would characterize Amway’s $11 billion, 100 country-reach that way. Most important, the FTC faces an entirely new defense by the MLM industry that is not based on the Amway case but on new interpretations of facts. Additionally, there has been a succession of new court rulings that alter the legal landscape relative to MLM. Clarity and consensus, based on math, law, subsequent court rulings, geometry, and common sense, remain in the conviction that an endless chain incentive plan that induces investments and promises rewards is inherently deceptive and unfair. But, today, the FTC must reveal the reality of endless chain frauds in MLMs that employ today’s disguises and defenses.

The proviso in the 1979 Amway ruling was that Amway’s revenue was to be based on retail sales by the distributors to end-user consumers, making the individual Amway distributorship valuable and viable, without an existential requirement for endless chain recruiting. The pyramid structure and the pyramid-like recruiting was allowed by the court, as Amway swore under oath that it was intended, only as an efficient means of coping with normally high attrition rates in the direct selling field. Existing salespeople could recruit replacements and be compensated for that service to the company, but the endless chain incentive could not be the primary driver for distributor rewards or for company revenue.The ruling allowed the direct selling business to employ an endless chain income “opportunity” in its compensation plan, as Amway does, but prohibited it from actually using its electrifying power to alter behavior for the purpose of generating revenue or incentivizing personal purchases and recruiting activity. The lucrative fruit of profiting from the salespeople’s own investments in fees, product purchases and recruiting efforts as they pursued the mesmerizing “unlimited income” offer.That tempting deception was to be kept just out of reach, through the use of enforced “rules” that ensured the sales program was to be unwaveringly focused on conventional one-to-one retail sales and retail sales profits on Amway’s unremarkable and unadvertised products, offering modest and clearly “finite” income potential for the participants.

Maintaining such a thin wall of legality between a pyramid recruitment fraud that used the “infinite” income potential of the endless chain plan as its driver and a legal direct selling operation that included an endless chain plan, but did not utilize its extraordinary – and deceptive – power would have required close FTC monitoring. At a minimum, retail sales levels would have had to be proven by the company as well as financial data showing how many distributors gained or lost. It would have had to include full disclosure of the sources of income – retail-based or downline purchase-based – to those at the top of the chain and at other levels. The FTC would have had to ensure that the Amway business model, which it had prosecuted for four years as inherently fraudulent, would remain focused on external retail sales. As we all know, no such monitoring occurred.

New Realities and the Irrelevance of the Amway Ruling

Reconciling the Amway court decision with today’s MLM realities is, in my view, largely irrelevant and unnecessary. Similarly, application of the famous Amway “rules” of 70% reselling of inventory and maintenance of 10 customers, has become obsolete and has proven to be impossible on an industry-wide basis. Due to the enormous size and political power of MLM today and the fact that business practices on which the Amway decision was based have changed, the FTC faces a new kind of challenge and a new opportunity in its law enforcement role.

Today, few MLMs sell goods to consumers who then personally resell them to others, whether inside the channel or traditional retail customer, out of their own inventory. Today, it is more common for MLMs to drop ship the goods directly to the purchasers and credit the entire chain of recruiters with the rewards. Additionally, retail profit margins have been largely eliminated. No evidence exists of any significant retail selling in most MLMs, however, some MLMs do promote a status of “preferred customers” who are not part of the channel, yet pay the same discounted price as the distributors do. Purchases made by the “preferred customers” offer no retail profit to distributors but can modestly add to the distributors’ total “group volume” which is primarily a recruitmentdriven incentive.

“Front loading”, which for many years was seen as the main evidence of a pyramid scheme and on which the Amway decision was fixated, is also largely an obsolete notion. Today, MLMs rely on monthly purchase quotas and/or "structure" requirements or a combination of the two, driven by the utopian income dream to induce ongoing purchases and payments. To achieve the dream the participant needs to maintain a quota of volume or to have, for example, “two legs” of other recruiters “active.” The monthly personal volume is usually claimed to be a personally “consumable” or “personally usable” amount, not a base of inventory to resell.

Average annual purchases induced by MLM schemes are usually under $2-3,000 a year, if they stay in the scheme that long, which only a small minority ever do, though some may buy much more and spend far more in related costs, reaching into the tens of thousands, over time. The current practices of Nu Skin and Herbalife, for example, to offer instant high level status and significantly higher rewards based on a single, large, up-front, personal purchase of product is actually unusual today. Today, MLMs find ways other than up-front inventory loading to get more money from participants, including training, certification, “back office”, website maintenance, sales of “leads,”“motivation” seminar registrations, renewal fees, etc. All of these are variations on how to manipulate the endless chain offer or on the various disguises to conceal its operation and inevitable outcome.

Many of the MLMs are based on the claim of  no one selling anything to anyone, just “buying from your own store and finding others to do the same.” Some sell no tangible product, but rather services offered by other companies, such as the utility and energy MLM schemes do. Others require several personal “customers”, for example, to reach the income chain options for income, but the customers can be retail clients or other salespeople. The “customer” quota does not produce retail profitability for distributors but does subvert an aggregate economic analysis of total revenue coming from inside or outside the chain as a basis for determining a “pyramid scheme.” The requirement of a small number of retail customers merely serves to add disguise and to increase the pay-to-play investment of each new participant. In sum, applying Amway “rules” to the modern MLM is impractical in many cases.

Finally, the claim of unsustainability leading to ultimate collapse, which the FTC made in its 1975 case brought against Amway must also be reconsidered after 35 years experience. In 1979, the court ignored cumulative growth and considered only the potential for “total collapse”, which appeared implausible, thereby refuting the FTC’s projections. In 2000, I recalculated Amway’s recruiting totals, using Amway’s data. Data showed that approximately 6 million people had by then signed contracts as Amway salespeople in the USA alone, or about 1 out of every 33 members of the present adult population at that time. Today the number would far larger.Virtually all had quit, after suffering financial losses. As long as today’s endless chain schemes can successfully replace the inevitable losers, euphemistically called “dropouts” though they are doomed from the start, the scheme can endure for many years, leaving a massive trail of consumer losses in its wake. The ability to jump to international markets also salvages the domestic MLM, which should be properly termed in a state of “continuous collapse,” and can create the false impression to new recruits of domestic sustainability. Saturation of the market for new recruits to be able to build downlines is the dooming scenario for new recruits, not imminent collapse. For the losing consumer, however, the result is the same as if the scheme had collapsed like a Ponzi would – loss of money, time and other opportunity costs.


The New Legal Defense of MLM

MLMs themselves no longer argue that the endless chain is legal and non-deceptive due to its focus on external retail sales, as Amway did in its famous case. The Amway “legal defense” is a relic from the past. Instead, Amway itself now claims that the endless chain plan is merely a referral system for “customers.” Instead of claiming the distributors are not affected by the “infinite income” incentive due to their personal retail focus as resellers, which is company-enforced by “rules,”Amway and most other MLMs now claim most distributors are unaffected by the infinite income potential because they only want to buy the product as customers and not to earn any money at all. The rules requiring reselling of goods, therefore, are irrelevant. Everyone is claimed to be a customer.

This amazing and perplexing change of explanation essentially argues that internal purchases, 
which the FTC and the federal courts (see the FTC brochure referenced earlier and the Omnitrition decision by the federal court) have treated as the bright line of endless chain fraud, are no longer a valid indicator. Indeed, internal sales are now claimed to be the proof of the system’s legitimacy as a sales business, since the purchases by the distributors, it is claimed, indicate ordinary, market-based, rational purchasing behavior that is unrelated to and unaffected by the endless chain pay plan incentives. The MLM legal argument for why MLM people are not affected by the “endless chain” when they make purchases or pay fees in MLMs has changed from their true activity, previously said to be retail sales, to their true motives, now said to be their love of the MLM product. In both defenses, it is claimed that the endless chain with its illusory promise of rewards is not an incentivizing factor leading to investments and recruitment activity.

The tactical legal and economic defense strategy, in turn, has shifted from the old maneuvers of
withholding retail sales data and distributor loss rates to challenging regulators to prove that the 
inner motives of participants are related to the illusory income proposition. This would be a taseven more daunting that overseeing retail sales levels, perhaps requiring an army of psychologists!

Observers are told not to believe what they see with their own eyes – that an endless chain 
proposition is the heart and soul of the enterprise and drives consumer responses.
Additionally, whereas MLM previously obscured the extraordinary fact that 99% or more of all 
distributors never gained a profit, today those very same figures are touted as evidence that virtuallyall distributors have no interest at all in the endless chain plan’s rewards. The evidence for this claim is that few actually gained any income! Consumer losses are no longer hidden; they areredefined out of existence on the claim that millions joined with absolutely no interest in making any money in the first place, despite the MLM’s promotional images of luxury cars, exotic vacations, testimonials about high incomes, “freedom” and fulfillment, all gained from the MLM income opportunity.

The new legal defense makes the audacious claim that as many as 75%  or more of all people 
who join some MLMs never intended to pursue the “business opportunity” but were only interested in obtaining the products for personal use and therefore cannot be considered business opportunity victims. Proof that they were not pursuing the business is that they never successfully recruited other participants! The “unsustainable” or saturation arguments are not refuted but averted by this remarkable ploy.

As incredible as it might seem to some analysts, this MLM claim that all purchases by contract 
salespeople are purely product-based, not income-driven or influenced by the endless chain offer is bolstered by the stark fact that the MLMs that produce the largest consumer losses have never been prosecuted. The new rationalization of loss rates, the sheer size and persistence of MLMs, and the lack of any significant regulatory actions for 35 years are powerfully affecting popular perceptions. It is becoming almost unthinkable, even for judges, that such large and longstanding enterprises could be illegal rackets.

The factor of “plausible deniability” for MLM participants is also enhanced in the environment 
of MLM rationalizations and general immunity from regulators. All pyramid participants need a 
rationalization. The naked facts of seeking income from commercializing friends and neighbors into “warm list” prospects and the pursuit of a get-rich scheme based on exponential recruiting must be ameliorated by less selfish and more uplifting narratives. The specter of illegality and the term “pyramid scheme” must also be firmly banished in order for the participants to actively promote the plan to close associates. It must be acknowledged that today’s MLM environment is characterized by greater public confusion, more entrenched denial and even greater reluctance to come forward with fraud accusations than ever before.
                                                    
Such is the whirlwind that the FTC is reaping for allowing pyramid schemes to imbed 
themselves into the legitimate marketplace in the thin disguise of “direct selling.”


The New Realities


To summarize the new conditions faced by the FTC:


  • With millions of consumers placed in vulnerable positions as targets of ubiquitous financial solicitations from MLM promoters and billions in market securities placed at risk due to the lack of a legal standard for MLM, the FTC must finally establish a set of conditions which, if present, identify a fraudulent MLM operation. These conditions must be generally understandable for consumers as well as standing on sound legal and economic ground. The current position, lacking a legal standard, is untenable and violates the mandate of the FTC as a law enforcement agency, negates its roles in consumer protection and public education, and damages the FTC’s credibility.

  • The reliance on the Amway decision that tied rewards to undisclosed or unrecorded retail sales and on which the FTC used a complex “economic” rather than a primarily legal argument to identify MLM frauds is largely unusable under current conditions. It also is unusable for public understanding and education. As experience has shown, it also severely limits the FTC’s enforcement abilities since it was based on a long and costly one-off, fact-based system, of prosecutions seemingly unrelated to all other MLMs and lacking a clear legal foundation.

  • The MLM industry which previously claimed that MLM purchases were primarily for resale has now sought to make the very act of purchasing an MLM product or service by an MLM participant prima facie evidence of legitimacy, that is, the very act of the participants’ making product purchases exempts the enterprise from any definition of pyramid fraud. Buying a product is treated as exculpatory for the enterprise, regardless of all other factors of pyramid structure and recruiting inducements, rewards to recruiters, payment formulas or financial loss and dropout rates among participants.


  • Recent court decisions, such as Burnlounge, which have shifted the defining issues away from hidden, indefinable or incalculable factors such as retail sales versus internal sales levels and toward the fundamental purpose of the reward plan – in practice. Rather than an economic formula requiring extensive data collection, the FTC could identify a set of characteristics, which, in combination, define an endless chain/recruitment-driven business opportunity schemethat is inherently unfair and deceptive, based on its defining elements.

  • The latest court rulings appear to offer the FTC greater capacity to focus on the obvious pyramidstructural requirements and the transparent recruiting-based pay formulas of a MLM along with the verifiable aggregate expenditures and rewards gained by participants, indicating nearly total losses among the “last ones in” to serve as a set of guidelines for legality.

  • The endless chain income lure and the practice of a recruiting-based marketing program remainthe fundamental elements of fraud to be identified and exposed in MLM frauds. The courts have upheld the inherent fraudulence of an endless chain reward plan. It must be the centerpiece of the establishment of bright lines. It is the fraud in plain sight.


Bright Lines

In response to the specific question posed to me and my colleagues during the June 9 conference call, I offer the following approach to bright line factors:


  • The first principle of a bright line for legality in multi-level marketing is that the endless chain is an unfair and deceptive marketing practice. The bright line, therefore, consists of uncovering evidence of the actual use of the endless chain proposition to gain revenue from MLM participants. This is the primary indicator of deceptive marketing. Gaining purchases or investments from consumers on the basis of an endless chain reward proposition – offering rewards based on recruiting others who are similarly offered rewards to recruit others; basing the potential rewards on infinite, exponential expansion; providing escalating rewards based on recruiting scales; providing no physical, mathematical or geographical limits related to actual market demands and potential – is deemed an unfair and deceptive trade practice.


  • The establishment of a bright line requires that the FTC take a strong and clearly stated legalstand against the unsupportable and preposterous claims of MLM that purchasing products by the participants automatically exempts the enterprise from a pyramid definition (in the same way that gifting clubs adherents claimed that the money transfers self-defined as “gifts”, made thoseschemes legal). The MLM argument that when products are purchased by MLM participants, the law against endless chains does not apply must be directly and unequivocally refuted, based on law.

  •  FTC establishes and publishes a set of factors that it considers indicative of the use of the endless chain as a marketing device, once it is established that it exists in the business model.

  • The evidence of the use of endless chain marketing is found in the MLM’s pay formula and in the statement of policies and procedures, both of which are generally published. Additional information may be found in income disclosure documents, website, webinars and in SEC filings. Among the red flag factors for the actual use of the endless chain proposition are:


1. There is no status of salesperson that is not allowed to recruit other salespeople but can only sell the products to retail customers (virtually all MLMs include the universal recruitment authorization though some offer no rewards from recruiting until some threshold of recruiting or a volume of sales/self-purchasing is reached); the sales chain is designed as an open-ended expansion structure, without limit, and without geographic restriction; and each new participant, upon payment of consideration, is authorized to seek profit from extending it.(existence of endless chain system established).

 2. Sales/purchase quotas with specific dollar volumes of product purchases (either by the distributor personally or some group of distributors in his or her downline), or structural requirements based on recruiting specific numbers of other distributors or in some specific configuration, are required to maintain a position on the recruiting chain. (endless chain investment and recruiting inducements)

3. Compensation formula that rewards, overwhelmingly, chain extension activity over personal retail sales activity that is based on market demand. Evidence would include the formula that allocates total commission payout to recruiters in excess of total retail profits that arverifiable, showing the focus and reliance upon the recruiting incentives, and in the actual payout,revealing concentration of payments to those at the upper end of the recruiting chain. (more endless chain and recruiting inducements)

4. The actual activity of the business is characterized by relentless recruiting, churning and transferring funds from later participants to earlier ones.

5. Little evidence, gained from an examination of marketing materials, website, and anecdotal reports from participants or researchers, of market-based retail purchasing or little evidence of retail profit-making among the sales force and no significant actions by the company to ensure the salespeople are retailing or to support retail selling (indicating little market demand, absent the endless chain pay plan incentives, and little direction from the company toward retailing)

6. Evidence of large-scale losses, (indicating the inevitable mathematical consequences of a recruitment-based reward plan).


Reforms

How could an MLM take corrective measures that would bring it back on the legal side of the “bright line” or prevent an FTC investigation or prosecution? Just as the basis for a legal standard is the use of the endless chain to gain purchases or investments, reforms would be measured by that same standard, showing that consumer purchases or other investments in the business opportunity are not affected by the inherently deceptive “infinity” factor but are market based, indicating public demand, preference and enduring brand loyalty, the conventional measures of market validity.

Some that would repurpose an MLM toward direct selling and away from pyramid recruiting include:


  • Limiting the number of levels that any individual salesperson can personally recruit and gain override commissions to one or several. This criteria would satisfy Amway’s earlier claim that the primary purpose of the universal recruiting authorization was to economically offset the normally high attrition rates in direct selling by offering modest compensation to distributors for taking on the recruiting function, rather than the company’s engaging in a costly recruiting program. This measure would eliminate the infinity factor entirely.

  • Pay commissions only on consummated retail sales, that is to persons who are not signers of the company’s sales contract and are not eligible for recruiting-based rewards. The corollary is that no commissions are paid on any purchases made by other salespeople or on the salesperson’s own account. This reform eliminates a major incentive for recruiting and for making personal purchases. It eliminates the conflict of interest inherent in profiting from the person the recruiter is supposed to be managing by promoting personal purchases. It would also clearly indicate that all purchases made by the sales force are market-based and not affected by the recruiting program, since no one in the chain would profit from another’s purchases and would have no cause to influence their personal purchases. It would also eliminate the ability of the MLM company to offer instant high status to a new recruit for making a large upfront personal purchase that generates a large commission to the recruiter.

  • Eliminate all purchase/sales volume or recruiting requirements in order to maintain sales and recruiting authorization. With no geographic limitations or protections placed on MLM salespeople, and no information available on market saturation factors, these volume and recruiting requirements, which are common in MLM pay plans, are unwarranted and serve only as compelling recruiting inducements. The quotas are also responsible for a critical factor in MLM pay plans, called “breakage,” in which the inevitable failure among participants at lower levels to meet the impossible quotas (due to saturation) results in all their accumulated andaccruing rewards being transferred to recruiters at the higher levels. Along with other pay formulas that offer higher commission rates – per transaction – to those at the higher ranks, the quota/breakage factors serve to sharply concentrate total commission at the top, facilitating the continuous bottom-to-top transfer. As the data from my earlier memo documented, this quota/breakage system is responsible, for example, for Nu Skin’s paying 82% of all its commissions to the top 1.29% of its “active” sales force, which is 0.5% of the entire network. This tiny group at the top of the pyramid gains $103,000 on average in rewards yearly, while the mean average for the bottom 99% of the “active” sector is only $300 per year.

  • Establish limited territories for distributors who want to develop sales teams with authorization based upon management selection. The current practice of open-ended, even global territories and escalation on the sales chain being based purely on volume/recruiting performance is a telltale indicator of the “endless chain” inducement.


The FTC’s Challenge

It is not an exaggeration to say that the whole world is watching the FTC regarding its mandate to develop a legal standard for multi-level marketing. Billions of dollars in securities, and billions of dollars of household savings and credit are the financial stakes, but perhaps even greater than the financial resources is the societal impact of endless chain fraud upon communities, families, and entire countries.

It is well understood that the Ponzi scheme is a dangerous form of fraud, capable of destroying entire economies and toppling governments, as occurred in Albania. The pyramid scheme or endless chain-business scheme may be similarly viewed as an insidious financial virus, threatening the foundation of a legitimate market, subverting legitimate entrepreneurship, harming extraordinary numbers of vulnerable people and destroying trust in the American Dream.

The Ponzi scheme relies on concealment of its money transfer, while the pyramid, more dangerously, relies on mass deception and political influence-buying to prevent law enforcement. The Ponzi is based on one big lie, whereas the pyramid must cultivate an intricate web of lies. The Ponzi perpetrator personally assumes the nefarious role of perpetrator and organizer, while the pyramid promoters entangle the victims in a network of legal liabilities and personal deceptions to spread to family and close associates. And whereas the Ponzi enables all its victims to grasp the nature of the fraud once it is revealed and to identify themselves as innocent victims, the pyramid must engage in mind control, cultivate a predatory value system among participants and subject the victims to a debilitating narrative of self-blame, leaving many unaware of how or why they lost their money and destined to repeat the folly. 

The Ponzi scheme may mushroom in scale but quickly and totally collapses upon exposure or prosecution. The pyramid scheme, on the other hand, can mobilize its very own victims in cult formations to expand its reach, attack whistle-blowers and protect itself from law enforcement, even when exposed. It can, therefore, be reasonably argued that the pyramid scheme is a far more destructive force in a society than the Ponzi is. It contains elements of cultism, mind-control, authoritarianism, political corruption and social disruption. It is obvious that that law has not kept pace with the development of endless chain rackets disguised as direct selling enterprises. Yet, in recent years, public interest advocates, attorneys, financial managers, academics and thousands of victims have come forward to expose the realities of MLM and to demand that the FTC finally enforce the laws that are available and applicable.

My own expectations mirror the aspirations of millions of other people that the FTC will seize 
this moment in history to do the right thing.



Robert FitzPatrick (copyright 2014)



'Herbalife (HLF)' - Bill Ackman hoists battle ensigns, but has the American Republic run up the white flag?

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Tuesday the July 22nd, I sat and watched Bill Ackman's much-hyped webcast. This had been presented as being the 'latest nail in Herbalife's coffin.'Indeed, the price of effectively valueless 'Herbalife'shares had dropped more than 10% in the run up to this event. However, whilst Bill Ackman was still speaking, this price began to climb steeply. Whilst, at the beginning of the webcast, at least 10 000 persons were watching.





http://www.dailymail.co.uk/news/article-2701625/Mysterious-white-flags-appear-atop-Brooklyn-Bridge.html




http://money.msn.com/business-news/article.aspx?feed=OBR&date=20140723&id=17795364



With an irony close to exquisite, on a day when white flags temporarily replaced the Stars and Stripes which usually flutter at either end of the Brooklyn Bridge, an unusually emotional Bill Ackman again hoisted battle ensigns and attempted to lead an investor-charge against the 'Herbalife'racketeers. In reality, all Bill Ackman succeeded in doing was to prove that Wall St. is largely a morality-free zone, and that US federal government agencies should have long-since run up white flags on their own buildings. 

Apart from the results of a rigorous, private investigation into what actually happens behind the seedy, green-draped fronts of so-called 'Herbalife Nutrition Clubs,' Mr. Ackman's latest presentation brought nothing original to the dismantling of the blame-the- victim 'MLM Income Opportunity'racket entitled 'Herbalife.'  Indeed, the reality-inverting sections of the 'Herbalife'labyrinth he invited his audience to enter, and examine, have already been rigorously explored on 'MLM The American Dream Made Nightmare.'

In summary, in his webcast, Mr. Ackman courageously explained how:


  •  'Herbalife' is an elaborately disguised pyramid scheme which has previously targeted the middle classes, but which is now going after the poor in the USA; particularly, from the Latino community.
  • 'Herbalife' has used a shifty labyrinth of apparently independent corporate structures to sell the American Dream to vulnerable people who (like his own Eastern European Jewish immigrant ancestors) desperately need to believe that it is true.
  • there have been virtually no authentic retail sales to the public taking place within the so-called 'Herbalife MLM Income opportunity.'
  • what have appeared (to casual observers) to be retail sales to the public (regularly being conducted in so-called 'Herbalife Nutrition Clubs' ), have merely been part of a self-perpetuating charade acted out as reality by a never-ending chain of obedient 'Herbalife' adherents, in the false expectation of future reward. 
  • 'Herbalife'adherents/victims have been subjected to social and psychological persuasion techniques - designed to get them to believe that failure to make money was entirely their own fault.
  • 'Herbalife'is an example of the totalitarian/ Nazi propaganda technique known as 'the big lie.'
  • 'Herbalife' has co-opted ill-informed celebrities and opinion-makers, like David Beckham and Madeleine Albright, to make its criminal enterprise appear to be entirely legitimate.

It's difficult to believe that it has taken Mr. Ackman more than 18 months and 50 millions dollars, to arrive at this level of understanding of the evolving, criminogenic cult phenomenon. 

That said (to Bill Ackman's credit), he has evidently been trying very hard to understand.





Unfortunately, Bill Ackman has not yet acknowledged that more than half a century of quantifiable evidence, proves beyond all reasonable doubt that what has become popularly known as 'Multi-Level Marketing,' is nothing more than an absurd, cultic, economic pseudo-science, and that the impressive-sounding made-up term 'MLM,' is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organized crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim closed-market swindles or pyramid scams (dressed up as 'legitimate direct selling income opportunites'), and related advance-fee frauds (dressed up as 'legitimate training and motivation, self-betterment, programs, leads,' etc.).




David Brear (copyright 2014)






'Amway' racketeer, William Pinckney, released on bail, after two months inside.

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http://economictimes.indiatimes.com/news/politics-and-nation/amway-india-md-ceo-william-pinckney-released-on-bail/articleshow/39170372.cms


According to 'Amway's'reality-inverting propaganda, the poor little CEO of 'Amway India,' Wiliam Pinckney, was arrested two months ago, and forced to remain in jail until yesterday, because certain ill-informed senior Indian police officers wrongly applied a criminal law defining, and banning, pyramid schemes (no matter how they are disguised) to Multi-Level Marketing.

Unfortunately for the'Amway'racketeers, the Indian police officers in question, are fully-aware that more than half a century of quantifiable evidence, proves beyond all reasonable doubt that what has become popularly known as 'Multi-Level Marketing' is nothing more than an absurd, cultic, economic pseudo-science, and that the impressive-sounding made-up term 'MLM,' is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organized crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim closed-market swindles or pyramid scams (dressed up as 'legitimate direct selling income opportunites'), and related advance-fee frauds (dressed up as 'legitimate training and motivation, self-betterment, programs,' etc.).


The recent efforts of members of the De Vos and Van Andel crime families to tamper with Indian legislation, and law enforcement, forms part of an overall pattern on ongoing, major racketeering activity which can be traced back to the 1950s.


David Brear (copyright 2014)

'Herbalife (HLF)' - Bill Ackman begins to throw some light on the big 'MLM' lie.

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Last week, Bill Ackman announced that his company, Pershing Square Capital, has (during  the last 2 years) invested $50 millions researching, investigating and challenging  'Herbalife.' 








During his most-recent public presentation, an (at times) emotional Bill Ackman took a step further into my territory and openly-described 'Herbalife' as a 'criminal enterprise' and the company's CEO, Michael Johnson, as a 'predator.' He also briefly spoke of 'Herbalife's'so-called 'MLM income opportunity' as being an example of a propaganda technique used by the 'Nazis' and totalitarian regimes, known as the 'big lie.' At one point during the presentation, Bill Ackman’s was asked if his language was inviting a lawsuit. The questioner observed that a lawsuit would oblige'Herbalife' to disclose internal documents. In response, Bill Ackman smiled. 'Sure, that’d be great,' he said, 'bring it on.'







Bill Ackman's investigation (led by Christine Richard and assisted by victims and whistle- blowers) has now gathered evidence proving that, internally, 'Herbalife's'so-called'Nutrition Clubs'are not at all what they have appeared to be to casual observers (including : law enforcement agents, regulators, financial journalists, investors, insurers, bankers, accountants, co-opted-celebrities, opinion-makers, etc.).





So-called 'Herbalife Nutrition Clubs' have been part of the self-perpetuating, blame-the-victim cultic game of make-believe known as 'MLM income opportunity.'  In the most simple terms: Pershing's undercover investigators have discovered that the only significant group of people regularly to have bought the banal, and over-priced, pseudo-medical 'Herbalife' wampum, have been a never ending-chain of losing-participants in the so-called'Herbalife MLM income opportunity.' Furthermore, these persons have been deceived into handing over their money in the false expectation of future reward.





Bill Ackman apparently still has faith in the American Republic. He sees himself as a product of the American Dream.


For obvious reasons, Bill Ackman is the first well-known, and wealthy, opinion-maker to look beyond the end of his nose and confront the extraordinary reality that the bosses of kitsch, US-based, major organized crime groups, like'Herbalife,' have been world-class liars, and unfeeling parasites, who have amassed vast capital sums by reflecting the spirit of our age - peddling a Utopian Capitalist fiction (in the form of a perverted version of the American Dream) as fact. Yet despite his moral courage, education, wealth and celebrity, Bill Ackman has (so far) only pointed a flashlight at one part of the latest section of a much wider, evolving, criminogenic phenomenon which various other intellectually-rigorous observers have shone powerful searchlights on, in the past.



In 1945, whilst most, contemporary mainstream commentators were unable to look beyond the ends of their noses, with a perfect sense of irony, Eric Arthur Blair a.k.a. George Orwell (1903-1950) presented fact as fiction in an insightful 'fairy story' entitled, 'Animal Farm.' He revealed that totalitarianism is merely the oppressors' fiction mistaken for fact by the oppressed.




In the same universal allegory, Orwell described how, at a time of vulnerability, almost any people's dream of a future, secure, Utopian existence can be hung over the entrance to a totalitarian deception. Indeed, the words that are always banished by totalitarian deceivers are, 'totalitarian' and 'deception.'




Sadly, when it comes to examining the same enduring phenomenon, albeit with an ephemeral 'Capitalist' label, most contemporary, mainstream commentators have again been unable to look further than the ends of their noses. However, if they followed Orwell's example, and did some serious thinking, this is the reality-inverting nightmare they would find.




More than half a century of quantifiable evidence, proves beyond all reasonable doubt that what has become popularly known as 'Multi-Level Marketing' is nothing more than an absurd, cultic, economic pseudo-science, and that the impressive-sounding made-up term 'MLM,' is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organized crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim closed-market swindles or pyramid scams (dressed up as 'legitimate direct selling income opportunites'), and related advance-fee frauds (dressed up as 'legitimate training and motivation, self-betterment, programs, leads,' etc.).
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Yet again, in the wake of Bill Ackman's recent presentation, I have been asked:
  • How many victims have wasted their time and money in 'Multi-Level Marketing' scams?
  • Why do so few 'MLM' victims ever complain?
The short answer to these frequently-asked questions, is that the overwhelming majority of all the countless millions of victims who continue to get burned by individual 'MLM Income Opportunity/Prosperity Gospel' cults, will remain silent and continue (unconsciously) to form part of the overall lie: whilst, as a direct result of the passivity of the overwhelming majority of the victims, all casual observers of individual 'MLM income opportunity/Prosperity Gospel' cults (including, law enforcement agents, regulators, academics, legislators, judges, journalists, insurers, bankers, accountants, associated celebrities, etc.) will also remain passive and continue (unconsciously) to form part of the overall lie.

Today, it is very difficult to determine exactly how many people in total around the world have already been churned through the pay-through-the-nose-to-play 'MLM Income Opportunity/Prosperity Gospel' cultic game of make-believe, since it was first peddled as reality under the name of 'Nutrilite Inc. /Mytinger and Casselberry Inc.' back in the late 1940s. It is also important to distinguish between short-term and chronic 'MLM' losing-players. In general, the overwhelming majority of fraud victims never complain, but, right from the outset, the self-perpetuating 'MLM' lie was maliciously designed to implicate its victims - loading them with shame and guilt, and, thus, prevent them from ever facing reality. Classically, the quantifiable evidence proves that, without exception, chronic 'MLM' losing-players have been subjected to co-ordinated devious techniques of social, and psychological, persuasion designed to shut down their critical, and evaluative, faculties. In this way, they have been conditioned (unconsciously) to think of themselves, not as the victims of a cruel deception or as brainwashed cult adherents, but as 'Independent Business Owners' exercising free-will.  What has made external reality even more unacceptable, is the ego-destroying fact that a large proportion of 'MLM' victims were deceived by a close friend or relative (acting under the guided-delusion that 'MLM' has been of great benefit to its participants) and, in turn, these victims then deceived, or tried to deceive, their own close friends and relatives (acting under the same guided-delusion that 'MLM' has been of great benefit to its participants). The few, destitute, chronic former 'MLM' losing-players who have managed to recover fully their critical, and evaluative faculties, and who have filed well-informed civil lawsuits against the corporate fronts of 'MLM' cultic racketeers, have invariably been obliged to settle out of court. Although a number of isolated civil investigations, and successful prosecutions, have been pursued by the Federal Trade Commission against some smaller 'MLM' front-companies in the USA, no co-ordinated official effort has ever been made to face wider-reality and identify, let alone tackle, the overall criminogenic/cultic phenomenon that has lurked behind all the shielding layers of structural, and pseudo-economic/scientific, mystification, reality-inverting 'direct selling/commercial'  jargon and kitsch capitalist/Utopian/American Dream imagery.

  




Until the 1970s, the original 'MLM Income Opportunity/Prosperity Gospel' cultic racket  'Nutrilite' a.k.a.'Amway,' remained confined to the USA. In the face of a prolonged (but far-from morally, or intellectually, rigorous) FTC investigation, the 'Amway/MLM' lie first spread to Canada, then to W. Europe and Australia. However, in 1979, when a corrupt, and/or naive, US federal judge failed to identify 'Amway' as the corporate-front for an ongoing, major, organized crime group, this classic regulatory-failure was widely-seen as a license to steal. Since that time, countless US-based copy-cat rackets have been instigated behind labyrinths of legally-registered corporate structures pursuing lawful, and/or unlawful, enterprises - a significant number of which ('Forever Living Products', 'Herbalife', 'USANA', 'Nu Skin', 'Xango' etc.),  have been allowed to grow out of control and to infiltrate traditional culture all around the globe, accompanied by a distracting flock of co-opted political, academic and celebrity stooges, and shielded by a parallel labyrinth of legally-registered corporate structures known as, 'Direct Selling Associations.'





In the past, various casual observers have thrown up their hands in horror when I have dared to say that, given its duration, scale and devastating impact on huge numbers of vulnerable persons,  blame-the-victim 'MLM Income Opportunity/Prosperity Gospel' cultic racketeering is an ongoing financial, and psychological, holocaust (with a small 'h') of which many people have been in denial. Sadly, the essentially-absurd fairy story entitled 'MLM income opportunity' has been allowed to expand to such titanic proportions, that the truth has long-since become almost unthinkable. However, since the concept of the big propaganda lie, is widely-understood, it seems almost inconceivable that the directors of law enforcement, and intelligence, agencies around the world have also remained unable to look beyond the ends of their noses and identify what the bosses of 'MLM/Prosperity Gospel' cults have actually been doing. 


The following sinister quote has often been attributed to one of history's most-sinister criminals, Joseph Goebbels: 





'If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.'
Given its content, it is supremely ironic that there is no evidence for Goebbels ever having made the above statement. That said, it is a very accurate description of Goebbels' reality-inverting activities as Adolf Hitler's propaganda chief. Indeed, before his cowardly suicide in the face of reality, Goebbels spent the last years of his life steadfastly pretending that the heroic and enlightened leader of the 'Noble Aryan Master Race,' Adolf Hitler, was telling the truth, whilst the leaders of Britain and the USA (controlled by the forces of evil - Jews and Freemasons) were repeating big propaganda lies.

The origin of the first part of the above Goebbels statement would appear to have been a psychological profile of Adolf Hitler, compiled in the USA during WWII by the 'Office of Strategic Services,' later to become known as the 'CIA.' This document concluded that : 

'His (Hitler's) primary rules were: 
never allow the public to cool off; 
never admit a fault or wrong; 
never concede that there may be some good in your enemy;
never leave room for alternatives;
never accept blame; 
concentrate on one enemy at a time and blame him for everything that goes wrong; 
people will believe a big lie sooner than a little one and if you repeat it frequently enough people will sooner or later believe it.' 

Hitler's psychological profile was drafted (prior to the full-extent of his crimes against humanity being discovered) by a team of medically-qualified academics who had apparently been studying 'Mein Kampf,' Chapter 10:

 '... in the big lie there is always a certain force of credibility; because the broad mass of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly outrageous lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying.' 





Despite appearances, Hitler was not confessing to being a liar in Chapter 10 of 'Mein Kampf.' This was merely a typically-mediocre little narcissist (who imagined himself to be a great author/thinker - the anointed-Messiah/saviour of his people) revealing his extraordinary knowledge of how to lie successfully whilst steadfastly pretending to be struggling to establish the truth against the reality-inverting forces of evil. Hitler would soon transform into a megalomaniacal psychopath. The unconditional deference of his deluded followers only served to confirm, and magnify, his own increasingly-paranoid, and self-righteous, delusions of grandeur.


David Brear (copyright 2014)






'Herbalife (HLF)' company officers denied litigation insurance.

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http://blogs.wsj.com/moneybeat/2014/07/30/hartford-executive-dismissed-for-comments-on-herbalife/

Today it has been reported that a company officer of 'Hartford Financial Services Group,' William Kelly Jnr., has lost his job for disclosing that he and his former employers have refused to sell litigation insurance to the company officers of 'Herbalife.'

Certain paople at 'Hartford's' have evidently worked out that anyone involved with'Herbalife' is an extremely bad risk, but any insurance company which has previously sold litigation insurance to any company officer(s) of any corporate structure peddling a so-called 'MLM income opportunity,' has quite obviously been misled.


An anonymous reader has asked me: What do I think this means?


Anonymous - First of all, the modern insurance industry has often been compared to bookmaking, because insurance companies have been able to offload their own risk through the buying of re-insurance. Independent bookmakers follow essentially the same procedure - laying off large bets that they have accepted, and which they judge they will probably have to pay out on, with other bookmakers.





To put this into context, imagine a gang of'Mafia' wise-guys pretending to be innocent and respectable businessmen / philanthropists, trying to buy insurance against the risk that they might be charged with racketeering and put on trial. No well-informed, law-abiding insurance company, or underwriter, would voluntarily agree to sell litigation insurance to such a toxic gang, because the inevitable legal fees the final insurers would have to pay out, would far outweigh the price of any policy. 

In simple terms, the odds on'Herbalife's'bosses getting sued/prosecuted, have shortened to the point where this eventuality has now become a racing-certainty. Thus, certain persons at the 'Hartford' insurance company (and its underwriters) have evidently looked hard at the evidence collected by 'Pershing Square Capital,' applied common-sense, and concluded that the corporate officers of 'Herbalife' have been committing fraud on an industrial scale and, therefore, they can be personally held to account by an almost unimaginable number of individual victims and government agencies around the world. Consequently, the bosses of the'Herbalife' racket have been denied litigation insurance in the USA by 'Hartford,' and this key intelligence has managed to escape into the public domain. 

This means that 'Herbalife' has been recognized as toxic by responsible persons working in least one major (traditional) financial industry.

It also means that the bosses of 'Herbalife'and other 'MLM' racketeers have lied through their teeth to insurers for decades about the real nature of their criminal enterprise, in order to obtain litigation insurance.

Self-evidently, these shameful matters form yet another part of an overall pattern of ongoing, major, racketeering activity as defined by the US federal Racketeer Influenced and Corrupt Organizations Act, 1970.



David Brear (copyright 2014)
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