| New Internet Radio Show Focuses on "Main Street" Ponzis and Pyramid Schemes
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~  At the end of 2009, yet one more medium -- internet radio -- is now being utilized for telling the truth about America's largest consumer scam - multi-level marketing and on-line Ponzi scams.
Pyramid Scheme Alert has launched a 12-part syndicated internet radio documentary focused on "Main Street" Ponzis, such as multi-level marketing, aka MLM, network marketing, direct selling. The series also exposes "cash gifting" schemes, and other "business opportunity" scams.
In recent years, light has finally come to Wall Street's frauds but Main Street's remain in operation, disguised as upstanding enterprises. This was also the case for America's largest corporate criminal, Enron, and Wall Street's largest fraudster, Bernard Madoff. They too operated "legally" for decades.
The radio series, Pyramids and Ponzis, is hosted by PSA President, Robert L. FitzPatrick. The show runs on the Media on Tap Network. The first show explores the pervasiveness of fraud in multi-level markerting from the misleading initial introductions to deceptive recruitment tactics, to the promotions of bogus "success tools." It features an extensive interview with famed Amway whistle-blower and fraud expert, Eric Scheibler, author of the book, Merchants of Deception.
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Amway Watch, 2009: The Pyramid Is Crumbling
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Thirty years ago, Amway narrowly escaped an FTC prosecution to shut it down for pyramid fraud. Since then, it has been a rogue corporation on a global rampage, fleecing tens of millions with its hallmark "endless chain" income promise. Amway is the largest multi-level marketing (MLM) scheme in the world, and the prototype of nearly all the others. Signs compellingly point toward its end time and threaten the future of all other "endless chain" fraudsters.
In the latest developments, the publication of Eric Scheibeler's first-person account of business opportunity fraud at Amway, Merchants of Deception, has prompted Pyramid Scheme Alert to ask the Direct Selling Association to investigate its largest member. The DSA has referred the request to its "Code of Ethics Administrator" who in turn wrote that he has referred it to Amway's own "Code of Ethics Administrator."
Referencing the material in Merchants of Deception, Pyramid Scheme Alert also asked the US Attorney General, Eric Holder, to open an investigation.
Some highlights of Amway's long rap sheet are summarized:
- Amway received a huge fine for tax fraud in Canada, the largest ever levied at that time.
- CBS 60 Minutes and NBC Dateline have done devastating exposés of Amway-related deception in recruitment and income promises.
- One state in India has brought criminal fraud charges against Amway.
- Prosecutors in England came within a hair of driving Amway out of the UK. A judge decided to allow it to continue to operate, but he imposed two fatal restrictions on it: lowered prices and no more "tools" business. Price gouging and foisting phony "motivation" CDs and seminars on new recruits to fund the "Top Guns" are pillars of Amway's model.
- In the USA, Amway was prosecuted by the state of Wisconsin that found that 99% of all distributors were losing money. This is exactly the same loss rate the UK officials calculated that English consumers suffered every year for 30 years!
- In North America today Amway is the target of large class action cases brought by distributors in the US, charging that Amway is a fraud. A second similar case has been brought in Canada.
- Despite threats and lawsuits, consumers have published multiple websites detailing deception, false income claims, bogus testimonials, and massive consumer losses.
- Amway's extensive political lobbying and influence-buying, especially its close ties to the Bush Administration, and the conflicts of interest with FTC officials have been exposed.
- Amway is in multiple litigations to stop its distributors from moving to other MLMs. The MLM scheme, Monavie, has pulled away thousands of former Amway distributors, including a number of top gun recruiters.
- Some of Amway's former "top gun" distributors have gone public and admitted in court cases that Amway is an illegal pyramid scheme, with a near 100% dropout rate, and that less than 5% of its products are ever retailed. This means that Amway's profits come directly and almost totally from the lost investments of the salespeople, not from sales to the public. They also admit that the high incomes and lavish lifestyles of the upline that are paraded in front of new recruits to demonstrate that Amway "works" are in fact a fraud. The money actually comes from selling the recruits "motivation and training" tools, not from earning commissions on Amway sales.
- Amway's multi-tiered business model has now been banned in China, closing off its last geographic market to continue the pyramid expansion.
Amway has taken extreme, evasive maneuvers, to cloud the truth and throw regulators, the media and consumer activists off its track. - It has massively recruited outside the USA where regulations in some countries don't exist, are poorly enforced, or will not outlaw a US-based scheme for political reasons.
- It has also aggressively attacked whistle blowers with lawsuits. It has sued even small-time distributors who dared to leave and try to work for other MLMs.
- Amway changed its name to Quixtar, which it said was a a subsidiary of another new name, "Alticor." Many consumers unwittingly joined the "new" company not realizing it was still just Amway.
- Now, in yet another evasive maneuver, the company has yet another new name, Amway Global, and is running TV ads claiming to be "household name" and a "direct seller." In fact virtually no consumers buy Amway products other than the salespeople, and those purchases are not driven by demand or even brand awareness but rather are tied to Amway's misleading income promises.
Despite the diversions, escapes and disguises, the truth keeps doggedly following Amway. Now, the most famous Amway whistle blower - Eric Scheibeler - survived Amway's lawsuits and has told his inside story in a full length book, which is attracting media attention.
Based on the revelations in Scheibeler's book, Pyramid Scheme Alert has sent formal requests to the president of the Direct Selling and its Ethics Division asking for an investigation of Amway. The DSA has responded that it is taking the matter up with Amway.
A formal request has also been sent to the Attorney General, Eric Holder, asking for federal inquiry into the facts and allegations in the book. FTC officials have also been asked to investigate.
Scheibeler's book, Merchants of Deception, is now available.
Pyramid Scheme Alert will maintain its "Amway Watch" in 2010, and will report on responses of the Department of Justice, Federal Trade Commission, legal actions in India, enforcement in England, class action suits in the USA and Canada, the Direct Selling Association's actions, and media investigations.
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| 2009: Extensive Websites and Blogs Worldwide now Expose Multi-level Marketing
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ The end of 2009 is an appropriate time to thank and acknowledge all those, worldwide, who have come forward, published the truth, written books, published websites, made a donation, signed petitions, participated in lawsuits and taken other actions to expose and combat multi-level marketing's global fraud.
As both Ruth Carter and Eric Scheibeler reported in their ground-breaking whistle-blower books, in the 1980's and 1990's, multi-level marketing victims had few information sources to turn to for the truth. They were ensnared by people they knew, liked and trusted. They were brought to meetings that appeared authentic, and the presenters appeared sincere. Government regulators were nowhere to be found (as a result of campaign contributions), giving the schemes the look of legitimacy. Prominent politicians, sports stars and religious leaders seemingly endorsed (for pay) MLMs as the "greatest income opportunity in the world."
The awful truths of false income promises, massive consumer losses, fake testimonials, secret slush funds for upliners, pyramid scheme fraud and illegality, exploitation of friends and destruction of families were well hidden. And when recruits or consumer investors did ask questions, they were met with aggressive denials, threats or lawsuits.
The one break in the wall of deception and denial came with the advent of the Internet. A few courageous new website publishers offered revelations and research about MLM fraud. Some writers were sued and driven off the Internet. But new ones emerged and others fought back to speak the truth.
Today, the truth is available to those willing to seek it. Websites and blogs in many languages are now available.
Pyramid Scheme Alert has assembled a list of key sites that offer valuable research, whistle-blower reports and analysis. See the links.
If you know of others that we overlooked or were unaware of, please send us the links to add.
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| Donations Make It Possible
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Pyramid Scheme Alert is all-volunteer and non-profit, but it still has many costs to maintain its website, to help with legal defense, publicize its research and analysis and to assist thousands of individuals worldwide. PSA's costs are covered by contributions from courageous private citizens. You can support PSA's work by making a donation. |
| No More Silence: Take Action ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Over
the last eight years, Pyramid and Ponzi schemes have grown and spread.
The Internet is now choked with "cash gifting" scams and "matrix
selling" frauds. Pyramid selling scams have multiplied and now boast
that the Recession will bring them more desperate "recruits." The false
promise of income from an "endless chain" recruitment scheme is the
lure of these multi-level marketing scams. Many of the "job" and
"business opportunity" solicitations on the Internet are nothing more
than pyramid schemes, flim-flam frauds.
Consumers now have a way
to fight back. A petition for stronger regulation is being gathered on
the Pyramid Scheme Alert Website.
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