Hopefully the last load of unsolicited 'MLM' bullshit for 2010 has been dumped

Shyam

I see that a certain Mr. Bryan Lever (who bears an uncanny physical resemblance to Bernie Madoff) http://www.blogger.com/profile/17907768431204718589 has left an intellectually-castrated comment under your factual post Mannatech to pay millions to victims for false cla...".

Mr. Lever states that:

'Mannatech is listed on the NASDAQ stock exchange. You need to ask yourself why if it is an illegal operation or pyramid scam. I suggest you do your homework and learn about the technology of NWM as the most efficient distribution method in the world today. That is why it is endorsed by the likes of Warren Buffet, Robert Kiosaki and Donald Trump and thousands of professional people around the world. Are you better qualified than them? Get some education and then rewrite your blog.'

Unfortunately, although Mr. Bryan Lever steadfastly pretends moral and intellectual authority, this unqualified (and unquestioning) fellow is merely repeating essentially the same old scripted-bullshit which has been previously dumped (ad nauseam) on your Blog by the unmasked 'Amway' Lord Haw Haw, and which has obviously been fed to Mr. Lever by 'Mannatech's' own reality-denying propagandists.

Contrary to what Mr. Lever apparently believes to be reality, Warren Buffet does not endorse any 'MLM' fraud and it is libellous for Mr. Lever to imply that he does.

Robert Kiosaki is a notorious 'MLM' parasite, posing as a 'business guru' and 'positive role model,' who has bagged a dubious fortune from peddling 'motivation'/'positive thinking' to countless insolvent 'MLM' victims.

Donald Trump (who has lately become involved with 'MLM' fraud) requires no further comment.

Bernie Madoff was the Chairman of NASDAQ, so'Mannatech's' listing on this stock exchange is hardly a guarantee of commercial authenticity.

Apparently, Mr. Lever is a professional photographer and video producer. Exactly how these twin artistic pursuits qualify him to judge the authenticity of any confidence trickster(s), he doesn't care to explain. However, Steven Spielberg is one of the world's most-successful film director/producers; yet, he couldn't spot that Bernie Madoff was a dangerous sociopath, liar and criminal.

Mr.Lever can read about more of Bernie Madoff's celebrity victims in Forbes magazine http://www.forbes.com/2009/03/12/madoff-guilty-plea-business-wall-street-celebrity-victims.html . Perhaps this shocking information will stimulate Mr. Lever's critical faculties and help him to confront the painful reality that narcissistic racketeers have cheated well-educated persons (like himself), by first tricking rich and famous opinion-makers into endorsing camouflaged, closed-market swindles.

Perhaps Mr. Lever can think back to a time before he became an unquestioning adherent of the self-gratifying 'MLM' lie.

David Brear (copyright 2010)

AgriGold is collecting deposits sans RBI permission

AgriGold has been collecting deposits from the poorest of the poor daily at a minimum of Rs. 10 a day. They have no voice and could not go to anyone to demand back their money. There are hundreds of people who are waiting to get back their money from AgriGold. They do not know whom to approach.

Some apologists say that there have been no complaints against AgriGold but that does not make a wrong right. Collecting money without RBI permission from the public under any name is a crime.

The Reserve Bank of India in letter No. DFC (COC) 386/44/83-84, dated 24.2.1984 addressing the chief secretaries of all State Governments in the country authorising suitable officers to search for documents relating to acceptance of deposits in contravention of provisions of Section 45 S of the Reserve Bank of India Act, 1934 for effective implementation of the provisions of the Act. The RBI Governor authorised the police officers not below the rank of Inspector to apply any court having jurisdiction to issue a search warrant under the CrPCfor issue of a warrant to search for documents relating to acceptance of deposits in contravention of the provisions of Section 45 S of the RBI Act.

In another Notification, the RBI Governor also authorised the police officers not below the rank of Inspector, to take a complaint in writing in respect of any offence punishable under the sub-section (5-A) of Section 58B of the RBI Act to any court having jurisdiction.

While the fact is that the police officers should take initiative and file criminal cases against companies like AgriGold, the police would not move an inch to bring the culprits to book for the reasons better known to them.

It is high time people realised these facts and keep themselves off from such fraudulent companies and deposit their money in scheduled banks.

All Amway apologists are liable to be punished

We have gone through the Section 2 (c) of the Prize Chits & Money Circulation Schemes (Banning) Act, 1978 which defined money circulation schemes. Let us now look at the Section 3 which states, "No persons shall promote or conduct any prize chit or money circulation scheme, or enroll as a member to any such chit or scheme, or participate in it otherwise, or receive or remit any money in pursuance of such chit or scheme."

In other words, joining or making others join such schemes is completely banned under this section.

Likewise, the Section 4 states that "Whoever contravenes the provisions of Section3 shall be punishable with imprisonment for a term which may extend to three years or with fine which may extend to five thousand rupees or with both; Provided that in the absence of special and adequate reasons to the contrary to be mentioned in the judgement of the court, the imprisonment shall not be less than one year and the fine shall not be less than one thousand rupees.

Section 5 states, "Whoever, with a view to the promotion or conduct of any prize chit or money circulation scheme in contravention of the provisions of this Act or in connection with any chit or scheme promoted or conducted as aforesaid,-

(a) prints or publishes any ticket, coupon or other document for use in the prize chit or money circulation scheme; or

( b ) sells or distributes or offers or advertises for sale or distribution, or has in his possession for the purpose of sale or distribution any ticket, coupon or other document for use in the prize chit or money circulation scheme ; or

( c ) prints, publishes or distributes, or has in his possession for the purpose of publication or distribution-

(i) any advertisement of the prize chit or money circulation scheme; or

(ii) any list, whether complete or not, of members in the prize chit or money circulation scheme ; or

(iii) any such matter descriptive of, or otherwise relating to the prize chit or money circulation scheme, as is calculated to act as an inducement to persons to participate in that prize chit or money circulation scheme or any other prize chit or money circulation scheme; or

(d) brings, or invites any person to send, for the purpose of sale of distribution, any ticket coupon or other document for use in a prize chit or money circulation scheme or any advertisement of such prize chit or money circulation scheme; or

(e) uses any premises, or causes or knowingly permits any premises to be used, for purposes connected with the promotion or conduct of the prize chit or money circulation scheme; or

(f) causes or procures or attempts to procure any person to do any of the above-mentioned acts, shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to three thousand rupees, or with both:

Provided that in the absence of special and adequate reasons to the contrary to be mentioned in the judgment of the court, the imprisonment shall not be less than one year and the fine shall not be less than one thousand rupees."

In essence, all apologists of such schemes should be brought to book.

Section 6 deals with the offences by companies. It states who should be punished if companies committed such offences. "Where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceed against and punished accordingly : Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

(2) Not withstanding anything contained in sub-section (1),where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly .

Explanation ;_-For the purposes of this section –

(a) “company” means any body corporate and includes a firm or other association of individuals ; and

(b) “director”, in relation to a firm, means a partner in the firm.

So, all the office-bearers of such companies which indulged in conducting money circulation schemes or prize chits are liable to be punished.

We shall look into other provisions later.

New York Attorney General jumps in where SEC has feared to tread

Shyam

At first glance, the latest news from the de facto American kleptocracy is rather difficult to fathom. Apparently, in the absence of a prosecution by the unaccountable (and possibly corrupt) senior officials at the US Securities and Exchange Commission, the New York Attorney General has decided to prosecute the London-based accounting firm, Ernst and Young, for assisting the (now failed) New York-based investment bank, Lehmann Bros., to hide the truth about how its (multi-million dollar salaried) company officers had managed to acquire debts totaling $768 billions against assets valued at only $639 billions. Your readers will remember that the sudden collapse of Lehmann Bros. signalled the start of the current world financial crisis which we are all now paying for.

http://news.bbc.co.uk/today/hi/today/newsid_9311000/9311770.stm

This latest, amoral, corporate twist in the Lehmann Bros. scandal, and the complacent way it has generally been reported, are emblematic of our times. The expert from the Wall St. Journal (who was interviewed by the BBC) just accepts that (so far) no individual responsible for Lehmann Bros.' collapse has been held fully to account, and that the case against Ernst and Young will almost certainly not go to trial, because a 'financial settlement' will be reached. However, on March 11th. 2010, Jenner & Block (a court-appointed examiner) published the results of a year-long investigation into the failure of Lehmann Bros. This complex document revealed the simple truth that the senior officers of Lehmann Bros. maliciously agreed to the occulting of the bank's massive trading-losses (for which they were responsible) by repeatedly using a devious 'accounting procedure' known as 'Repo 105.' In plain English, on various occasions the bank's bosses secretly swapped $50 billions of the banks assets temporarily into cash just before publishing the bank's regular financial statements in order to mislead its investors by maintaining the appearance of solvency. Apparently, against the advice of certain more-honest employees at Ernst and Young, this so-called 'procedure' was proposed and executed by the accounting firm's less-than-honest senior officers, and approved by the ( now former) boss of Lehmann Bros, Richard S. Fuld, Jr. The corporate structure known as Ernst & Young now stands accused of financial malpractice, but Mr. Fuld still faces a prison term.

Lehmann Bros.' bankruptcy was the largest collapse (by value) of an investment bank since Drexel, Burnham, Lambert folded (amid fraud allegations) in 1990. Immediately following Lehmann's bankruptcy, an already weakened stock-market began to fluctuate massively. The Dow-Jones Index suffered its largest one day loss and largest one day gain. What followed has been labelled the 'perfect storm' of 'economic distress factors'. Eventually, a bailout package (Troubled Asset Relief Program) was prepared by Henry Paulson, Secretary of the US Treasury, in which the US Congress promised to prop up the crumbling US banking system by giving it $700 billions of US tax-payers money. Thus, preventing the entire world economic system from collapsing. The Dow-Jones index eventually closed at a six-year low of 7,552.29 on November 20th 2008. Three months later it had nose-dived to 6626.

The fall of Lehmann Bros. had a catastrophic effect on small investors; particularly bond holders and holders of so-called 'Minibonds' - e.g. in Germany, these essentially-worthless pieces of paper (linked to the artificially-high values of the share- index system), were peddled mostly to ill-informed, elderly persons, students and families by the German arm of Citigroup (the German Citibank now owned by Credit Mutuel).

David Brear (copyright 2010)

The 'Sunrise Travel Club' - Yet another 'Amway' copy-cat

Shyam

I see that an individual has left an abusive comment on your Blog under the rather unusual name of 'George Spicker.'

A quick look on the Net. reveals a certain 'George Spicker' to be promoting yet another 'Amway' copy-cat. Although this fellow claims to have studied philology (the science of language), his publicity is stuffed with schoolboy mistakes:

'George Spicker is an enterpreneur at the the Sunrise Travel Club, a new entry in the 8 Trillion dollar travel industry. All members get a 4 Day/3 Night hotel or villa accommodation in cities worldwide (like London, New Your and Paris) and the change to earn great income. You can get more information at http://www.sunrisetravelclub.com/blog or contact him directly at jobsforeverybody@hotmail.com.'

It will come as no surprise to your readers to discover that (in theory) all anyone has to do to achieve their Dreams in the 'Sunrise Travel Club' is duplicate a proven '100% Positive Business Building System,' i.e. buy 'Sunrise's' exclusive good-value travel products' and recruit their 'Positive' social contacts to do the same - these recruits will then 'duplicate' the same 'System' and buy the 'Sunrise' travel products and recruit their own 'Positive' social contacts, etc. ad infinitum. All 'Negative' persons must be avoided.

This 'George Spicker' steadfastly pretends that the 'Sunrise Travel Club,' is a perfectly viable and legal 'MLM Business Opportunity.' Unfortunately, the 'George Spicker' who has recently left an abusive comment on your Blog would appear to be the very same, unoriginal and inflexible charlatan who has been peddling the endless-chain, closed-market swindle camouflaged as the 'Sunrise Travel Club.' I would, therefore, advise you to ban 'George Spicker' from your Blog Shyam.

David Brear (copyright 2010)

The made-up term, 'Multilevel Marketing,' hides major organized crime

Shyam

Personally, I don't know how the average, senior American regulator at the FTC has the cheek to keep cashing his/her salary cheques when the deconstructed explanation of how the bosses of major organized crime groups like 'Amway' have been committing fraud for decades, has always been right under their noses. However the same can be said about the dunces with diplomas at the US SEC who refused to confront the terrifying reality that Bernie Madoff was one of the most dangerous economic alchemists since the demise of the 'Third Reich.' These selectively-blind officials have been part of the de facto American kleptocracy, and not a remedy for it.

The simple truth, which a clique of complacent (and possibly corrupt) senior US regulators have failed to accept, is that, by definition, no one can make a lawful profit from a closed-market, because, in the final analysis, all closed-markets (no matter how they are camouflaged) are absurd, but nonetheless pernicious, games of make-believe based on the crack-pot, pseudo-economic theory of perpetual expansion = perpetual profits. In the adult world of quantifiable reality, since the money being circulated in a closed-market obviously comes (largely or entirely) from the participants, the most any participant can hope to receive lawfully, is only what he/she contributed in the first place. This is why closed-market swindlers should have long-since been recognised by senior US regulators as economic alchemists who peddle the public infinite shares in their own finite money. One would have thought that this type of rigorous analysis is what senior US regulators have been paid to produce (they are, after all, paid by the public), but nothing could be further from the truth. Indeed, it is difficult to imagine what the average senior American regulator does all day long, apart from possibly lunching with the likes of Bernie Madoff.

In the classic, closed-market Ponzi scheme, provided more and more persons keep participating, the instigator(s) can continue to pay out what appear to be real profits. In this way, Bernie Madoff managed to keep expanding his Ponzi scheme for at least two decades - although certain observers believe his career as an economic alchemist began in the 1960s. Madoff's closed-market swindle was effectively ignored by the regulators who refused even to check whether he was generating real external profits. The fact that he wasn't, was only exposed when the overall economic climate changed and too many participants all demanded their fictious profits at the same time. The 'Amway' closed-market swindle has been effectively ignored by the regulators who have similarly refused to check whether it has been generating real external profits. So far, the fact that it hasn't, has been maliciously occulted for 50+ years by constantly-churning insolvent participants who have been systematically conditioned to blame themselves when inevitably they fail to make money. This is what has recently been identified as a pattern of major ongoing racketeering activity (as defined by the US federal Racketeer Influenced and Corrupt Organizations Act) by attorneys representing the destitute plaintiffs in the Pokorny v.'Amway/Quixtar' civil lawsuit.

The question remains unanswered: Why haven't US federal prosecutors also recognized so-called 'MLM' companies as the front for major organized crime?

David Brear (copyright 2010)

50% of all participants in Madoff's Ponzi scheme made an overall profit

Shyam

The billionaire bosses of the 'Amway' mob, and their criminal associates, capitulated in the recent Pokorny RICO lawsuit, and agreed to a settlement which will cost them $155 millions, because they knew that, if the case went to trial, they would be convicted of racketeering and their long-running, abusive game of make-believe would soon be over.

In the adult world of quantifiable reality, the percentage of persons who have lawfully received an overall material benefit from participating in the so-called 'Amway MLM Business Opportunity' (out of all the tens of millions who have been churned through it during the previous 50+ years) has been effectively zero. Of the comparatively-tiny percentage of grinning 'Amway Diamond' schills who have appeared to have benefited-massively, the main source of their illegal profits has not been the so-called 'Amway Business,' it has been a related advance fee fraud (a.k.a. 'tool scam'). Indeed, Bernie Madoff's closed-market swindle had, in comparison, an enormous percentage of fake 'winners' amongst its participants.

According to Iving H. Picard, the Trustee in Bankruptcy for the so-called investment company arbitrarily and falsely defined by its instigator, Bernie Madoff, as 'Bernard L. Madoff Investment Securities LLP', approximately 50% of all the persons who gave their authentic cash to this fake company (during several decades) received an overall material benefit in return. However, as Irving H. Picard is fully-aware, the real source of all these so-called 'profits' (regularly paid out by Bernie Madoff) was not, as he steadfastly pretended, from his miraculous dealings on the stock market, but actually from the latest participants in his closed-market Ponzi scheme. In other words, whether they knew it or not, all Madoff's 'winners' were in receipt of stolen funds.

One of Madoff's (apparently innocent) schills, Jeffry Picower, received more than $7 billions stolen from other participants. His widow has just agreed to pay every stolen cent back to Madoff's victims via the Trustee for 'BLMIS' and the US government.

http://www.madofftrustee.com/documents/2010_December_17_Trustee_Picower_Press_Release.pdf

http://www.madofftrustee.com/

http://www.bbc.co.uk/news/business-12023902

Bernie Madoff's Brother, Peter, has so far refused to pay back voluntarily his own fake 'winnings' from the fraud. He claims to have been completely unaware that his brother was a crook. However, according to the Trustee in bankruptcy, one year Peter Madoff invested only $14 (forteen) and received around $30 (thirty) millions stolen from the victims.

Peter Madoff is evidently almost as big a liar as his narcissistic brother. Fortunately, there is a very strong probability that he will also be bankrupted and jailed.

David Brear (copyright 2010)

'Amway' is a global scam, but with an American remedy

Shyam

Unfortunately, although the Indian republic has apparently, intellectually-rigorous legislation (dating from the 1970s) which was designed to protect the people of India by prohibiting the perpetration of all closed-market, money circulation schemes (no matter how cleverly they might be dissimulated), the legislation has (so far) proved to be of limited value. The billionaire bosses of the 'Amway' mob know full-well that when you pass a law, but fail to enforce it, you authorize the very thing which you sought to prohibit. Consequently, these wealthy American crooks have made every effort to obstruct the Indian Money Circulation Schemes Banning Act from being enforced, in order that they can continue to steal from the people of India whilst their apologists steadfastly pretend that 'Amway's' (so-called) 'MLM Business Opportunity' is authorized by the Indian government. However, this obstruction of Indian justice is obviously part of a pattern of ongoing, major racketeering activity (as defined by the US Federal Racketeer Influenced and Corrupt Organizations Act) stretching back more than 50 years, and now adversely effecting dozens of countries around the globe.

As you know, major organized crime groups like 'Amway', comprise labyrinths of (apparently independent) corporate structures pursuing lawful, and/or unlawful, enterprises which have been maliciously set up in order to prevent, and/or divert, investigation and isolate their leaderships from liability.

Sadly, no matter how tough the Indian legislation appears, Indian police officers can neither investigate, nor prosecute, the billionaire 'Amway' organ-grinders in the USA under Indian laws. However, the DeVos and VanAndel clans, and their criminal associates, have been using Indian monkeys (i.e. the corporate officers of 'Amway India Enterprises' and the 'Indian Direct selling Association') to cheat hundreds of thousands of Indian citizens.

The only effective way for India to tackle the 'Amway' problem will be for Indian law enforcement agents to select a representative a group of adversely-effected Indian 'Amway' victims, and then file a multi-billions dollar class-action RICO lawsuit in a US federal court against the billionaire bosses, and millionaire under-bosses, of the 'Amway' mob on behalf of all Indian victims. The pattern for this lawsuit is contained in the Pokorny RICO lawsuit as filed against the 'Amway' mob in California three years ago.

One would have thought that US attorneys would be queueing up to represent the people of India; for the world now knows that, in the face of a well-informed civil attack under RICO, the billionaire bosses of the 'Amway' mob are obliged to surrender.

David Brear (copyright 2010)

It's an open and shut criminal case against Amway India

India has enacted a very good legislation long back in 1978 to bring the culprits like Amway India to book. The enactment is Prize Chits & Money Circulation Schemes (Banning) Act, 1978. Earlier, the Government of Andhra Pradesh enacted a money circulation schemes banning act in 1965 followed by the Madhya Pradesh State Government and the Chandigarh Administration. However, the Union Government took initiative and enacted the all India legislation in 1978.

The enactment has effectively curbed the activities of the crooks who indulged in open money circulation schemes. However, after the Indian economy was opened to the liberalisation in 1990s, along with many legitimate companies who opened shop in the country, crooks like Amway made an entry with the promise of 'direct selling' for the benefit of the consumers. Sadly, the Indian authorities never asked them what is the directly selling method of Amway India. They presumably thought about the Indian direct selling method of weekly fairs in which the small and medium manufacturers bring their ware and sell directly to the villagers at reasonable prices.

But these crooks started a disguised money circulation scheme in the name of selling products. All these years they have only been lining their pockets. One police officer had correctly identified the activities of this crook company and he knew what enactment is applicable to file a criminal case against it.

Let us look at the Section 2 (c) of Prize Chits & Money Circulation Schemes (Banning) Act which gives the definition of money circulation scheme to understand the vision of our lawmakers.

Section 2 (c): “money circulation scheme” means any scheme, by whatever name called, for making of quick or easy money, or for the receipt of any money, or valuable thing as the consideration for a promise to pay money, on any event or contingency relative or applicable to the enrollment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions;

Amway India calls its scheme 'direct selling'. The enactment says whatever name called, i.e. whether it is multilevel marketing, referral marketing, network marketing or direct selling, it is ultimately a money circulation scheme.

The enactment refers the term 'for making of quick or easy money. All these schemes are -intended to make quick or easy money. That is why Amway calls its model a good business opportunity to become rich in 2-5 years period.

The enactment also states 'for the receipt of any money or valuable thing as consideration for a promise to pay money'. Amway India relies on 'valuable thing' the products which are sold at an exorbitant prices.

The enactment also says that on any event, or contingency relative or applicable to the enrollment of members into the scheme. Amway India apologists cannot escape stating that there is no enrollment.

It also states another important ingredient, i.e., 'whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions'. Amway India apologists claim that the recruiters are not making any money from enrollment. But they cannot deny that they are making money from periodical subscriptions i.e., purchasing made by their downline.

So the criminal case against Amway India is an open and shut case. That is why these crooks are a worried lot about the criminal case.

Let us discuss the powers entrusted with the police in the next post.

Closed-market swindles are child's play to detect

Shyam

No matter how heavily they might be camouflaged, once you know how the trick is pulled, all premeditated closed-market swindles are child's play to detect and to prosecute. In the final analysis, the only fact which needs to be established is that they have no significant, or sustainable, source of revenue other than their victims. Indeed, I would say that (given the political will) it would be a relatively straight forward matter to draw up RICO-style legislation making it a criminal offence maliciously to instigate, derive benefit from and dissimulate any form of closed-market in which victims are manipulated by their own instinctual desires and then peddled infinite shares of their own finite money.

Self-evidently, one person who is perhaps best-qualified to detect a closed-market swindle, is Bernie Madoff. Whilst awaiting sentencing, Madoff met with the SEC's Inspector General, H. David Kotz as part of the investigation into how regulators failed to detect Madoff's Ponzi scheme. The plain truth is that regulators probably failed to detect Madoff's fraud, because they had absolutely no idea how to detect it. Apparently, H. David Kotz himself might now know how to recognise a closed-market swindle. The transcript of his amazingly frank interview with Bernie Madoff was released under the Freedom of Information Act.

Ironically, Madoff told Kotz that he would have preferred to have been caught in 2003 and that this could easily of happened, but:

'bumbling investigators failed to ask the right questions... I was astonished... they never even looked at my stock records. If investigators had checked with the Depository Trust Company (a central securities depository), it would have been easy for them to see. If you're looking at a Ponzi scheme, it's the first thing you do.'

In simple terms, all that the complacent (and possibly corrupt) SEC boys and girls had to do to detect and prosecute the Madoff fraud, was verify that he hadn't actually been buying and selling shares (and, thus, not making all the external profits he claimed), but they didn't.

In June, 2009, Bernie Madoff described the new SEC Chairman, Mary Schapiro, as a 'dear friend,' and he also said that the SEC Commissioner, Elisse Walter, was a 'terrific lady' whom he knew 'pretty well.' Since Madoff's arrest, the SEC has been widley-condemned for its lack of financial expertise and lack of due diligence, despite having received complaints about Madoff for almost a decade. H. David Kotz, accepts that since 1992, there were no less than six incompetent attempts at investigation of the Madoff fraud, made by the SEC.

It seems to me that a very strong case could be brought against certain SEC investigators for taking money from US tax-payers under false pretenses.

David Brear (copyright 2010)

American Kleptocracy at work, please do not disturb?

Shyam

Self evidently, the person who is perhaps best-qualified to detect a closed-market swindle camouflaged as a 'fool-proof opportunity to make money,' is Bernie Madoff. Indeed, whilst awaiting sentencing, Madoff met with the SEC's Inspector General, H. David Kotz, who is apparently still conducting an investigation into how regulators failed to detect Madoff's obvious fraud. When interviewed, Madoff said he could easily have been caught in 2003, but 'bumbling investigators failed to ask the right questions... I was astonished. They never even looked at my stock records. If investigators had checked with the Depository Trust Company (a central securities depository), it would have been easy for them to see. If you're looking at a Ponzi scheme, it's the first thing you do.' (In simple terms, all that SEC officials had to do to uncover Bernie Madoff's fraud, was check to see if he had actually been buying and selling shares, but they didn't). In June, 2009, Bernie Madoff described the new SEC Chairman, Mary Schapiro, as a 'dear friend,' and he also said that the SEC Commissioner, Elisse Walter, was a 'terrific lady' whom he knew 'pretty well.' Since Madoff's arrest, the SEC has been widely-condemned for its lack of financial expertise and lack of due diligence, despite having received complaints about Madoff for almost a decade. H. David Kotz, found that since 1992, there were six incompetent investigations of Madoff by the SEC.

Recently, I was accused of being a 'bit of an alarmist' for describing the USA as a de facto kleptocracy. Interestingly, the person who made this statement is an elderly American attorney and life-long Republican. He qualified his opinion by saying that the fact that Bernie Madoff was sentenced to 150 years prison for fraud, proves that America remains a healthy democracy and that the SEC functions. However, this patriotic fellow conveniently ignored many other facts.

The US Securities and Exchange Commission did not catch Bernie Madoff. He made a confession of guilt, and handed himself in, when he could no longer maintain the lie that his investment company's hedge fund had always been expanding and had generated billions of dollars of profits for its clients. It is now a matter of public record that Bernie Madoff began to peddle his malignant fairy-tale decades ago, and that no US government regulator bothered to challenge its authenticity. Today, two years after Bernie Madoff was finally arrested by the FBI, no US government regulator has been held fully to account. That said, Christopher Cox, the former chairman of the SEC, has accepted his organization's incompetence in failing to stop Bernie Madoff's dangerous lie before it grew to multi-billions dollar proportions. As long ago as 1992, the SEC was directed to a fake 'feeder fund' which only invested its victims' money with Madoff, and which, according to the the SEC's own documents, promised 'curiously steady' returns. However, the SEC did not investigate when its officials clearly knew that something was highly-suspicious about Madoff's infallible 'money-making' powers. For decades, the SEC ignored numerous, and obvious, red flags and buried well-informed complaints about Madoff being a Ponzi copy-cat. Financial analyst andwhistleblower Harry Markopolos first complained to the SEC'sBoston office in May 1999, telling the SEC staff they should immediately investigate Madoff. Markopolos even supplied the SEC with a detailed explanation of why it was completely impossible to make the continuous profits Madoff claimed, using his mystifying 'Split-Strike Investment Strategy.' Markopolos, didn't receive a reply.

Before he left his SEC post, Christopher Cox solemnly promised that an investigation would ensue into 'all staff contact and relationships with the Madoff family and firm, and their impact, if any, on decisions by staff regarding the firm.' In 2009, the Project on Government Oversight (POGO), a US government watchdog group, sent a letter to Congress criticizing the SEC for failing to implement more than half of the recommendations made to it by its own Inspector General. According to POGO, during the period 2006-2009, the SEC had taken no action on 27 out of 52 recommended urgent reforms suggested in the Inspector General's reports, and it still had a 'pending' status on 197 of the 312 recommendations made in audit reports. Difficult as it is to believe, the SEC has never had a policy of disciplinary action for employees who receive 'improper gifts or other favours' (i.e. bribes) from 'financial companies' (i.e. corporate structures controlled by criminals).

Amongst a collection of similar scandals, it has recently been revealed that in June 2010, the SEC settled a lawsuit with former SEC enforcement lawyer Gary Aguirre, who was disciplined and sacked in September 2005 after attempting to subpoena Wall Street businessman, John J. Mack, in an insider trading case involving hedge fund, 'Pequot Capital Management.' At this time, the case was dropped, but just before the SEC's settlement with Aguirre was reached, the organization's senior officials suddenly had a change of heart and filed charges against 'Pequot.' However, it had taken the release of a Senate report to bring these events about.

David Brear (copyright 2010)

‘If something sounds too good to be true, it probably is’

Shyam

Recently, I have had the annoying (but nonetheless encouraging) experience of hearing government regulators employ my term: 'closed-market swindle,' even though they hadn't the slightest idea who coined it.

To my great surprise, one UK regulator, a certain Mr. O'Callaghan, was prepared to go on the record as stating that he accepts that (after 'Amway's' $155 millions capitulation in the Pokorny RICO lawsuit in California), his Dept. had made a 'mistake' in only filing a public interest bankruptcy petition against one 'Amway' company in the UK. His only defense of this costly, tactical error was that 'racketeering does not exist in Britain.' (Although, I think what the fellow actually meant to say was: racketeering is not yet recognised as an offence under British laws)

Meanwhile, other regulators have assured me that they are now fully-aware that a lack of real external profits is the tell-tale signature of all Ponzi schemes and pyramid scams, even if these frauds are camouflaged by multi-billion dollar sales-figures (which are, in reality, financially-incestuous internal transactions). For obvious reasons, the latest generation of all-knowing UK regulators prefer to ignore the embarrassing fact that the deconstructed explanation of this type of fraud has actually been available for decades. Ironically, I was the person who, 15 years ago, coined the term 'premeditated closed-market swindle' as part of my attempt to get UK government regulators to take action against the billionaire bosses of the 'Amway' mob, and their many 'MLM' copy-cats, who (since the 1970s) have operated behind the shield of rigorous 'self-regulation' and the so-called 'UK Direct Selling Association' (itself a privately-controlled, limited-liability, commercial company, financed by foreign-based racketeers). In truth, complacent (and possibly corrupt) government regulators have been part of this ongoing criminogenic problem: not the solution to it.

How (in the cold light of day) can complacent (and possibly corrupt) UK trade officials still refuse to challenge publicly the malignant fairy-tale that: Richard DeVos and Jay VanAndel (a couple of ambitious, but penniless, WWII veterans), became billionaires by inventing a new form of infallible, philanthropic capitalism, 'MLM,' based on the ‘Christian-inspired principle of helping others to succeed?’ But then, how (in the cold light of day) could the complacent (and possibly corrupt) officials at the US SEC have refused to challenge publicly the malignant fairy-tale that: Bernie Madoff (an ambitious, but penniless, lifeguard),became a billionaire by inventing a new form of infallible, philanthropic capitalism, 'Split-Strike Strategy,' which enabled him to invest on the stock market and always show a profit, no matter what the overall trading conditions were? or that: Bernie Madoff was prepared (because of his Jewish-inspired Principles) to share the secret of his success with others?

At the risk of stating the obvious, if ten individuals each give you ten coins, then, no matter how you divide the resulting one hundred coins, it is impossible for you to give all your contributors a greater number of coins than they started with. In technical terms, this is the most elementary example of an incestuous, and therefore unviable, system of economic exchange; in that, since it has no source of external revenue, it can have no possibility of generating a profit for the bulk of its contributing participants. However, the same incontrovertible logic applies if your contributors number one hundred, one thousand, one hundred thousands, one million or even one hundred millions. Unless the person(s) receiving the coins possesses the superhuman power to suspend the laws of physics and miraculously create more coins from nothing, then their number remains finite. Any claim to the contrary is a lie, and lying to people to get their money is fraud which is a form of theft.

A pyramid scam can be more accurately described as a ‘premeditated closed-market swindle.’ In everyday terms, it is the peddling of the finite as infinite, or ‘Alchemy’ applied to economics.

Bernie Madoff ran the most-widely understood form of ‘closed-market swindle,’ technically defined as: those without tangible specificity (popularly known as: ‘snowball', ‘Ponzi' or ‘money circulation’ schemes); wherein the instigators style themselves as ‘Commercial Sponsors’, ‘Fund Managers’, etc. Then, by maintaining an absolute monopoly of information presented using a constant repetition of further, reality-inverting ‘commercial’ key words and images combined with pseudo-economic and structural mystification, deceive members of the public into becoming, and to deceive others into becoming, the unconscious victims of, and contributing participants in, a counterfeit‘Investment Scheme’ without a consistent source of external revenue (due to the fact that the instigators’ hidden motive is merely the acquisition of victims’ money) in which victims are arbitrarily, and falsely, defined by the instigators as ‘Investors,’but over which the instigators retain absolute control of its means of exchange.

Behind their sanctimonious act, what the ‘Amway’ mob released on a vulnerable 1950s America was a virulent new strain of premeditated closed-market swindle, which can be defined as: those with tangible specificity (popularly known as ‘Multilevel Marketing' , ‘MLM’ , or ‘Network Marketing’, or ‘Networking’, or‘Direct Selling’, or ‘Self-Directed Income' , ‘SDI', or 'Business Opportunity', scams); wherein the instigators style themselves as‘Manufacturers’, and/or ‘Suppliers’, of ‘Exclusive Products’, and/or‘Services’, and as ‘Commercial Sponsors’ then, by maintaining an absolute monopoly of information presented using a constant repetition of further reality-inverting ‘commercial’ key words and images combined with pseudo-scientific/economic and structural mystification, deceive members of the public into becoming, and to deceive others into becoming, the unconscious victims of, and contributing participants in, a counterfeit ‘Direct Sales Scheme’ (without a consistent source of external revenue due to the fact that the products, and/or services, are kept at such a banal quality, and/or high price, as to render them effectively-unsaleable on the open market) in which victims are arbitrarily and falsely defined by the instigators as: ‘Independent Business Owners, Self-Employed Distributors,’ etc., but over which the instigators retain absolute control of not only its means of exchange, but also over its means of production and distribution and over its system of dispute-resolution.

In effect, the ‘Amway’ mob originally instigated a more complicated (and, therefore, more sustainable) version of a Ponzi scheme where illegal internal payments were camouflaged as ‘sales.’ Victims were generally honest, law-abiding Christian folk manipulated by their existing beliefs and instinctual desires. When, inevitably, they lost money, on paper (because they were styled as ‘Independent Business Owners’) it appeared to be the participants own fault. Many were too financially weakened, and/or embarrassed, and/or guilt-ridden, to confront external reality and complain. They’d often been recruited by a friend or relative, and, in turn, they’d tried to recruit their own friends and relatives (making the truth even more unthinkable).

Unfortunately, the 'Amway' mob didn't stop there.

David Brear (Copyright 2010)

Time is running out for Amway and their ilk

Let us look at the ingredients of the two similar cases decided by the Madras High Court. One is V-Can Network Limited and the other is Apple FMCG.

In the V-Can Network case, the allegation in the complaint is that one Senthil Murugan, who had become a member and who had bought a magnetic bed, falsely induced the complainant that if he purchases a magnetic bed for Rs.5,990/-, he would in turn become a member and if he in turn introduces two more members, he would make quick money to the tune of lakhs of rupees and thereby cheated the complainant. Doesn't it sound familiar. Same is the case with Amway India.

The other case is Apple FMCG. In this case there are only two stages, viz. stockist and distributor. The distributor can introduce another person as a distributor and he will also get commission. The distributor has to put in his effort in selling the products and then only he will get the commission. Admittedly, for these products, the so called distributor pays a sum of Rs.550, whereas the distributor’s price is only Rs. 372. Therefore, Rs.178 is charged extra from the distributors. This amount, the distributor pays to the company because he is made to believe that when he sells these goods to others and enroll others in the scheme, he gets commission from the petitioner company. (This amount is cunningly called Compensation Plan by Amway India) Such Commission depends upon the total volume of business that he generates by enrolling new distributors, it progresses like a chain; the amount of commission depends on the subsequent “distributors” who is made to join by the petitioner or a purchaser through him. The promise of the possible commission is the reason for one’s enrolment. The form requires to be filled up with three “distributors” names through whom the new entrant get into the scheme and their placement.

The learned counsel for the petitioner further submitted that earlier 45% of the sale amount was distributed as commission but presently it is increased to 65% of the sale price. That means the goods which are worth only Rs.35/- are sold at rs.100/- and this rs.35/- covers not only the price of the goods, but also expenditure involves for the administration of the company. Of course, the Court can not interfere with the fixation of the price. Anybody is free to fix any price and it is for the customers to accept or not. But, it is not an ordinary sale of goods. The persons are lured to become a distributor only on the hope or expectation that he may get more money by way of commission if he sells the products similarly to others. Of course, many persons are earning lot of commission in this manner. This chain is likely to progress for some time. At one point of time the progress of the chain will stop. On that day persons who buy the product may not find any further distributor to purchase from them. By the time, the company would have earned enormous profit. But a very large number of persons would be left cheated.

And this it the comment by the Andhra Pradesh High Court about the scheme of Amway India.

"It is, thus, evident that the whole scheme is so ingeniously conceived that the inducement for aggressive enrollment of new members to earn more and more commission is inherent in the scheme. By holding out attractive commission on the business turned out by the downline members, the scheme provides for sufficient inducements for its members to chase for the new members in their hot pursuit to make quick/easy money."

When there are so many decided cases in India, no wonder Amway India is afraid of facing criminal cases. If one case is decided it is going to be the Waterloo for Amway India. That is why it is trying its level best to prolong the criminal case at Hyderabad court.

Because of these crooks so many indigenous crooks are sprouting all over India. It is high time the officials both the administration and the police acted swiftly and close down the operations of these crooks at an early time.

Mark Madoff pays the ultimate price

Shyam

Today, it has been announced that Mark Madoff (aged 46), one of Bernie Madoff's two sons, was found hanged in Mahattan (in an apparent suicide).

http://www.bbc.co.uk/news/world-us-canada-11976801

Neither Mark Madoff, nor his brother, Andrew, were charged by US federal prosecutors with any criminal offence in connection with their father's multi-billion dollar Ponzi fraud. However, Mark Madoff was facing various civil lawsuits filed by some of his father's victims, in which he was accused of 'failing to protect investors' assets' and of 'improperly receiving $66 millions to buy luxury homes.'

This sombre news should be seen as a salutary warning to the remaining racketeer-authors of the financially-suicidal, closed-market fairy-tale; particularly; those who also continue to peddle the closed-logic belief that all things are justified in the pursuit of the 'Dream' of unlimited wealth.

David Brear (copyright 2010)

Bernie Madoff's criminal associates hit with $20 billions RICO lawsuit

Shyam

When you read the latest press release (December 10th, 2010) from the liquidation proceedings of 'Bernard L. Madoff Investment Securities LLC' ('BLMIS'), it beggars belief that the grossly-incompetent senior officers at the US Securities Exchange Commission (who failed to protect the US public by launching a rigorous criminal investigation into the obvious multi-billions dollar Madoff Ponzi fraud, despite years of informed-complaints), remain at their posts and have not faced serious criminal charges themselves. Ironically, the Trustee for the liquidation (and his attorneys) are apparently still obliged to continue to refer to Madoff's fake 'Investment' company, and to his fake 'Investors,'using Madoff's own reality-inverting terminology:

Irving H. Picard, the Trustee for the liquidation for BLMIS today announced the filing of a complaint alleging violations of the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”) in the United States Bankruptcy Court for the Southern District of New York against members of the “Medici Enterprise,” masterminded by Sonja Kohn, principal shareholder of Bank Medici, which includes at least six members of her family, UniCredit, Bank Austria and multiple trusts and nominee companies in New York, Austria, Italy, Gibraltar and elsewhere.

The action seeks to recover $19.6 billion (trebled under RICO) in damages to the estate of 'BLMIS' caused by the Medici Enterprise’s 23-year criminal relationship with Bernard Madoff and its indispensible role in facilitating his Ponzi scheme. The complaint alleges that more than 8,000 predicated acts, by Kohn and her co-conspirators, violated RICO and established a pattern of racketeering activity comprised of, among other things, money laundering, mail and wire fraud, and financial institution fraud. All recovered assets will be placed in the Trustee’s Customer Fund and distributed, pro rata, to BLMIS' customers with valid claims.

“In Sonja Kohn, Madoff found a criminal soul mate, whose greed and dishonest inventiveness equaled his own,” said Mr. Picard. “Given the scope of Madoff’s Ponzi scheme, the deceptive nature of the defendants, and the deliberately Byzantine structure of the Medici Enterprise, we believe that even more information regarding the full scope of this criminal enterprise will be revealed through discovery.”

“Sonja Kohn went by many names and operated under many guises, creating an international network of spurious investment entities and masterminding an illegal scheme not only to support the Madoff fraud, but also to enrich herself, her family, and the largest banks in Austria and Italy,” said Timothy S. Pfeifer, counsel at Baker & Hostetler LLP, the court-appointed counsel for the Trustee.

“To potential investors, Kohn held herself out as a close friend of Madoff and intimated that this relationship would yield special returns for investors she referred,” said David J. Sheehan, counsel to the Trustee and a partner at Baker & Hostetler. “In a long-term pattern of criminal activity, Kohn began her illegal scheme in New York almost immediately after meeting Madoff around 1985 and, from that point, operated as a BLMIS insider. Madoff paid her to feed money into the Ponzi scheme. The agreement was a secret even inside BLMIS, and Kohn took calculated measures to distance herself and her family from the fraud.”

Madoff kept records of the BLMIS accounts for which he secretly paid Kohn. Madoff appears to have attempted to destroy these records before he confessed on December 11, 2008. “More than $9 billion of the Ponzi scheme’s stolen capital is directly attributable to Kohn and the Medici Enterprise. The total amount lost in the Ponzi scheme is approximately $19.6 billion, making these actors arguably the single most critical building block – the ‘sine qua non’ – of the Ponzi scheme,” said Mr. Pfeifer.

The Medici Enterprise is a deliberately complex “association-in-fact” that Kohn developed in and largely directed from New York. The complaint states that, with the help of Bank Austria, Kohn established Bank Medici in Austria as a mechanism to solicit investors for the Ponzi scheme. Bank Medici, of which 25 percent is owned by Bank Austria and UniCredit, purported to be a licensed and regulated bank in Vienna. It was, however, a de facto branch of Bank Austria, operating under the “Medici” name while all of its accounts and portfolios were held and administered by Bank Austria. Bank Austria personnel staffed Bank Medici.

The Bank Austria connection provided Kohn and Bank Medici with the imprimatur of legitimacy they needed to feed staggering amounts of money into BLMIS. Bank Austria collaborated with Kohn and Bank Medici to create numerous feeder funds, solely to direct cash to Madoff. For their various roles in the Medici Enterprise, the complaint states that Bank Austria, Bank Medici, their branches, subsidiaries, and officers and personnel received hundreds of millions of dollars in fees, kickbacks, fictitious profits, and other proceeds of the Medici Enterprise’s illegal scheme.

The complaint states that Kohn solicited at least 30 direct accounts for Madoff, including Primeo Fund Ltd., Thema International Fund plc, Herald Fund SPC (“Herald Fund”), Alpha Prime Fund Ltd., Senator Fund Ltd., and Herald (Lux) SICAV. Together, these six “Medici Enterprise Feeder Funds” fed almost $4 billion into the Ponzi scheme. Madoff also paid Kohn for soliciting Harley International (Cayman) Ltd. (“Harley”), Plaza Investments (“Plaza”), and Optimal Multiadvisors Ltd. (“Optimal”). Harley fed more than $2.3 billion into the Ponzi scheme. Plaza fed more than a half-billion dollars into the Ponzi scheme. Optimal fed more than $1.6 billion to Madoff.

Today’s filing outlines how Kohn and her husband owned the central funding mechanism for the Medici Enterprise. The Kohns’ Herald Asset Management Ltd. (HAM) purported to “manage” Herald Fund and siphoned, at the very least, $100 million from its fake returns that it distributed to other members of the Medici Enterprise. HAM and Bank Medici further claimed that they, not Madoff, ran his purported investment strategy. UniCredit and Bank Austria were aware that HAM and Bank Medici did not perform these fictitious services.

The complaint further states that, in addition to channeling more than $9 billion into the Ponzi scheme, Kohn and her family also siphoned at least $62 million – and possibly many times that amount – directly from BLMIS into their private accounts using an elaborate network of sham entities in New York and elsewhere that existed solely to receive secret kickbacks from Madoff.

“Kohn’s intimate knowledge of Madoff’s fraud is further illustrated by her actions in the weeks and days before and after Madoff’s arrest, when she and her family, using their network of trusts and nominee companies, attempted to launder the stolen proceeds of her illegal scheme and conceal it. Congress enacted the RICO statute to address exactly the type of criminal activity that Kohn and the other members of the Medici Enterprise perpetrated in New York and elsewhere for more than twenty-three years,” said Mr. Pfeifer.

( A copy of the full press release can be found at http://www.madofftrustee.com/ )

This dramatic news must have sent shivers up the spines of the billionaire bosses of the 'Amway' mob and their criminal associates; for, since their recent capitulation in the multi-millions dollar Pokorny RICO lawsuit, it has become even more of an inevitability that (one day) we will have the pleasure of reading a similar press-release announcing a multi-billions dollar RICO lawsuit against the criminal associates of the (bankrupted and jailed) former-billionaire bosses of the 'Amway' mob, issued by the Trustee for the liquidation of the 'deliberately-Byzantine structure' which (since 1959) has been most-commonly referred to as the 'Amway Corp.' The US Congress enacted the RICO statute to address exactly the type of criminal activity which the De Vos and Van Andel clans and the other members of their'Amway' mob, have perpetrated in the USA, and elsewhere, for more than 50 years.

David Brear (Copyright 2010)

Why numerous gangs of 'MLM' racketeers still remain at large

Shyam

Given the wider evidence, it is high time that the millions of dollars of graft (in stolen cash) accepted by certain Republican Members of the US Congress from the criminal authors of the malignant ‘Amway/MLM’ fairy-tale (and from their heirs, spouses and criminal associates), should now be identified, and prosecuted, as one of the most far-reaching, and sustained, acts of organized corruption in American political history.

The multi-million dollar ‘soft money contributions’ made by the billionaire bosses of the ‘Amway’ mob (and ‘affiliated donors’) to the ‘Republican National Committee’ during the previous 20 years, are largely a matter of public record. That said, this eight figure, long-term bribe represents only what has been officially declared. To make matters worse, at least 6 Republican Members of Congress have all been reality-denying adherents of the malignant ‘Amway/MLM’ fairy-tale, whose individual critical, and evaluative, faculties cannot have been enhanced by their electoral campaigns also having been largely-financed by the unlawful object of their unquestioning devotion:

- Sue Myrick (N. Carolina).

- Jon Christensen (Nebraska).

- Dick Chrysler (Michigan).

- Richard Rombo (California).

- John Ensign (Nevada).

- Tom DeLay (the now-disgraced, former Republican Majority Whip in Congess, recently found guilty of money-laundering, and conspiracy, by a Texas jury)

Considering the global, multi-billion dollar closed-market swindle and related advance fee frauds which have been proven (time and again) to be lurking behind ‘Amway’ and its many 'MLM'clones, the members of this apparently 'conservative-Christian' faction must have been pretty dim, and/or naïve, to have genuinely believed that all their 'Amway'-connected payments were honest in origin or that they were being made for purely honest motives. So what did the ‘Amway’ racketeers get in return for their thirty (stolen) pieces of silver?

In 1997, the US Congress passed a budget package which, due to a last minute intervention by House Speaker Newt Gingrich, handed the ‘Amway’s' bosses a tax-break (reportedly) worth $283 millions.

In 2001, despite a glaring conflict of interest, President Bush appointed a former member of ‘Amway’s’ aggressive echelon of reality-denying attorneys, Timothy Muris, as Chairman of the ‘Federal Trade Commission.’ Muris then installed his chum, David Scheffman, as the ‘Chief Economist of the FTC.’ Scheffman also had a glaring conflict of interest, in that he had previously been paid to play the reality-denying role of ‘expert witness’ for an ‘Amway’ clone, ‘Equinox International.’ In a lawsuit filed by the FTC. US government attorneys acting on behalf of the people had rightly claimed that ‘Equinox’ was a vast pyramid scam camouflaged by effectively-unsaleable products. Although the bosses of ‘Equinox’ subsequently capitulated and agreed to close their counterfeit 'direct selling' company to dodge further investigation, Scheffman had delayed proceedings, and cost US tax-payers a fortune, by steadfastly pretending that his employers' 'MLM Business' activities were perfectly lawful, because they were identical to those of ‘Amway’. Muris left his post at the FTC in 2004, and went back into private legal practise. In this new (much-more-highly-paid capacity) he then lobbied his former colleagues at FTC on behalf of another gang of 'MLM' racketeers who were hiding behind the corporate front of 'Primerica Financial Services.' Since Muris and Scheffman' brief reign at the FTC, federal prosecutions of blame-the-victim pyramid scams camouflaged by effectively-unsaleable wampum, have effectively ceased.

If nothing else, this subversion of the US democratic process and resulting infiltration of the FTC by the paid agents of 'MLM' racketeers, explains why (despite a growing mountain of damning evidence from all around the globe) the authenticity of the malignant ‘Amway/MLM’ fairy-tale has, so far, remained unchallenged by senior federal law-enforcement agents. Unfortunately, to date, the silence of the leadership of the Democrat party on this issue has also been deafening. It is still to be hoped that the current, shameful situation will be addressed as soon as possible by the Obama administration, and that all those responsible will be finally held fully to account.

David Brear (Copyright 2010)

Madras High Court termed MLM illegal long back

In M/s. Apple FMCG Marketing (Pvt) Limited, Vs. The Union of India, the State of Tamil Nadu and the Director General of Police, the company filed a Petition under Article 226 of the Constitution of India praying for a writ of declaration that selling products through the Network Marketing System is legal and not in contravention of the provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 or any other law and consequently forbearing the respondents or their subordinates or agents or their men from in any manner interfering with the lawful business activities of the petitioner company by either freezing their bank accounts or interfering in the conduct of the seminars and promotional meetings held for the distributors and prospective distributors and pass such further orders.

The Madras High Court held that Mere fact that no complaints were received does not make an act legal, if it be otherwise illegal (Para 15).

Contention of the petitioner that there is no chain of customers appears not acceptable- Scheme creates chain of customers and only when the chain progresses without any break in any of the links, the ‘principal distributor’ gets more commission- If, for any reason, the chain is broken, at any stage, then the principal distributor’s commission would get reduced proportionally to the extent- Therefore, it is not correct to say that there is no chain of customers in the process (Para 16).

Definition in S. 2© makes it clear that any scheme by whatever name it is called whereby on a promise that one would receive or would make quick or easy money be enrolment as members into the scheme is ‘money circulation scheme’ – Such members earlier get commission without doing any work; getting such a commission is nothing but getting quick or easy money- Therefore, such schemes/ the so called ‘Multilevel Marketing’, definitely falls within the definition of ‘money circulation scheme’. (Para 20)

It is suffice to say that it is not for Union of India or any Member of Parliament to interpret the provisions of any legislation- Statement given by the Union of India or its Officers that Multi-level Marketing does not attract the provisions of the Act cannot legalise an illegal act. (Para 21)

Grievance of the petitioners is that the petitioners are conducting conferences and lectures in order to propagate the scheme and they are under surveillance by the police, and this would amount to violation of the petitioner’s fundamental rights under Article 19(1) (a) and 19(1) (g)- This argument is not acceptable- It is true that they have the right to freedom of speech and expression and also to the freedom to carry on business- But, both the rights are subject to reasonable restrictions as contemplated under Articles 19(2) and 19(g)- The right to freedom of speech is subject to reasonable restriction on the ground of ‘public order’ and the right to freedom to carry on business is subject to reasonable restriction in the interest of ‘general pubic’. (Para 32)

Argument of the learned counsel for the petitioners that there is no promise of quick or easy money is not correct for the reasons stated above- Thus, the so-called Multi-level Marketing, though called by a very attractive name, squarely falls within the definition of ‘Money Circulation Scheme’ under the Act- Hence, it is prohibited by the Act- It is for the law enforcing authorities to take appropriate action- Writ Petition dismissed.

The High Court also stated that it is true that several companies including Multinational Companies carry on the business of the “Multilevel Marketing” and it is also true that the Executive and the law enforcing authorities keep a blind eye on such activities. This also does not make an illegal act legal. It is always a fact that the law enforcing authority would try to close the stable only after the horse had escaped.” (Para 22 ).

In this part of India, people are gullible and fall an easy prey to the tall promises made through the media. That was the reason why the lottery tickets were sold in large numbers in the State. Many companies want to exploit this attitude of people and float many schemes and lure the people to join the schemes. The petitioner is not entitled for direction for prohibiting the authorities from keeping surveillance over any meeting. Sec. 7 of the Act confers the right on the police officer to enter any premises, where he has got a reason to suspect that the premises are being used for purposes connected with the promotion or conduct of any prize chit or money circulation scheme in contravention of the provisions of the Act. (Para 33. ).

Why the world has been laughing at 'MLM' adherents: not laughing with them

Shyam

The most-successful comedians have always been able to stand back and see the world in multi-dimensional terms. However, intellectually-castrated cult adherents have been programmed to see the world only in two-dimensions: 'us (good) versus them (evil).' Consequently, it is impossible for the most-deluded cult 'heroes' to see humour in their self-righteous situation or to feel pity for, or to empathise with, non-adherents; particularly,'negative villains' who encourage the world to fall about laughing at cults, by explaining that these absurd groups are all pernicious games of make-believe controlled by essentially the same, paranoid fairy-tale.

As Robert FitzPatrick has wryly observed: 'If people are wondering why comedians have been able to see right through ('MLM') frauds, but most regulators and journalists have not, it is important to learn about the work of one key person in lobbying and public relations for 'Multilevel Marketing.' That national figure is the noted economist, 'Dr. Lasdwun N. Luzes.' He has been a popular speaker at 'Amway' meetings, a lobbyist for the 'Direct Selling Association,' a fierce critic of consumer protection and a fervent anti-regulation spokesman.http://www.falseprofits.com/files/e456896d800e5b2f9a93ba0daa433f1a-10.html

I, too, had hoped that, after the last US presidential election, 'Dr. Luzes’ disgraceful career would soon be over, but today (like a dead cat), he has bounced off the ground. He is apparently having new success in lobbying the dunces with diplomas at the Federal Trade Commission to reject common-sense requirements for full-disclosure by all 'MLM' racketeers, by claiming that honest disclosure is an unfair financial burden on business and that having to tell the truth could destroy public confidence in the entire 'MLM' industry. 'Dr. Luzes' significant, but nonetheless malignant, influence on the lives, liberty and happiness of millions of ordinary people around the world has remained generally unknown to the public, but he has also been widely-revered on Wall St.; particularly, amongst the senior policy-makers of the largest banks and mortgage companies, who (whilst the regulators looked the other way) introduced many of his ecomically-suicidal, closed-market theories.

It goes without saying that 'Dr. Luzes' was an inspiration to Bernard Madoff. However, 'Dr. Luzes' will probably not be called as an (implausible) expert defense-witness in a multi-billion dollar private prosecution against HSBC- a bank whose senior policy-makers evidently hid the truth about Madoff's 'Lasdwun N. Luzes'-inspired closed-market swindle and assisted him in the creation of a labyrinth of corporate structures around the world in order to commit fraud http://www.bbc.co.uk/news/business-11925132 .

Again, it goes without saying that senior officers of the UK Serious Fraud Office have (so far) found themselves unable to hold the directors of 'Madoff Securities International Ltd.' (a now-defunct, British-registered, counterfeit corporate structure, which was controlled by Bernie Madoff) to account http://news.bbc.co.uk/2/hi/business/8493364.stm .

A (humourless) spokesman for the SFO recently refused to make any comment on what was known by the Directors of his agency about the hidden role of 'Dr.Lasdwun N. Luzes' in the Madoff affair. This official did, however, assure me that the UK SFO would be happy to receive any information I hold about his activities.

David Brear (copyright 2010)

Americans have been laughing and crying at 'MLM' for years

Shyam

Robert Fitzpatrick has made a very wise point on his False Profits Blog.

Whilst most US law enforcement agents and mainstream journalists have preferred to ignore the ugly reality lurking behind so-called 'MLM Business Opportunities,' the US entertainment industry (particularly, comedy script-writers) has found a rich gold-mine of ready-made tragic/comic material to exploit.

http://www.falseprofits.com/files/3b548ad3770b29e7486685f7844eae2e-28.html#unique-entry-id-28 .

It should be particularly interesting for your free-thinking readers to observe how an average American television studio audience roars with laughter when the actor, Morgan Freeman (one of America's most-trusted voices) is asked by a chat-show host to read out the scripted-lie that people fall over themselves to buy 'Amway products http://www.colbertnation.com/the-colbert-report-videos/261286/january-11-2010/morgan-freeman .The reason for this, is that most people in America have had the deeply-embarrassing experience of meeting temporarily-deluded, but permanently-penniless, 'MLM' recruiters. It is public knowledge that these sad clowns all grin inanely and recite essentially the same implausible nonsense. However, comedy is also one of the best ways to try to explain the ultimate dangers of the 'MLM' virus to someone who has never encountered a chronic sufferer. For obvious reasons, many people find the idea unthinkable that a member of their own family, or a close friend, might suddenly undergo a nightmarish transformation and recklessly dissipate all their mental, and/or physical, and/or financial, resources to benefit of hitherto unknown 'MLM' bosses, whom they continue to trust and follow no matter what suffering this entails.

Before I encountered a deeply-deluded 'MLM' convert in my own family in Britain, I would not have believed that so many Britons could fall for such an old American lie, or that the lie could be peddled without a clear, public challenge to its authenticity by senior UK law enforcement agents and mainstream journalists. I must admit that, at first, I found it weird and amusing that an educated-adult had suddenly become totally-convinced that he had found the secret path to achieve his Dream of prosperity, freedom and happiness and that anyone trying to warn him that he was being cheated, was Stealing his Dream.

Unfortunately, 15 years later, I am still living with the tragic consequences of my brother falling under the control of a malignant fairy-tale spun by the billionaire bosses of a US-based, major organized crime group.

David Brear (copyright 2010)