All MLM companies are pyramid frauds

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By chance, a witness to (but not a participant in) my recent discussions with the relatives of destitute 'USANA' victims, was a typical 21st century businessman (the joint-owner of a medium size private company which manufactures products in China to be sold world-wide for a profit, first to independent businesses, who then retail them on to the public for another profit). This cosmopolitan fellow was asked what he knew about 'Direct Selling' or 'Multilevel Marketing.' Classically, without access to any quantifiable evidence, he assumed that all businessmen/women are controlled by commercial regulators and that criminals are controlled by law enforcement agents, so, since various 'MLM' companies continue to operate quite openly without their owners being incarcerated, 'MLM' must be just as it has been presented; i.e. an alternative form of retailing where manufacturers (like himself) first sell products for a profit to networks of representatives who then sell these products on to the public for another profit. He further reasoned that, as selling often involves lying (or at the very least hiding the truth), 'MLM' owners and their sales representatives could be telling lies without necessarily committing fraud.

At this point in the conversation, I showed the businessman the recent 'Penn and Teller's Bullshit' episode entitled 'Easy Money.' When it was clearly explained to him that (for the previous 50+ years) all so-called 'MLM' companies have maliciously occulted the fact that they have had no significant, or sustainable, external revenue, and that the overwhelming majority of so-called 'MLM sales' have only been between a succession of counterfeit 'Direct Selling' companies (based on the 'Amway' original) and countless millions of their own (constantly-churning) insolvent representatives, he was truly astonished.

It is sad to reflect, but often, when it is explained how it works and how much cash it has generated for a few racketeers, persons who have not been directly effected by pyramid fraud dressed up as 'Direct Selling,' are almost in admiration of it. In reality, this hidden organized-crime phenomenon continues to cause serious damage not only to communities, families and individuals, but also to the world-economy.

David Brear (copyright 2010)