Shyam
Your recent post demonstrates that attorneys acting for one of the reality-inverting corporate structures which forms the absurd group of Asian 'Amway' copy-cats known as the 'Indian Direct Selling Association,' are perfectly aware of what constitutes an illegal money circulation scheme as defined by Indian law. No matter how cleverly it is camouflaged, any centrally-controlled system of economic exchange without a significant, or sustainable, source of external revenue, is a swindle, because, no matter how you divide its finite internal revenue amongst its contributing participants, the overwhelming majority cannot hope to receive more money than they put in. The ill-informed participants in any closed-market have, in fact, been peddled infinite shares of their own finite money.
The way the 'Amway' grifters and their many copy-cats have dodged prosecution in the USA, and elsewhere, has been to pretend that illegal internal payments made by the victims of a closed-market swindle (in return for banal, overpriced and, therefore, effectively-unsaleable wampum) have been legal 'sales of good-value products to end users.' Notice how 'MLM' apologists never want to use the more-accurate term: authentic, external, retail transactions (i.e. sales to persons who are not under contract to the 'MLM' company or acting in connivance with a contractee).
In a criminal effort to make closed-market swindles dressed as 'MLM Business Opportunities' seem even more authentic, the various racketeers who have hidden behind fake 'Direct Selling' companies, and associations of fake 'Direct Selling' companies, have entered into voluntary agreements with the tax authorities of various countries in which they operate. Under these deceptive agreements, retail sales tax has been paid by the fake 'Direct Selling' Companies on illegal internal payments (disguised as legal 'sales') made by their victims. Obviously, no government is going to refuse tax payments.
Almost 10 years ago, I had a conversation about 'Enron' and 'Amway' with an amoral (fifty-something) American attorney who was working for a large US corporation in Europe. This was just when the 'Enron' scandal was breaking, and the clean-cut fellow was still assuming that 'Enron's' clean-cut senior officers, accountants and attorneys must all have technically been acting within the law in respect of the 'Enron corporate set up' - i.e. all the insolvent shell companies created to hide billions of dollars of trading losses, and maintain 'Enron's' share price. He did, however, concede that members of the 'Enron' Board of Directors might possibly have committed insider-trading fraud by dumping their own stock before the arificially-inflated 'Enron' share-price collapsed.
Remember, Shyam, in reality, due to a stack of failed deals and projects, overall 'Enron' was insolvent to the tune of billions of dollars, but to casual observers the main company appeared to be solvent and permanently-profitable to the tune of billions of dollars. Thus, countless ill-informed victims kept investing their cash in 'Enron's' steadily-rising, but effectively-worthless, shares. The reality-inverting 'Enron' controlling scenario was sustained by the creation of a mystifying labyrinth of more than 1000 (apparently independent) corporate structures which were all losing money hand over fist. In simple terms,'Enron's' catastrophic losses were off-loaded on to dummy businesses, only gains were publicly declared by 'Enron's' reality-inverting propaganda machine. When the truth finally began to appear, the stock price of 'Enron' quickly collapsed to around 60 cents (per individual share), finally leaving investors $11 billions out of pocket, but (knowing what was about to happen) 'Enron's' corrupt senior company rats had already abandoned their sinking ship carrying piles of its stolen treasure.
In the 'Amway' fraud, catastrophic losses have not been publicly declared by the various fake 'Direct Selling' companies which front it around the globe. However, over the decades, billions of dollars of accumulated losses have been suffered by the tens millions of constantly-churning participants in the 'Amway' closed-market swindle who have all been deceived into investing their cash in the steadily-expanding, but effectively-worthless, 'Amway Business Opportunity.' To prevent them from complaining, these ill-informed victims have been obliged to sign contracts in which they were arbitrarily, and falsely, defined as 'Independent Business Owners.'
In simple terms, just as in the 'Enron' scandal, the 'Amway' corporation has, due to its fundamentally unviable practises, overall been insolvent to the tune of billions of dollars, but to casual observers it has appeared to be solvent and permanently-profitable to the tune of billions of dollars. The reality-inverting 'Amway' controlling scenario has been sustained by the creation of a mystifying labyrinth of tens of millions of constantly-churning (apparently independent) businesses which have all been losing money hand over fist. Thus 'Amway's' catastrophic losses have been off-loaded on to dupes who were conditioned to believe that they were 'Independent Business Owners,' only gains have been publicly declared by 'Amway's' reality-inverting propaganda machine. When the truth began to appear in the USA at the end of the 1970s, the 'Amway' rats prevented their ship from being sunk by the US authorities by promising to mend it. They then sailed to fresh waters (first in Europe and now in Asia) in search of more dupes.
If it wasn't for the tragic results of the global 'Amway' racket, then it would be nothing more than a sick joke.
David Brear (Copyright 2010)
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