Saturday, 6 November 2010

Pokorny v. 'Quixtar' ('Amway'), = Reason v. Insanity

As you know, in 2007, a class action civil lawsuit was filed against 'Amway' in California, under the federal Racketeer Influenced Corrupt Organizations Act. Three directors and advisors of Pyramid Scheme Alert (including Robert Fitzpatrick) served as experts and consultants to the victims in this case. At first, 'Amway's' attorneys delayed proceedings (and incurred huge additional costs for the plaintiffs) by steadfastly pretending that the plaintiffs had no right to sue, because as the signatories of 'Amway' contracts, they had voluntarily accepted a 'binding (internal) arbitration agreement.' However, a Federal court ruled that the arbitration process was unenforceable and unfair. The judge said of 'Amway's' own parallel system of dispute resolution , 'the requirement …is substantively unconscionable, and exceedingly so,' and graphically described the contracts as a 'stacked deck' in'Amway's' favour.
The suit (which was filed by the firm of Boies, Schiller & Flexner) was finally allowed to proceed. It charged that 'Amway' deliberately misled consumers with false income claims, sold them overpriced products and marketing materials, and secretly transferred the lost investments of virtually all new recruits to a tiny few at the top, year after year. The suit accused 'Amway' of operating an illegal pyramid scheme and it argued that 'Amway's' main revenue source is ultimately its own so-called 'sales force,' since the company has little retail sales and few retail customers. Thus, 'Amway's' real product is a fake 'business opportunity' generating huge illegal profits through the recruitment of ill-informed consumers to invest in a reality-inverting swindle promoted as a viable 'business opportunity.' The suit clearly explained that the overwhelming majority of 'Amway' recruits do not not make sales to the general public in an open market. Therefore, 'Amway' operates as a closed-market, dooming, by its 'endless chain' design, virtually all who join at the bottom, year after year.
This week it has been announced that 'Amway's' attorneys have halted the suit by agreeing to pay victims and cover litigation costs amounting to over $55 million in cash and goods. A judicially administered fund will pay refunds to two classes of victims, those who joined 'Amway' and quit within a year (usually paying only initial fees) and another group of those who stayed in longer (and lost much more). Another $50 million will be paid in other costs incurred by 'Amway' to meet the terms of the settlement. Under terms of the settlement, 'Amway' will also stop advertizing misleading income claims. In total, halting the suit will cost the billionaire bosses of the 'Amway' mob just $155 millions
In the usual terms of class action settlements, the billionaire bosses of the 'Amway' mob have admitted no guilt. Laughably, however, they have volunteered to pay back a fraction of what they have stolen, lower the fixed-prices of their effectively-unsaleable wampum and increase the 'refund period' on it, pay all the victims' court costs and give them free wampum.'Significant changes' are also to be made in the so-called 'tools business.'
To date, US federal law enforcement agents are nowhere to be seen, the reality-inverting 'Amway' propaganda machine is already in full swing and it's crooked business as usual for the self-appointed rulers of the American kleptocracy, but what conclusions are the Indian authorities going to draw from Pokorny v. 'Quixtar' ('Amway')?
Indeed, in the light of this (and other) evidence, what possible justification could any democratic government put forward for allowing this gang of US-based racketeers, and their many copy-cats, to continue to steal from the public ?
David Brear (Copyright 2010)


corporate frauds watch said...

The silence is deafening. React and say something even if it stupid enough, Amway apologists.

Anonymous said...

I am a former Amway IBO, and everything you say about them is true. 99% of IBO's don't make any money. As an American I am ashamed my government allowed such a company to exist. The FTC has been bought off by Amway. I hope the officials in your nation are more honest and hold Amway responsible. And if any prospect or IBO reads this-get out while you still have your dignity