Jeevanseva or Ram Survey so many copycats of Amway on prowl

One of our readers Naresh from Kakinada wants to know whether Ram Survey, Jeevanseva and Forever Living Products are legitimate business houses. All the three are bogus companies. While Ram Survey is based in Mirzapur of Uttar Pradesh, India, Jeevanseva is based in Hyderabad. Both are indulging in money circulation scheme in the guise of products just like Amway India. There is hardly any difference.

One has to pay Rs. 625 to join in Jeevanseva and purchase products like Ganocoffee, Ginseng, Noni and others. On enrollment and purchases by downline members you would get commission.

Ram Survey is on the lines of Speakasiaonline, a survey company. One has to pay Rs. 3500 to become a member and one would be paid Rs. 500 every week for filling up survey forms. The members would be paid commission on enrollment of new members. No need to say that it is also a scam.

Forever Living Products is one of the members of Indian Direct Selling Association (IDSA) which was founded by Amway India. It also promotes a money circulation scheme in the name of selling aloe vera products at exorbitant price and encourages to enroll more members offering commission on their sales.

All these companies are copycats of Amway and are looting the gullible all over India and worldwide.

They always come out with new names and new product and services. Let us not fall prey for easy and quick money and the bite the bait with 'good business opportunity'. 

'Sai Baba's' Golden Calf was made from his followers' own gold

Shyam

I was wondering when we would receive a comment in defence of the billionaire cultic racketeer who styled himself as 'Sai Baba'. 

The person, 'Bachan,' who very politely has challenged the authenticity of my rational article on 'Sai Baba' has told us nothing that we did not know already. Indeed, this person's evident lack of critical and evaluative faculties, is further evidence proving the accuracy of my analysis.  

In the end, the verdict on 'Sai Baba' hangs on one simple question: 

Was Sathyanarayana Raju a.k.a. 'Sai Baba,' really a superhuman who had the power to create matter from nothing, or was he just another manipulative charlatan who had the power to castrate people's critical and evaluative faculties, and part them from their money, using co-ordinated devious techniques of social, psychological and physical persuasion which gave his victims the illusion that they were making a free-choice? 

Simple logic would suggest that if 'Sai Baba' really had been a 'God,' then such an omnipotent fellow would not have needed to take his followers' cash or buy anything, he could have just produced what he required out of thin air. 

In the 'Bible,' a story is told of how Jesus fed 5000 people with only enough food for a family picnic, and how there were baskets of left-overs. The point being, that all Jesus asked his followers for in return for this miraculous feast, was their unquestioning belief. The 'Bible' does not describe Jesus as receiving cash payments from his followers. The 'Bible' also describes 'Aaron, the brother of the 'Prophet Moses,' making an illusory idol, a 'Golden Calf,' out of the Children of Israel's own gold, and then bedazzling them with it. 

When looking at cults and frauds, it must be remembered that a counterfeit banknote might be 99.9 % perfect, but the bit that is not makes all of it a fake. I have taken the time to study the life and times of many demagogues, cult instigators and charlatans. I looked at their own versions of reality, and at independent sources. I came to inescapable conclusion that pernicious cults are instigated and ruled by psychologically dominant individuals, and/ or bodies of psychologically dominant individuals (often with impressive, made-up names, and/ or ranks, and/ or titles), who hold themselves accountable to no one. These individuals have severe and inflexible Narcissistic Personalities (i.e. they suffer from a chronic psychological disorder, especially when resulting in a grandiose sense of self-importance/righteousness and the compulsion to take advantage of others and to control others’ views of, and behaviour towards, them). They steadfastly pretend moral and intellectual authority whilst pursuing various, hidden, criminal objectives (fraudulent, and/or sexual, and/or violent, etc.). The admiration of their adherents only serves to confirm, and magnify, the leaders’ strong sense of self-entitlement and fantasies of unlimited success, power, brilliance, beauty, ideal love, etc. 

‘Narcissistic Personality Disorder,’ is a psychological term first used in 1971 by Dr. Heinz Kohut (1913-1981). It was recognised as the name for a form of pathological narcissism in ‘The Diagnostic and Statistical Manual of Mental Disorders 1980.’ Narcissistic traits (where a person talks highly of himself/herself to eliminate feelings of worthlessness) are common in, and considered ‘normal’ to, human psychological development. When these traits become accentuated by a failure of the social environment and persist into adulthood, they can intensify to the level of a severe mental disorder. Severe and inflexible NPD is thought to effect less than 1% of the general adult population. It occurs more frequently in men than women. In simple terms, NPD is reality-denying, total self-worship born of its sufferers’ unconscious belief that they are flawed in a way that makes them fundamentally unacceptable to others. In order to shield themselves from the intolerable rejection and isolation which they unconsciously believe would follow if others recognised their defective nature, NPD sufferers go to almost any lengths to control others’ view of, and behaviour towards, them. Currently, NPD has nine recognised diagnostic criteria (five of which are required for a diagnosis): 

has a grandiose sense of self-importance.

is preoccupied with fantasies of unlimited success, power, brilliance, beauty, ideal love, etc.

believes that he/she is special and unique and can only be understood by other special people.

requires excessive admiration.

strong sense of self-entitlement

takes advantage of others to achieve his/her own ends

lacks empathy.

is often envious or believes that others are envious of him/her.

arrogant disposition. 

Pernicious cults can be of any size, duration and level of criminality. They comprise groups, and/ or sub-groups, of previously diverse individuals bonded by their unconscious acceptance of the self-gratifying, but wholly imaginary, scenario that they alone represent a positive or protective force of purity and absolute righteousness derived from their leadership’s exclusive access to a superior or superhuman knowledge, and that they alone oppose a negative or adversarial force of impurity and absolute evil. Whilst this two-dimensional, or dualistic, narrative remains the adherents’ model of reality, they are, in effect, constrained to modify their individual personalities and behaviour accordingly. 

The leaders of the most-destructive cults are megalomaniacal psychopaths (i.e. suffering from a chronic mental disorder, especially when resulting in paranoid delusions of grandeur and self-righteousness, and the compulsion to pursue grandiose objectives). The unconditional deference of their deluded adherents only serves to confirm, and magnify, the leaders’ own paranoid delusions. This type of cult leader maintains an absolute monopoly of information whilst perpetrating, and/ or directing, evermore heinous crimes. They sustain their activities by the imposition of arbitrary contracts and codes (secrecy, denunciation, confession, justice, punishment, etc.) within their groups, and by the use of humiliation, and/ or intimidation, and/ or calumny, and/ or malicious prosecution (where they pose as victims), and/ or sophism, and/or the infiltration of traditional culture, and/ or corruption, and/ or intelligence gathering and blackmail, and/ or extortion, and/ or physical isolation, and/ or violence, and/ or assassination, etc., to repress any internal or external dissent. 

It would seem that Sathyanarayana Raju a.k.a. 'Sai Baba,' and his unquestioning followers, perfectly fit these profiles. 

David Brear (copyright 2011)

US Presidents Grant and Clinton both appeared to endorse major frauds

Shyam

This latest, vile little swindler, Abhay Gandhi, is just a symptom of a much more dangerous cancer which has been allowed first to gnaw its way (largely-undetected) into the USA, and is now being allowed to do the same thing in India. 

The Old Testament of the Bible contains many phrases which have passed into common usage. In Chapter One of the Book of Ecclesiastes we find: 

'What has been will be again and what has been done will be done again; there is nothing new under the sun.'

This piece of generalized wisdom is not strictly accurate in respect of fraud, since age-old frauds have evolved to keep one step ahead of victims, legislators and law enforcement agents. Having said that, the essential crime of stealing money by lying to people, never changes; whilst fraud victims, law enforcement agents and legislators never seem to evolve.

One particular type of fraud popularly-known as a 'Ponzi scheme' or 'pyramid scam' (but which should be more-accurately defined as a premeditated closed-market swindle) underwent a significant change in the USA immediately after WWII. This dangerous evolution (although clearly-identified by many honest, and intellectually rigorous, observers), has never been fully-recognized by less-than intellectually-rigorous, and/or dishonest, US regulators at the US Federal Trade Commission. Today, we have unsustainable pyramid scams, still camouflaged as 'investment opportunities,' and apparently sustainable pyramid scams, now camouflaged as 'business opportunities', but which have been insidiously designed to blame and silence their victims. However, in the end, no pyramid scam is sustainable, because what can be devised by a human mind can always be deconstructed by another one. Using their front group known as the 'Direct Selling Association', various 'business opportunity' frauds have managed to infiltate traditional American culture to a degree which makes the bosses all other organized crime groups look like a bunch of rank amateurs. When he was still in office, apparently in complete ignorance of reality, former US President Bill Clinton (a qualified attorney), made a shameful video promoting a form of major organized fraud http://www.youtube.com/watch?v=X_eGbfTPbGY  

It is my stated opinion that (given the lesson of history) any beneficiaries of major organized fraud judged to be of a sufficient scale to represent a significant threat to democracy and the rule of law, should not be treated as common thieves. It should never be forgotten that one of the main factors which helped the rapid rise of 'Nazism'in Germany was the 'Great (world economic) Depression' which was triggered by the Wall St. Crash of 1929, which itself was caused by massive political corruption and chronic regulatory failure in the USA. The Wall St. Crash led to the creation of the US Securities and Exchange Commission, but this huge federal government agency has lately taken the short-sighted approach that too much regulation is bad for business. A much more intelligent, and cost-effective, approach would be to try to recognize, and stop, 'investment' frauds, before they grow to titanic proportions. 

US regulators claim to understand 'investment' frauds, but they completely failed to investigate, let alone detect, Bernie Madoff; apparently, because his victims did not complain for decades. In the end, Madoff gave himself up to the FBI and confessed that he had been running a titanic Ponzi scheme without any external profits, and that he hadn't actually been investing his victims' money as he had pretended in many thousands of counterfeit 'account statements'. In the end, Madoff controlled assets of around $ one billion, but his company had liabilities of more than $50 billion. Many years previously, it would have been a simple matter for US regulators to have discovered what Madoff was doing, had they taken the trouble to look. Unfortunately, the lawyers at the SEC with the responsibilty to investigate 'investment' frauds in the USA, wouldn't know a Ponzi scheme if it fell on their heads. Indeed, 'investment' frauds were rife in the USA long-before Mr. Ponzi came on the scene in the 1920s or Mr. Madoff in the 1960s. Unfortunately, SEC lawyers have not been obliged to make any study of this ongoing historical phenomenon.  

During the early 1880s a vile little swindler called Ferdinand Ward infiltrated the family of former US President Ulysses Grant, and created - along with the former President's son (a qualified attorney) a 'brokerage business' called 'Grant and Ward.' The former President invested all his own capital, $200 000, in his son's new venture and became a limited partner. In reality, the Grant family were naive and honest fellows, but Ferdinand Ward spread rumours to the contrary and attracted a large number of greedy 'investors' who believed that their money would be quickly multiplied by placing it only in companies about to receive vast and profitable US government contracts which the Grant family influenced. Ferdinand Ward also used the same story to borrow heavily from a bank. Ward simply took all this cash and invested it without any real knowledge and secretly made disastrous losses, but (like Ponzi and Bernie Madoff forty years and century later) he kept cool, paying his 'investors' fake 'dividends' and issuing fake 'account statements.' In this way, Ward kept attracting more funds. After almost three years without the slightest investigation, because there were no complaints (and because the former President and his son were his partners), the supply of fresh cash finally dried up and Ferdinand Ward tried to abscond. He was arrested, charged with, and convicted of theft and given ten years in prison. Ward's counterfeit 'brokerage business' was found to have less than $70 000 assets, but liabilities of almost $17 millions. The former President hadn't got the beginnings of clue what had been going on. Ward had even persuaded Ulysses Grant to borrow $150 000 on his behalf the day before he tried to abscond.  

http://online.wsj.com/article/SB122948144507313073.html  

David Brear (copyright 2011)

YouTube - Videos from this email

Yet another economic alchemist vanishes with piles of stolen cash

Shyam

Ponzi schemes have been a growing problem in Ahmedabad. This week it was reported that thousands of gullible people there have been attracted to one such scheme called 'AISE Capital.'

It will come as no surprise to your free-thinking readers that the instigator has now vanished taking his victims' money.http://www.dnaindia.com/money/report_has-ponzi-scheme-promoter-fled-with-rs500-crore-investors-hassled_1536322

'AISE Capital' was created by Abhay Gandhi about one year ago. Without a full-explanation, this unoriginal crook claimed that if you gave him your cash, he would double it in three months. Typically, AbhayGandhi paid out a few early participants and offered them fat commission payments for recruiting new 'investors.' His four offices have now been shut or left in the hands of innocent staff. Abhay Gandhi has not been seen for a week. It is suspected that he has fled to Bangkok with Rs500 - Rs700 crore.

Just before he absconded, in a manoeuvre worthy of 'Sai Baba,' Abhay Gandhi ran a 'seminar' for his followers where he gave away Rs1,000 of gifts to each of over 500 people. However, it cost Rs1,350 each to get in.

David Brear (copyright 2011)

'Man is the only animal that can remain on friendly terms with the victims he intends to eat, until he eats them'

Shyam

I observe that an intellectually-castrated comment in defence of the 'business opportunity' fraud known as 'Club Asteria,' has been sent by someone signing himself/herself as 'kalinou03.'

This person writes in French and, without any supporting evidence, accuses us of being motivated by jealousy and of not criticizing low-wage exploitation. We are then asked why are we criticizing something which gets people to dream? a question which is immediately answered for us: because the money is not being reserved for an elite.'Kalinou03' finally describes the 'Club Asteria'  fraud as a superb business which helps the poor. 

Years ago, I attended a conference on cultism in the USA organized by the Leo J. Ryan Foundation. I can remember being involved in a conversation with well-meaning fellow who confidently insisted that groups like 'Amway' and 'Herbalife' might be frauds, but they can't be described as cults, because they offer people hope of a better future on Earth rather than in Heaven. 

This answer to this specious argument remains the same: 'MLM business opportunity' frauds are most-certainly cults, because their instigators have peddled false hope in the form of a fictitious future Utopian existence which they have presented as fact in a never-ending stream of over-priced publications, recordings and live performances. Tellingly, in 'business opportunity' cults, Utopia has always first to be visualized then built by the adherents' themselves using their own time, effort and money, but duplicating a precise mathematical plan of recruitment and self-consumption over a specific period of time (usually, 2-5 years). Consequently, when Utopia fails to materialize, it is always the fault of the selfish individual adherents: never the fault of group's proven plan or its selfless leaders.

Abusive totalitarian cults which peddle the illusion of Heaven on Earth have always existed. The phenomenon remains the same. However, its reality-inverting camouflage can be adapted to fit the spirit of the age. Today's 'business opportunity' cults are essentially no different to the 'fascist' and 'Bolshchevik' cults of the last century, the narcissistic leaders of which gathered huge fortunes for themselves by peddling a fictitious future Utopian existence for everyone which they presented as fact in a never-ending stream of over-priced publications, recordings and live performances. The overwhelming majority of their enthusiastic customers were actually reduced to the position of powerless serfs in a latter-day feudal system. Ultimately, tens of millions of these unquestioning sheep were slaughtered. 

I would advise anyone who wants to understand any 'business opportunity' cult, to read George Orwell's satire of the reality-inverting 'Soviet' system, 'Animal Farm.'

David Brear (copyright 2011)

Threats won't work with Corporate Frauds Watch

A person has been trying to intimidate the authors of this Blog in a criminal attempt to silence the truth. This person, who signs himself/herself as 'Ajay,' lives in Ghaziabad, New Delhi. He/she has already posted a couple of comments threatening me with dire consequences if I continue to challenge the authenticity of the 'NMart' fraud. 'Ajay's' address is M/s Compark e-services private limited, A-320, 3rd Floor, Durga Tower, Raj Nagar District Centre, Ghaziabad, New Delhi PIN-201001.

If this foolish person continues to post threats, the police will call on him immediately.

If 'Ajay' wants his/her comments accepted on Corporate Frauds Watch, then he/she must first understand our view  that the attempt to control information about their hidden crimal objectives,  is one of the tactics used by corporate racketeers and their criminal associates.

The cultic racketeer, Sathyanarayana Raju a.k.a 'Sathya Sai Baba,' is dead

Shyam

Many of your free-thinking readers will be aware that Sathyanarayana Raju a.k.a. 'Bhagawan Sri Sathya Sai Baba,' one of the world's most-absurd, but nonetheless wealthy, cultic racketeers, has just died aged eighty-five. Yet in 2011, this chronic sexual pervert and mythomaniac was listed as one of the '100 most spiritually influential people in the world.' He was also described by his unquestioning adherents (and sadly, some less-than-intellectually-rigorous journalists) as an 'avatar, godman, spiritual teacher and miracle worker'. In the adult world of quantifiable reality, the apparent materialising of vibhuti (holy ash) and small valuable objects such as rings, necklaces and watches from thin-air, was the only evidence to support Sathyanarayana Raju's own narcissistic claim to be the product of an 'immaculate conception,' the 'divine reincarnation of the 19th century spiritual guru, Sai Baba of Shirdi (whose teachings were a blend of the traditional Hindu and Muslim faiths).'

Sathyanarayana Raju was born in Puttaparthi, Andhra Pradesh. In a career spanning six decades, he steadfastly pretended absolute moral and intellectual authority whilst pursuing various hidden criminal objectives (mainly fraudulent and sexual). When challenged, he hid behind an aggressive echelon of attorneys and successfully avoided conviction. At the same time, he acquired control over a capital sum estimated in billions of $US, part of which was used to establish reality-inverting schools and colleges, hospitals, and other 'charitable institutions' in India and around the globe (the value of which may be as high as Rs. 40,000 crore or $US 10 billions). His total number of adherents was estimated in 1999 to be approximately six millions, but in his own grandiose fantasies he imagined that he had tens of millions of followers and that the one day, all humanity would follow him. Typically, 'Sai Baba,' created, and controlled, a mystifying labyrinth of corporate structures pursuing lawful, and/or unlawful, enterprises. This shifty structure, which is commonly referred to as the 'Sathya Sai Organization', prevented, and diverted, investigation and isolated its billionaire boss from liability. Today, what should have long-since been identified as a major organized crime group, comprises a wheel of around 1200 'Sathya Sai Baba Centers' in 114 countries, all of which have been feeding cash and intelligence back to the organization's central hub.

In India itself,  the 'Sathya Sai Organization' draws its adherents, and funding, mainly from well-educated upper-middle-class, urban sections of society. Sadly, the abusive charlatan and pervert who called himself ''Sai Baba,' was a national figure in India. He presented his sleight-of-hand stage-magic tricks as 'miracles' to flocks of wide-eyed spectators, including celebrities, presidents and prime ministers (some of whom became his unquestioning adherents). In 2002, this obvious crook claimed to have followers in 178 countries.

In his lifetime,'Sai Baba,' posed a real threat to democracy and rule of law in India. Even after his death, this threat has not gone away; for although widely-exposed by the Indian, and international, press as a charlatan, he enjoyed the protection of some of the most-influencial people in India. In December 2001, Atal Bihari Vajpayee (then Prime Minister of India), P.N. Bhagawati (Former Chief Justice of the Supreme Court of India), Ranganath Misra (Chair Person, National Human Rights Commissioner of India and Former Chief Justice of the Supreme Court of India), Najma Heptulla (President of the Inter-Parliamentary Union; UNDP Distinguished Human Development Ambassador) and Shivraj Patil (Member of Parliament, India; Formerly of the Lok Sabha & Union Minister) all put their signatures to the following, terrifying denial of reality.

'We are deeply pained and anguished by the wild, reckless and concocted allegations made by certain vested interests and people against Bhagawan Sri Sathya Sai Baba. We would normally expect that responsible media would ascertain the true facts before printing such calumny – especially when the person is revered globally as an embodiment of love and selfless service to humanity. Since this professional ethic has not been observed by a section of the media, we have elected to go public with this signed statement.'

http://www.youtube.com/watch?v=_BVEJDPrGpM&feature=related

http://www.youtube.com/watch?v=i-Ajawd59RM&feature=related

http://www.youtube.com/watch?v=Ag93TX6DI0w&feature=related

http://www.youtube.com/watch?v=CROnyK2fzcs&feature=related

http://www.youtube.com/watch?v=1PHsxBEYI9g&feature=related

http://www.youtube.com/watch?v=6Q4M2raOwPI&feature=related

http://www.youtube.com/watch?v=mGZ3Bdjvg3I&feature=related

David Brear(copyright 2011)

Corporate Frauds Watch is Pro-Truth

A wise friend of mine has suggested that Corporate Frauds Watch should adopt the famous, classical proverb, 'Fama, malum qua non aliud velocius alium,' as our motto. This translates as:

 'No other evil travels faster than a rumour,'

 and roughly corresponds to the well-known proverb: 

'A lie will go round the world while the truth is pulling its boots on.'

Many of our new readers should be aware that Corporate Frauds Watch has been helping the truth to pull its boots on by warning ill-informed people, particularly in the Republic of India, about the dangers of all-manner of frauds hidden behind counterfeit corporate structures. Currently, a plague of effectively-unregulated money circulation schemes or closed-market swindles (and related advance fee frauds) dissimulated as  'lawful MLM business opportunities' has been allowed to infect the minds of millions of people in the world's largest democracy, and the problem is getting steadily worse. One Trojan Horse corporate structure known as 'Amway India Enterprises' currently claims 450 000 adherents in India and is probably churning around quarter of a million people annually. This is despite the fact that it has been clearly identified by senior Indian Judges as being in breach of Indian legislation banning all money circulation schemes based on the specious theory of endless-chain recruitment (no matter how cleverly these frauds might be camouflaged). In order to establish their pernicious 'MLM' racket in India, agents of its US-based billionaire bosses persuaded wide-eyed, and/or corrupt, Indian government officials to accept the lies that their proposed 'direct selling' company would recruit non-salaried commission agents who would respect the law and retail products and services to the Indian public for a profit and that various 'Amway' companies have been operating lawfully all over the world for decades. When, as a result of complaints, well-informed and honest Indian police officers began to investigate 'Amway India Enterprises' (closing its offices in Andhra Pradesh and making several arrests), attorneys filed a malicious reality-inverting writ against the Indian police on the grounds that 'Amway's 50 year old business plan' has been approved by well-informed Indian government officials and, consequently, the ill-informed Indian police had no right to interfere. Laughably, it was this attempt to pose as the innocent victim under attack which led to the counterfeit company's clandestine criminal purpose being identified by senior Indian Judges.

Recently, Corporate Frauds Watch has been receiving a string of perplexing, and dangerous, comments from an American reader, Kasey Chang, who runs a Blog challenging the authenticity of just one closed-market swindle (and related advance fee fraud) dissimulated as a 'lawful MLM business opportunity' known as 'TVI Express'. This unoriginal cultic fraud is apparently controlled by an Indian, Tarun Trikha. Corporate Frauds Watch made the mistake of assuming that, due to his insightful analysis of the 'TVI Express' lie, Mr. Chang must also be an authority on the'MLM' lie in general. However, we quickly discovered that, far from comprehending the true nature and scale of this global, criminogenic phenomenon, Mr. Chang is just another wide-eyed observer who cannot see that a lie is a much harder matter to fight when it is in part a truth, or that anyone who looks at an illusion with misplaced objectivity, effectively becomes part of that illusion. On another of his Blogs, Mr. Chang made suggestion that our wider-analysis of 'MLM,' is little more than a 'conspiracy' theory. This immediately attracted the attention of the unmasked 'Amway' Lord Haw Haw, Mr. 'IBOFB' Steadson, who made the typically-outrageous, false and defamatory statement that I am a 'certifiable loon' and that you, Shyam, are a member of my 'little anti-Amway cult.' 

In one particularly misleading and dangerous comment posted on Corporate Frauds Watch, Mr. Chang said: 

'Frankly, I have NO position on Amway. It has been operating legally in the US (and elsewhere) for DECADES. What Amway does in INDIA, frankly, is none of my business. I have not studied Amway in any way, shape, or form, except peripherally as part of studying up on TVI Express, and how TVI Express scam CANNOT be multi-level marketing. As Amway basically defined what is legal MLM in the US, I know it "somewhat", nowhere well enough to defend against Mr. Brear's tirade that essentially said "you're either with us (i.e. against Amway) or against us" ' 

In some recent posts, we have clearly explained that, in 1979, the bosses of 'Amway' were discovered to have been breaking the law in the USA during three decades (generating millions of dollars of illegal profits), but that they were given a free-hand to expand their criminal enterprise (and to generate billions of dollars of illegal profits all over the globe) when a US federal Judge naïvely accepted 'Amway's' attorney's and employees' empty promise that, henceforth, the company would respect the law and regulate its own, previously unlawful, enterprise. Similarly, in 2008 and 2009, the UK High Court and Appeal Court judged 'Amway UK Ltd.' to have been operating illegally in the UK for 34 years, but they allowed the company to remain registered in the UK without penalty or independent surveillance, when its attorneys and employees promised that, henceforth, the company would respect the law and regulate its own, previously unlawful, enterprise.  However, the USA and the UK are not the only countries where the 'Amway' bosses have been caught red-handed, but have escaped prosecution by following these effective tactics. 

In reality, these tactics are part of an overall pattern of ongoing, major racketeering activity (as defined by the US federal Racketeer Influenced and Corrupt Organizations Act, 1970). 

David Brear (copyright 2011) 

'You can fool all of the people some of the time, and some of the people all of the time... '

Shyam

In order to explain our attitude towards Kasey Chang, it is important for your free-thinking readers to understand how 'MLM business opportunity' frauds have infiltrated traditional culture to a point where even critics believe that they might be dangerous, and/or pointless, but they are not necessarily unlawful. Sadly, Mr. Chang is the living proof of this.

In reality, in 1979, the 'Amway' racketeers were not judged or punished for what they had actually done in the USA. Unbelievably, they were judged on the basis of what their attorneys and employees claimed (and most probably believed) they would do in the future in the USA. Even more unbelievably, in 1979, no independent instrument was created by US regulators to monitor the 'Amway' racketeers' subsequent activities or those of any charlatans who might copy them. 

Thirty years later, the 'Amway' racketeers were yet again caught red-handed (this time in the UK) operating exactly the same dissimulated pyramid scheme, yet again they employed the same effective tactic to avoid being held fully to account. In 2009, after having been neither judged nor punished for what they had actually done in Britain during 34 years, but on the basis of what their attorneys and employees claimed (and most probably believed) they would do in the future in Britain, the 'Amway' racketeers were given a free-hand to pretend that that they have been fully-investigated and declared lawful in the UK. This grotesque distortion of reality is now being used as a false-justification for them to continue their profitable criminal activities elsewhere; particularly, in India. 

At the end of January 2009, the following brief article appeared in the tabloid British national newspaper, 'The Daily Mirror'.

'Multi-million pound marketing group Amway (UK) Limited has today escaped being shut down.

The government wanted Amway (UK) put into compulsory liquidation in the public interest, claiming it was unlawfully trading and running an illegal lottery - effectively, a pyramid scheme.

Trade Secretary Lord Mandelson said it was selling "unachievable dreams", but his argument was unanimously rejected by three Appeal Court judges.

Lord Justice Rix sitting with Lord Justice Toulson and Lord Justice Rimer said Amway had been operating in the UK for 30 years and had an annual turnover of up to £13 million.

It sold goods such as cosmetics, cleaning products, jewelry and dietary supplements through independent business operators, who in turn recruited other operators.

The Trade Secretary acted to shut down the company following complaints that it failed to supervise the marketing tactics used by the independent operators.

When the case came before the High Court last June, Amway (UK) promised to clean up its act with a new business plan with tighter controls.

The judge Mr Justice Norris said under the old plan independent operators had misrepresented their own income and were "selling a dream" with people who bought into that dream being deceived about how much they could earn.

While he found they had been trading unlawfully he accepted Amway's undertakings to impose tighter controls and refused to wind up the company.

On appeal the Trade Secretary said the judge had been wrong to refuse to wind up a company which had been guilty of past misconduct, and that it was wrong for the High Court judge to accept promises of better behaviour from the company when the Government hadn't accepted the same promises.

Lord Justice Rix, in dismissing the Government's appeal, accepted that the Trade Minister "seeks to act in the public interest" but ruled that in this "unusual, indeed exceptional case" the original High Court judge had been right.'

What was, and could not be explained within the confines of this article (written by hard-pressed journalists), was that, prior to any case being filed, UK government regulators had removed truck loads of documentary evidence from the HQ of 'Amway UK Ltd.' These extraordinary documents revealed, that during the period 2006-2007, around 35 000 UK citizens had been under contract to 'Amway UK Ltd,' only a small percentage had received any payments from the company whilst effectively none of them were showing an overall trading profit from the operation of a so-called 'Amway business', because they were not selling a majority of products and services to the public. Furthermore, the previous numbers of contractees, coupled with the mean annual drop-out rate (in excess of 50%), revealed that, since the so-called 'Amway business opportunity'  first arrived in Britain in 1972, around one million UK citzens had been churned through it. Contrary to what the UK High Court and Appeal Court Judges said, the figure of £13 millions actually represented the largest quantity of cash to have flowed into the 'Amway' closed-market swindle during a 12 month period. Without significant and sustainable retail sales of products and services to the public for a profit, for more than 30 years, the only real cash circulating in the 'Amway UK' system had always come largely from the constantly-churning, insolvent UK participants. The UK judges made this gaff due to the fact that 'Amway UK Ltd.' had been allowed to pay VAT (i.e. retail sales tax) to the UK government on unlawful internal payments received from its non-salaried commission agents (in exchange for effectively-unsaleable products and services). In other words, of the £13 millions which was once paid into the 'Amway' closed-market in a 12 month period, the UK tax man pocketed almost £2.5 millions. Thus, the UK government was itself a major benficiary of a what the UK High Court and Appeal Court judged to be an unlawful trading scheme.

Today, so-called 'MLM' companies registered in the UK are still allowed to pay VAT on internal payments received from their non-salaried commission agents (in exchange for effectively-unsaleable products and services), whilst no independent mechanism exists in the UK to monitor what is actually happening in any so-called 'MLM company', including 'Amway UK Ltd.' The UK government will only launch a civil investigation into any individual company if significant numbers of complaints are received. 

Meanwhile, the overwhelming majority of 'MLM' victims continue to remain silent in the UK, and elsewhere, because they have been conditioned to believe that they were involved in a lawful business opportunity. Furthermore, it is a well known fact that very few people can accept that they were the victims of a fraud. 

David Brear (copyright 2011)

The only real money flowing into 'MLM' has come from its participants

Shyam

Although he probably will continue to deny it, the resident, Corporate Frauds Watch comedian, Mr. Kasey Chang, has returned yet again with a string of laugh-a-minute oxymorons and paralogisms, but which he firmly believes are rational arguments.

I am seriously beginning to think that no genuine person can possibly be as obtuse as Mr. Chang. We have encountered some pretty inflexible characters on Corporate Frauds Watch, but Mr. Chang is perhaps the most perplexing. He continues to prove himself to be incapable of expressing himself in clear unambiguous English, and to be equally incapable of understanding our thoughts, no matter how clearly these are expressed. Yet he insists that what he says is perfectly clear and that it is ourselves who are not making our thoughts clear.

The funny little fellow is now offering me his fatherly advice how to conduct a debate, even though (quite obviously) I have not been addressing him directly, let alone conducting a debate with him. 

In brief, Shyam, Mr. Chang keeps saying that he knows nothing about 'Amway' and that, consequently, he has no opinion to offer on 'Amway', but, in the same breath, he then keeps repeating the simplistic, and dangerous, opinion that the 'business opportunity' which has been offered by the corporate structure known as 'Amway Inc.' (in the wake of a 1979 US Federal court ruling), is legal (in the sense of lawful) in the USA, because it offers rewards to its participants for retailing products and services to the public rather for recruiting more and more participants, ad infinitum.

Mr. Chang also keeps repeating the reality-inverting word 'ethical'

Over many months, in a series of highly-detailed articles and analyses, we have clearly set out our position (a well-informed and intellectually-rigorous position) which renders Mr. Chang's ill-informed and simplistic opinion totally invalid. Although he refuses to accept his error of logic, Mr. Chang's recent questions refer to a fiction as though it is fact. 

No matter how many times we explain, Mr. Chang apparently cannot see that, exactly like Bernie Madoff, the billionaire bosses of  the cultic group arbitrarily defined as 'Amway', are narcissistic charlatans and racketeers who have escaped investigation, regulation and prosecution in the USA (and elsewhere), by pretending affinity with naive US regulators and falsely claiming to be ethical businessmen who have offered a legitimate means of making money to their fellow human beings, and who respect the laws of God and man. Thus, exactly as in the case of Bernie Madoff, the fact that the bosses of 'Amway' have yet to be investigated, charged and convicted, does not mean that what they have been doing is legal (in the sense of lawful); for although it beggars belief, in the 1970s, US government regulators at the FTC caught the 'Amway' bosses red-handed operating a relatively small pyramid scam dissimulated as a 'lawful business opportunity', but, in 1979, a federal judge allowed these proven liars and thieves a free-hand to expand their already proven criminal enterprise without any further independent regulation, simply because these liars and thieves promised that they had mended their ways and that they would, henceforth, regulate their own enterprise.

How is it possible that Mr. Chang still fails to comprehend how we, and many other intellectually-rigorous observers in search of the truth (like Bruce Craig and Robert FitzPatrick, etc.), have arrived at the inescapable conclusion that, for the previous 30+ years, every so-called 'MLM company' has exploited this chronic US regulatory failure, and have been the corporate fronts for essentially the same reality-inverting scam which has been hidden behind essentially the same reality-invering 'MLM' fairytale?  

We have clearly stated that apart from the extraordinary testimonies of destitute 'MLM' dissidents, we have had access to decades of lawsuits and documents submitted in evidence, including the extensive audited accounts and tax records of  so-called 'MLM companies' and their non-salaried commission agents. This evidence proves beyond all reasonable doubt that, over the decades, tens of millions of individuals have been churned through 'Amway' and its many copy cats, but, despite what they steadfastly pretend to be reality, virtually no products and services have ever been sold by any of these persons to the public for a profit. On the contray, the minority of 'MLM' participants who could afford to remain active have been conditioned to follow essentially the same economically-suicidal plan of recruitment and regular consumption, on the pretext that this proven system can lead anyone to total financial freedom in a few years. 

Thus, just as in Bernie Madoff's so-called 'Hedge Fund' , the only real money flowing into these so-called 'MLM schemes', has obviously come from the ill-informed participants themselves. In other words, exactly as in the case of the Madoff fraud, ill-informed 'MLM' participants have, in fact, been peddled infinite shares in their own finite cash.  As a result, other than a tiny minority of decoys (whose apparent wealth has invariably also derived from secondary advance fee frauds a.k.a. 'tool scams'), all so-called 'MLM business opportunities' have had effectively 100% overall, rolling insolvency/failure-rates - which, for obvious reasons, have been deliberately occulted from the public.

In all so-called 'MLM schemes,' the effectively-unsaleable wampum has only been there to mask illegal payments into essentially the same, self-perpetuating, closed-market swindle.

How can anyone possibly fail to understand our position  ? 

David Brear (copyright 2011). 

'Once you remove the impossible, whatever remains, no matter how improbable, must be the truth'

Shyam 

I'm beginning to feel like Basil Rathbone trying to bring the dim-witted Nigel Bruce up to speed in a typical Sherlock Holmes movie. Indeed, I almost entitled this post, 'Elementary my dear Watson' (a mythical line which Holmes never actually utters in the original stories). 

I detect that a narrow shaft of light has suddenly begun to penetrate the swirling London fog our resident Dr. Watson's mind. Although he hasn't gone so far as to apologize to you, and to your fellow-citizens of the world's largest democracy, Kasey Chang has now requested a polite discussion, but what exactly he imagines he is going to bring to this discussion, I shudder to think. For a devastatingly-crass opening shot, he says: 

'I absolute agree that the laws and "Amway rules" for MLM are confusing, and a lot of scams pretend to be legal by adopting the Amway rules in name.' 

How is it possible that Mr. Chang still fails to comprehend that, not just lots of scams, but every single so-called 'MLM company' has been a scam whose instigators are all exceedingly greedy, but otherwise mediocre, little racketeers, who have simply copied the original exceedingly greedy, but otherwise mediocre, little 'Amway' racketeers - reciting the identical, reality-inverting script and steadfastly pretending to be honest businessmen by adopting the same 'Amway rules' in name only? 

Surely, no one can be that gullible and obtuse as to imagine that a bunch of wealthy, narcissistic parasites would voluntarily enforce rules which would immediately put an end to an almost fool-proof racket which continues to generate billions of dollars for them and for their parasitic, criminal associates (including their attorneys). 

Once you realize that the entire so-called 'MLM Industry' (including its codes of ethics and books of rules) has always been an absurd comic-book controlling-fiction which, exactly like Bernie Madoff's non-existent '$50 billions Hedge Fund', has only been built out of its victims' money, and has succeeded in becoming accepted as fact by a bunch of deaf, dumb and blind Inspector Lestrades (i.e. senior US regulators), Mr. Chang's questions - 

Would you agree that MLM is somewhere between a traditional business and a pyramid scheme? (or a hybridization of both?)

Can such a thing as "ethical MLM" actually exist? (Throw aside the "legal" aspect for the moment)

How much of the fault is the system itself, and how much of it is the way it's done? (i.e. is it the system's fault, or is it the "leaders / recruiters" fault?), 

makes as much sense as some financially-illiterate commentator asking Harry Markopolis in 2008: 

Would you agree that Madoff's fund is somewhere between a traditional hedge fund and a Ponzi scheme (or a hybrydization of both)?

Can such a thing as an ethical ponzi scheme exist (Throw aside the legal aspect for the moment)?

How much of the fault is Madoff's system itself, and how much is it the way it's done (i.e. is it Madoff's system's fault or is it Madoff and his associates' fault?). 

Our resident Dr. Watson has previously lectured us all at length about 'normal MLM companies,' so presumably he believes that 'normal MLM companies' exist. Although he draws this term like a sword, Mr. Chang now apparently says that, he has never directly said that 'normal MLM companies' actually exist which convenietly allows him to pretend that he can't understand where I have extrapolated such a fanciful idea from.  

We quoted an example of Mr. Chang's nonsensical drivel where he affirmed he has No position on 'Amway,'  but in the very same breath he then afffirmed his position that 'Amway has been operating legally in the USA (and elsewhere) for DECADES.' 

Although it doesn't seem possible, in response to that world-class oxymoron, Mr. Chang offered us an even more-nonsensical oxymoron with a rare tautological flourish for an added degree of difficulty:

'You are assuming that I had somehow stated or implied that Amway is a legal and ethical business when I did NO SUCH THING. I've stated several times I don't know enough about Amway to form such an opinion, only that it is legal under present US law. You even quoted me.' 

I'm not imagining this am I Shyam, our resident Dr. Watson really did say that he never said that Amway is legal, only that it is legal.  

Just when I thought that he couldn't possibly top that absurd line, Mr. Chang then claimed not to be able to follow my logic 

What will this funny fellow come up with next ? 

David Brear (copyright 2011)

Where law ends, tyranny begins'

The following, self-explanatory, letter was sent by Bruce Craig (on June 24th. 2009) to David C. Vladeck, the new Director of the Consumer Protection Bureau at the US FTC, who was appointed by the Obama administration.

In effect, what Bruce Craig is saying to David Vladeck, is exactly what Corporate Frauds Watch has said, and continues to say to its free-thinking readers without fear or favour -  that, in 1979, the millionaire bosses of  'Amway' fraud were caught red-handed running a dissimulated closed-market swindle, but they deceived ill-informed US government regulators into allowing them to continue to commit fraud, and then used the resulting multi-billion dollar profits from this same fraud, and related frauds, to buy political influence. This chronic US regulatory failure has produced a hidden, ongoing, global financial holocaust (with a small 'h') which, for obvious reasons, the US government now cannot fully acknowledge.

Dear Mr. Vladeck:

I was a consumer litigator for the Wisconsin Department of Justice during most of my 30 years there, retiring in 1997. I began litigating pyramid schemes in 1969, against Koscot Interplanetary, and concluded with a successful action against Fortune in Motion in 1997. I drafted the Wisconsin prohibition against pyramids or 'chain distributor schemes' in 1970. Until 1979, the Commission viewed pyramids as a per se violation of Sec. 5. Commissioner Paul Rand Dixon wrote several decisions, Koscot, Holiday Magic, and Ger-Ro-Mar all of which reached this conclusion with little difficulty. I frequently worked in conjunction with the Commission's staff attorneys on these cases.

The Commission's Amway decision in 1979 erroneously concluded that Amway was not a pyramid because it had a provision in its dealer rules requiring retail sales and a buy-back program. This ruling has effectively legitimized pyramids, now called MLMs, as all other pyramids immediately adopted the 'Amway rules'. While the Commission did bring some pyramid cases, they involved extended litigation, a confusing legal standard, and a requirement that it prove that the 'Amway rules' were not enforced. The unfortunate by-product of this litigation was the implication that other companies, such as Amway, were legal since they were not sued. The Commission has never revisited the Amway decision to see if in fact it does have retail sales and a meaningful buy-back program.

The 1979 ruling made billionaires of the Amway founders and funded a highly effective public relations and lobbying effort which, for the past 30 years, has entrenched the dubious principles of the Amway decision and influenced a significant number of legislators and other governmental officials both state and federal. Timothy Muris was an Amway attorney prior to being appointed Chairman of the Commission. Perhaps the most disappointing commentary in this respect, at least from my perspective, is the involvement of former director of the consumer bureau, Joan (Jodie) Bernstein, who filed submissions in respect to the Business Opportunity Rule on behalf of the Quixtar Company, an Amway affiliate, and the firm Bryan Cave, L.L.P. In her rebuttal submission, she designated me a 'self-appointed' critic who filed nothing but a 'patronizing screed' . I found this beneath a person once the recipient of the Miles Kirkpatrick Award and in direct opposition to her service with the Commission.

The Business Opportunity Rule has been in process since early 2006 and was once intended to deal with the pyramid issue. I submitted comments on this rule. Since then, as evidence of the influence of the pyramid lobby, the rule has been amended to exclude pyramids leaving rack jobbers and envelope stuffing proposals.

If promulgated in its current form, the Rule will stand in mute testimony to the dominance of the pyramid lobbying effort and the inability of the Commission to deal effectively with this matter. I would strongly urge you to suspend the promulgation of this rule until a complete review of the issues involved has been made. At a minimum, it would seem advisable to find out whether the underpinnings of the 1979 Amway decision were in fact based on a rational analysis. I have previously suggested this in my letter to Chairman Pitofsky in 2000, a copy is enclosed.

Pyramid selling has now been successfully promoted around the world, solely on the basis that it has been legalized in the United States. Yearly losses are well into the tens of billions of dollars -far exceeding the Madoff matter and with victims far less able to absorb the losses. The fact that pyramids, or endless chains, are per se illegal has been buried in the meaningless distinction between a pyramid and a Multi Level Marketing plan.

It is the endless chain aspects of the plan that are illegal, not the existence or non-existence of retail sales or buyback programs. This ambiguity results in the implication that there are legal MLM companies, as the term is used. It has been perfected by thirty years of well funded lobbying efforts.

With the current economic downturn many unemployed persons will be seeking alternate sources of income. Pyramids will exploit this fact and exacerbate the problem, as 99% of pyramid participants fail. This would be a tragic development, one that the Commission should seek to avoid.

I am willing to discuss this further if either you or your staff is so inclined.

Respectfully submitted,

Bruce A. Craig

Bruce Craig, should know what he's talking about. He once examined the tax-returns of all active 'Amway' adherents in the State of Wisconsin (I believe there were around 35 000 of them). This led him to write the following warning as a foreword to Eric Scheibeler's book, 'Merchant's of Deception.'

'Mr. Scheibeler's book is a chilling portrayal of the process by which intelligent people can persist for years in pursuing the Amway dream while making no money. It is all the more significant because he earned his way to one of the highest distributor levels in the Company....I learned of similar experiences from ex-distributors when I interviewed them for the State of Wisconsin's Amway litigation in the early 80's. Such conditioning may explain why the tax returns (obtained for this litigation) of all active Wisconsin Direct Distributors, the company's top 1%, showed an average net income of minus $900. Why did these men and women persist....under these economic circumstances? Eric Scheibelers book answers this question for those whose minds are clear enough to read its pages.'

BRUCE A. CRAIG, retired Assistant Attorney General, 

Wisconsin Department of Justice - Office of Consumer Protection

Eric Scheibeler, in fact, wasted ten years of his life in 'Amway' and lost around $100 000. During this period, he passed around $4 millions to his handlers (mainly from the sale of publications, recordings and tickets to meetings). When finally, he managed to begin to confront external reality, Eric was destitute, suffering from chronic psychological deterioration symptoms and on the point of suicide.

David Brear (copyright 2011)