Robert FitzPatrick's expert opinion of 'MLM' has been misrepresented by Kasey Chang

Shyam

In a recent comment, Kasey Chang made the false and misleading statement that 'Even Robert L. Fitzpatrick, noted MLM Critic, say (sic) there are SOME MLMs that are legal.'Mr. Chang then went on to say that: He (Robert FitzPatrick) didn't name any neither(sic). Are you going to call him brain-dead as well?' 

For the benefit of your free-thinking readers, I have now obtained the permission of Robert FitzPatrick (who is a good friend) to set the record straight.

Robert (who, for obvious reasons, has been the target of various, malicious, multi-million dollar lawsuits filed by wealthy 'MLM' racketeers, and their apologists), has very cautiously never made the definitive statement that 'all MLMs are unlawful,' because, if challenged in court, he would have to admit that, self-evidently, he has not examined all of them. However, it is incorrect and dangerous for Kasey Chang to extrapolate from this that Robert has said that 'some MLMs are operating lawfully,' even though Mr. Chang has correctly observed that Robert has never named a 'legal MLM.'

Robert FitzPatrick's intellectually-rigorous position has always been that, in order for any commission-based, pyramid sales scheme to be legal in the USA, it would have to fulfil the following criteria: a corporate structure recruiting non-salaried commission agents - with an overwhelming majority of whom being able to produce independently-audited accounts (including income-tax receipts) which prove that they have earned their livings by regularly retailing significant quantities of products, and/or services, to the public for a profit. Over many years (and with a remarkable degree of fairness which is the mark of the man), Robert has continued to hold out the possibility that such a lawful, commission-based, pyramid sales scheme might exist somewhere. However, during this period, he has examined the actual, lack-of-earnings-data of numerous so-called 'MLM business opportunities', but he has never yet found one which fulfilled the above criteria. In all cases, Robert has discovered that the overwhelming majority of all 'MLM' participants (99%) have lost money, because they have not actually been retailing products, and/or services, regularly to the public for a profit. On the contrary, Robert has discovered that, despite what the instigators and apologists of all these so-called 'MLM business opportunities' have steadfastly pretended to be reality, the overwhelming majority of active 'MLM' participants have mostly been buying effectively-unsaleable products, and or services, themselves, and endeavouring to recruit more and more people to duplicate the same unlawful system. Furthermore, Robert has also discovered that, in all cases examined, so-called 'MLM business opportunites' have had hidden, annual drop-out rates in excess of 50%; revealing that all these essentially-identical, dissimulated close-market swindles have only been sustained by endlessly-churning their insolvent participants and by deliberately hiding their effectively 100%, overall, loss/drop-out rates.

Both Robert FitzPatrick and I, along with various other well-informed observers, have taken the common-sense view that this huge body of damning evidence, now stretching back more than 50 years, proves beyond all reasonable doubt that, when examined in its entirety, the so-called 'MLM Industry' has been hiding a multi-billion dollar racket of global proportions and that chronic regulatory-failure, and/or extensive political corruption, in the USA, have been significant factors in allowing this shameful situation to develop. Even if he has the intellectual capacity to comprehend the true scale of this problem, I doubt whether Kasey Chang's ego will yet allow him to offer a full, and unreserved, apology for misleading your free-thinking readers.

David Brear (copyright 2011)