Saturday, 31 March 2012

'Amway India Enterprises' should be obliged to produce evidence proving that it is not a fraud

Again, Corporate Frauds Watch is attracting the scripted comments of intellectually-castrated 'Amway' adherents.
Yet again, not one of these poor, bedazzled little sheep has offered to supply quantifiable evidence (in the form of audited accounts; particularly, income-tax payment receipts) which might prove that at least one Indian 'Amway' adherent has earned a net-income lawfully by regularly retailing 'Amway' wampum to the public for a profit.
In order to avoid closure (after a protracted US Federal Trade Commission investigation) the 'Amway' bosses introduced a fake 'rule' which appeared, to casual observers, to require that 70% of all purchases by 'Amway sales people' be resold to at least 10 retail customers before 'Amway sales people' could receive commission payments. Mysteriously, 'Amway' was allowed to continue in the USA by a 1979 US federal court ruling, apparently on the mistaken assumption that at least 70% of 'Amway' products would, henceforth, be retailed to the public, but the same court failed to determine what this fake '70% retail rule' actually stated or to introduce an independent mechanism to verify that it would be enforced. However, even though 'Amway's' own essentially-meaningless 'rule' very specifically did not refer to 'the public' and has never been enforced, the '7O%' criteria still established whether what 'Amway' describes as 'bonuses' are lawful payments based on external, retail sales transactions, or unlawful internal reward-payments secretly based on recruiting. i.e. If a significant majority of 'Amway's' claimed 'sales' are to the public, 'Amway' is a direct selling company, but, if a significant majority of 'Amway's' alleged 'sales' actually derive only from the recruits' own purchases, 'Amway' is a Ponzi scheme or money circulation scheme (as defined by Indian criminal law). 
To avoid any uneccessary expense for Indian law enforcement agents, it might be a good idea for the Indian courts to oblige the bosses of 'Amway India Enterprises' to produce quantifiable evidence that their so-called 'MLM income opportunity' has had a significant and sustainable source of external revenue other than its own participants. 
In the recent lawsuit brought in California by high-level 'Amway' adherents, the plaintiffs submitted a sworn affidavit stating that 'Amway' products were sold almost entirely to the 'distributors' and never retailed. They also produced an internal 'Amway' study of 2006 which revealed that retail sales to the public were actually less than 4%. Faced with this irrefutable evidence, 'Amway's' attorneys ran up a white flag and offered the equivalent of $155 millions to stop the case from going to trial. 
David Brear (copyright 2012)

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