Meanwhile, in the adult world of quantifiable reality, at the end of last month, Gopal Shekawat was arrested in Surat by police officers from Andhra Pradesh, as a result of Shyam Sundar making legitimate complaints (on behalf of the Indian public) that Shekawat, and his associates, have been stealing money from many thousands of people by running a dissimulated money circulation scheme. Shekewat was subsequently released on bail, but he then failed to present himself to a Judge September 1st, and consequently he is now a fugitive. ____________________________________________________________________________Shyam Sundar has kindly supplied the following clarification which I think clearly demonstrates that Gopal Singh Shekhawat is no ordinary charlatan; for Shekhawat exhibits the diagnostic criteria of severe and inflexible Narcissistic Personality Disorder:
Gopal Singh Shekhawat was arrested by the Andhra Pradesh police in Surat. However, on the way, the police presented him in Borivali magistrate court, Mumbai, for obtaining prisoner transit warrant popularly known as PT Warrant. However, a large group of advocates descended on the magistrate court on behalf of the accused, Gopal, and appealed to the magistrate that he would not run away and he would present himself before the Ongole court on or before September 1st. On the condition that he would present himself before the Ongole magistrate, the Borivali court in Mumbai set him free on bail with an amount of Rs. 20,000 and two sureties of like amount.
However, Gopal did not present himself before the Ongole magistrate on September 1st. Moreover, he preferred to file two writ petitions in Andhra Pradesh High Court - one civil and the other criminal.
In the civil petition, Gopal appealed to the High Court to direct the police not to interfere in his lawful business. Justice K C Bhanu refused to give any stay order on the investigation and posted the matter after three weeks. He issued notices to the Andhra Pradesh State Government, the Director General of Police, the Kandukuru Circle Inspector of Police, Prakasam district and Corporate Frauds Watch to file their affidavits presenting their case. The HC Justice while refusing to give stay order on the investigation even for a week, said that the crimes mentioned in the FIR are serious and under these circumstances the court has to listen what the complainant and the police have to say in this regard.
In the criminal petition, the accused, Gopal, appealed to Justice Samudrala Govindarajulu to grant him anticipatory bail to prevent the police from arresting him. After hearing the Government pleader, the Judge said that the anticipatory bail could not be granted as the accused had already jumped the bail.
Meanwhile, Pratibha Singh Shekhawat, wife of Gopal, filed a quash petition in the Bombay High Court appealing to the court to quash the FIR registered against her by Andhra Pradesh police.
The laughable thing is that the Bombay High Court has no jurisdiction to quash the FIR filed by Andhra Pradesh police. Only Andhra Pradesh High Court has jurisdiction.
The Andhra Pradesh police had frozen the accounts of NMart all over the State and all transactions came to a standstill.
The accused, Gopal, has turned fugitive running away from law. If he has any respect for law, he would have presented himself before the Ongole magistrate.
This is exactly what happened so far.
Shyam Sundar
‘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. NPD sufferers often choose partners, and raise children, who exhibit ‘co-narcissism’ (a co-dependent personality disorder like co-alcoholism). Co-narcissists organize themselves around the needs of others (to whom they feel responsible), they accept blame easily, are eager to please, defer to others’ opinions and fear being seen as selfish if they act assertively. NPD was observed, and apparently well-understood, in ancient times. Self-evidently, the term, ‘narcissism,’ comes from the allegorical myth of Narcissus, the beautiful Greek youth who falls in love with his own reflection.
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.
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I have to say that 'NMart' is one of the most obvious 'MLM income opportunity' frauds, I have ever examined. Its instigators have openly admitted that in order to make money in 'NMart,' participants don't have to retail anything to the public for a profit. On the contrary, all they have to do is give their cash to 'NMart' (in return for effectively unsaleable materials) and recruit their friends and relations to do the same.
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Gopal Shekawat posing in a Rolls Royce bought with stolen money
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This means that 'Nmart' has had no significant or sustainable revenue other that deriving from a never-ending chain of contributing participants. In other words, victims of the 'NMart' fraud have actually been sold infinite shares of their own finite money.
In recent years, the republic of India has become infested with 'MLM income opportunity' frauds. Sadly, during the first decade of the 21st century, the once exclusively-American problem of closed-market swindles dissimulated as ‘lawful Direct Selling,’ and commonly-referred to as ‘Multi-level Marketing (MLM),’ has quickly become the most-common type of corporate fraud that citizens of the Indian republic are likely to encounter. In the absence of rigorous, independent regulation, the number of Indian-registered companies hiding these absurd, but nonetheless pernicious, swindles has continued to multiply year after year. Millions of Indians have already been left with piles of effectively-worthless wampum, wasted time, broken dreams, financial losses and debts. However, a significant percentage have not only been ruined, but they have also become dissociated from friends and relatives who refused to accept the 'MLM' fiction as fact. Yet, precious few Indians have been able to face up to reality and complain of fraud to the police. This has been due to the facts that ‘MLM’ victims:
- (like most fraud victims) find it hard to admit to the world that they were deceived.
- are, almost without exception, incapable of explaining in accurate, deconstructed terms what they were involved in.
- are invariably recruited/deceived by a friend or relative and, in turn, try to recruit/deceive their own friends and relatives.
- are manipulated by their instinctual desires and self-esteem and are, thus, persuaded to believe the scripted-lies that:
‘MLM’ participants are ‘Independent Business Owners’;
‘MLM’ participation is the result of an entirely 'free-choice';
‘MLM’ success requires sustained effort and belief, therefore, ‘MLM’ participants who lose money and give up, are "entirely responsible for their own failure';
‘MLM’ contracts oblige dissatisfied participants to enter into internal systems of 'dispute resolution';
‘MLM business opportunities’ are based on 'retailing products,' not just on recruiting more and more participants, and are, therefore, 'perfectly lawful';
‘MLM’ companies act with the 'full-approval of government';
‘MLM’ companies are rigorously self-regulated by ‘Direct Selling Associations’; ‘MLM’ companies are governed by strict ‘codes of ethics’;
‘MLM’ companies operate ‘money-back guarantees’;
‘MLM’ companies must be legitimate, because they support public charities and are endorsed by celebrities and opinion-makers;
‘MLM business opportunities’ have existed for decades and are allowed to operate around the world without official challenge, therefore, all persons openly-criticising them as pyramid scams and commercial cults, must be crazy, and/or unqualified, ‘conspiracy theorists, communists, liars, sociopaths, paid agents’ etc.
Although the self-perpetuating ‘MLM’ virus only began to infect India relatively recently, the problem was spawned in the USA as long ago as the mid-1940s - when the Indian sub-continent was still struggling to achieve independence from centuries of foreign rule. At that time, the technical-sounding term, ‘Multi-Level Marketing,’ was coined by a gang of three Narcissistic American charlatans as the first line of defence to avoid the charge that their controversial new enterprise appeared to be in breach of federal, and State, legislation designed to outlaw pyramid scams and money circulation schemes.
At the close of WWII, after encountering a pair of like-minded, criminal associates called Lee Mytinger and William Casselberry, Carl Rehnborg, the middle-aged German/American owner of a California-registered private company known as ‘Nutrilite’ (which already had a shameful history of peddling mystifying mixtures of cheaply-procured common substances, misbranded as ‘exclusive health tonics’and ‘food supplements,’ at around 1000% profit) discovered that he could dramatically expand the scale of his dissimulated criminal enterprise by using quasi-religious techniques to convert his most-vulnerable victims to the additional, self-gratifying closed-logic belief that the monthly purchase of around $20 of ‘Nutrilite’ products, and the recruitment of further levels of unquestioning $20 per month ‘Nutrilite’ proselytizers, ad infinitum, could bring not just limitless health, but also limitless wealth, to anyone.
Although initially, their camouflage was pretty thin, the owners of the first two companies peddling a so-called ‘MLM income opportunity’ were not prosecuted for running a pyramid scam. Instead, Messrs. Rehnborg, Mytinger and Casselberry were quickly challenged by officials at the federal Food and Drug Administration for running an updated, and industrialised, version of an age-old pseudo-medical swindle, commonly known as ‘snake-oil selling.’ Indeed, in the late 1950s, after more than a decade of litigation, and counter-litigation, ‘Nutrilite’ appeared to be on the brink of compulsory closure under federal laws concerning the misbranding of medicines.
In 1959, a copy-cat company known as the ‘American Way Association’ or ‘Amway’ was hastily created in the Bible-Belt State of Michigan by two clean-cut young missionaries of the ‘MLM income opportunity’lie, Richard De Vos and Jay Van Andel. They were able to side-step further FDA prosecutions, simply by replacing the pseudo-medical ‘Nutrilite’ wampum with banal, but grossly over-priced, ‘Amway’household products. Perversely, the profitable ‘Nutrilite’ label was then quietly absorbed back into the essentially-identical ‘Amway’ fraud, but more than a decade later.
During the 1970s, as a result of mounting complaints and press-exposure, the US Federal Trade Commission finally investigated, and attempted to close, ‘Amway/Nutrilite’ as a pyramid scam, but only when these companies were becoming an international problem. FTC officials discovered that the so-called ‘Amway income opportunity’ was an unviable closed-market (with virtually no external source of revenue), sustained by the endless-chain recruitment of losing-participants (who were falsely described in their contracts as ‘Independent Business Owners’), and from which the insignificant number of instigators had been secretly deriving millions of dollars of unlawful profits. Despite the fact that effectively 100% of ‘Amway’s’ unpaid proselytizers had been doomed to lose their cash during two decades, Messrs. De Vos and Van Andel were not prosecuted for fraud. Unbelievably, in 1979 they were allowed to maintain their corporate front and continue their clandestine criminal activities in the USA, when they were given a derisory $60 000 fine (for illegal price-fixing) and their attorneys steadfastly pretended affinity with the regulators by informing a federal judge that the previously-fixed exorbitantprices of ‘Amway’ products had already been voluntarily reduced and that ‘rules’ had also been voluntarily introduced which would oblige ‘Amway business owners’ to make significant, regular, retail sales in order to qualify for commission payments and, thus, produce a viable open-market. The subsequent acceptance these undertakings by senior FTC officials, but without creating any independent means of enforcing them, had the effect of authorizing the very crime which they ostensibly sought to prohibit. As a direct consequence of this grossly-incompetent failure to protect the public, countless copycat ‘MLM income opportunity’ frauds began to appear. Currently, the latest generation of ‘Amway’ bosses enjoy political protection in the USA. It has been estimated that since 1979, in excess of 10 millions US citizens have been churned through the ‘Amway’ fraud, and as many as 40-50 millions world-wide.
Even though the billionaire ‘Amway’ bosses steadfastly pretend to be compassionate capitalists/philanthropists - American patriots and Republicans who abide by a strict ‘code of Christian-inspired ethics’ and who operate with the full-approval of US government regulators, they (and their inflexible proselytizers) have long-since become widely-perceived by the American public as a crack-pot, right-wing ‘Prosperity Gospel’ cult; so much so, that the organization felt obliged to re-brand its tarnished corporate front as ‘Quixtar’ during the 1990s.
After surviving almost five decades of ill-informed, and isolated, enquiries and prosecutions, in 2007, a well-informed, and comprehensive, class-action lawsuit was filed (on behalf of US victims) against‘Amway/Quixtar’ in California, under federal anti-racketeering legislation (the RICO Act, 1970). This suit alleged that ‘Amway/Quixtar’ has been the main corporate front for a vast and highly-organized pyramid fraud, in which (year after year) fresh intakes of ill-informed victims have been deceived into handing-over unlawful payments to the instigators of the fraud (in exchange for effectively worthless products) on the pretext that the exact duplication of a plan of consumption and recruitment can lead anyone to total financial freedom. The suit alleged that the tiny minority of decoy-participants who have been advertised by the ‘Amway/Quixtar’ organization as fabulously wealthy examples of success in the ‘Amway/Quixtar MLM business opportunity,’ actually derived the majority of their profits from secretly perpetrating a related-fraud, commonly referred to as the ‘Amway tool scam’. i.e. the use of apparentlyindependent corporate fronts (year after year) to procure, and to peddle, billions dollars of over-priced publications, recordings, tickets to meetings, etc., to the constantly-churning, insolvent victims of the‘Amway’ pyramid fraud, on the pretext that these ‘business building materials’ contain exclusive secrets which are vital to achieving success in the ‘Amway business opportunity.’ Furthermore, the suit alleged that all key-information revealing the cruel trap which lurks behind the attractive bait of the‘Amway/Quixtar’ Utopia, has (year after year) been deliberately occulted by the billionaire bosses of the organization and by their millionaire, de facto criminal associates.
After almost 3 years of delay (in which ‘Amway/Quixtar’s’ attorneys failed to invoke a clause in the plaintiff/victims’ contracts which appeared to take away their rights as US citizens to be heard in an independent court, and force them into a Mafia-style, rigged, internal system of dispute resolution), ‘Amway/Quixtar’s’ attorneys attempted to settle this RICO lawsuit. In exchange for the withdrawal of the suit (without the accused admitting fault), they agreed to hand over a total of $155 millions in compensation and costs. The ‘Amway’ organization has since tried to present this costly capitulation as a victory, but the precedent for successfully suing the ‘Amway’ bosses in US courts (under the RICO Act, 1970) has been clearly established.
s Currently, the reality-inverting ‘Amway’ propaganda machine proudly proclaims ‘450 000 Independent Amway Business Owners in India selling billions of Rupees of Amway product annually.’
Sadly, this sugar-coated, Indian adaptation of a poisonous American fairy story has been swallowed by many casual observers, including members of the Indian financial press. However, in order to put the mainstream media to sleep, all the usual thought-stopping tactics have been employed – expensive magazine and television advertising, gifts to charity, paid association with celebrities, membership ofthe ‘Indian Direct Selling Association,’ etc. Tellingly, no accurate, verifiable information has been offered by the corporate officers of ‘Amway India Enterprises,’ or those of the ‘Indian DSA,’ as to what percentage of the company’s (apparently impressive) market has comprised authentic, external, retail transactions (i.e. regular, lawful sales to members of the general public who are not themselves insolvent ‘Amway’ sales agents). It seems that, so far, no mainstream Indian journalist has bothered to ask this common-sense key question.
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| Indian 'Amway Diamond' schills |
Just a slightly more thoughtful approach from the Indian media would have revealed that ‘Amway/MLM’is the title for an absurd, but nonetheless pernicious, lie; for, without a sustainable, or significant, source of external revenue (largely due to the deliberately banal quality of products combined with exorbitant fixed-pricing), the so-called ‘Amway MLM Income Opportunity’ has been economically unviable and, therefore, fundamentally fraudulent under Indian legislation which defines, and outlaws, money circulation schemes. In reality, losing-participants in the ‘Amway’ closed-market have merely been peddled an infinite share of what can only be their own finite money. Furthermore, if the 50-60% average, annual churn rate is taken into consideration, we discover that more than one million aspiring‘Amway Business Owners’ have already vanished in India alone. Classically, only a core-group (less than 5%) of ‘Amway’ adherents (usually with access to independent funds) remain bedazzled by the Utopianmyth of ‘future total financial freedom’, for extended periods.
As part of a pattern of ongoing, major racketeering activity (that now stretches back at least 50 years), in June 1994, representatives of the ‘Amway’ lie approached the Indian Ministry of Industry (Dept. of Industrial Development) bearing gifts. By steadfastly pretending affinity with officials (who, naturally, wanted to believe that all external investment creates employment), the ‘Amway’ crime families initially sought an agreement (renewable biannually) which simply paved the way for the creation a privately-controlled, unlimited-liability, commercial company, ‘Amway India Enterprises.’ As a subsidiary (entirely owned by its American parent company), the representatives of the ‘Amway’ lie meekly accepted that‘Amway India Enterprises’ would be forbidden to manufacture or import. The proposed company would be permitted only to use its ‘Multilevel Marketing Business Model’ to sell products sourced from local, independent, Indian manufacturers. Furthermore, ‘Amway India Enterprises’ was obliged to file a separate agreement with the Reserve Bank of India, allowing the proposed subsidiary to transfer capital to, and from, its parent and, thus, act as a de facto, foreign exchange dealer. Consequently, without any informed scrutiny, officials at the Indian Ministry of Industry, Secretariat for Industrial Approval (Foreign Collaborations II Section) rubber-stamped the application for the proposed company (within less than two months) on August 26th 1994. Twelve months later, the company was registered after final approval by the Indian Foreign Investment Promotion Board. In this way, America’s contemporary version of the Trojan Horse was dragged unnoticed into India with the assistance of the country’s own naïve regulators. However, it lay dormant until May 5th 1998 when a network of regional offices began to be established. Six years later, the destructive contents finally began to spill out. On August 8th 2004, the (apparently safe) original (biannual) agreement was mysteriously altered (at the request of the corporate officers of ‘Amway India Enterprises’) allowing the unregulated manufacture, and/or importation, of ‘Amway’s’ own range of effectively-unsaleable household, beauty and health products. However, at no stage did Indian officials bother to ask how the so-called ‘MLM Business Opportunity’could possibly be lawful when ‘Amway’ products were now, self-evidently, several times the price of equivalent (and often superior) merchandise widely-available in traditional Indian retail outlets. Yet, implicit to the modified agreement was the understanding that ‘Amway India Enterprises’ would respect Indian law and recruit non-salaried agents who could earn commission payments from retailing products to the public. In plain language, Indian officials were deceived by the de facto agents of US-based racketeers. That said, it is not known what other inducements (if any) these conveniently-blind civil servants received.
The guts of above information comes from a landmark judgement given on July 19th 2007 against‘Amway India Enterprises’ by Chief Justice G.S. Singhvi, and Justice C.V. Nagarjuna Reddy, of the High Court of Judicature, Andhra Pradesh, Hyderabad. In 2006, the Criminal Investigations Dept. of theHyderabad police raided, and sealed, the local offices of ‘Amway India Enterprises’ arresting various employees, following a particularly detailed complaint filed by A.V.S. Satyanarayana under the ‘Prize Chits and Money Circulation (banning) Act, 1978.’ This courageous individual confessed that he had been deceived into wasting a significant amount of time and money after having being subjected to overwhelming psychological pressure to join ‘Amway’ by two dominant men in his own social circle. Within three days of the registration of this complaint, aggressive lawyers acting for ‘Amway India Enterprises’ issued two writs against the Hyderabad CID. Typically, ‘Amway’ posed as the innocent victim under attack. Ignoring all quantifiable evidence to the contrary, the lawyers steadfastly pretended thattheir employer’s ‘MLM Business Opportunity’ was perfectly lawful and that ‘Amway India Enterprises’ was acting with the full-approval of the Indian government. Therefore, the Andhra Pradesh police had neither reason nor authority to launch such a heavy-handed investigation, and, thus, damage, a legitimate business. At the same time, both the lawyers and corporate officers of ‘Amway India Enterprises’ tried to convince the world that Satyanarayana was a pathetic liar who had filed a malicious complaint as the result of a marital/financial dispute which had, itself, resulted in his pursuing a vendetta against members of his family who were ‘Amway Distributors.’ Ironically, it was ‘Amway India Enterprise’s’ own malicious writs which brought the company under the rigorous scrutiny of the Andhra Pradesh High Court.
Simply by applying common sense, Chief Justice Singhvi and Justice Reddy were immediately able to see that the ‘Amway’ fairytale is far too good to be true. Then, by ignoring the scripted-lies of ‘Amway’s’attorneys, and by concentrating on the compelling testimony of the victim (backed up by documentary evidence), they deduced that the so-called ‘MLM Business Opportunity’ is in breach of Indian legislation. Despite the mystifying, linguistic and mathematical complexity of ‘Amway’s’ corporate camouflage, de facto agents of the company actually propagate the self-gratifying delusion that limitless prosperity can eventually be obtained without any further effort simply by regularly purchasing products and recruiting others to do the same, etc., ad infinitum. As a consequence, the two writs were dismissed, and the High Court of Andhra Pradesh ordered that the Hyderabad Criminal Investigation Dept. should be allowed to continue to follow whatever procedures are permitted by law to hold the corporate officers of ‘AmwayIndia Enterprises’ to account.
Self-evidently, the main beneficiaries of the ‘Amway’ racket in India, are not Indian citizens. Like the Empress of India in the 19th. century, the rulers of the ‘Amway’ Empire have no need to set foot in India. The only effective way for Indians to hold these wealthy liars to account would be to gather a token group of their destitute victims and then find well-informed US attorneys who are prepared to follow the now-established precedent and file a class-action lawsuit in the USA (this time, on behalf of all Indian victims of the ‘Amway’ lie) under US federal anti-racketeering legislation (the RICO Act, 1970).
David Brear (copyright 2012)
