AP High Court dismisses Amway distributors' writ petition on Feb 4

February 4 was a great day for Corporate Frauds Watch. The Andhra Pradesh High Court on Thursday dismissed a number of writ petitions filed by several dishonest companies and individuals paving way for criminal action against them by the police. The modus operandi of such fraudulent companies is that they file writ petitions in the High Court and continue their dishonest business deceiving lakhs of people all over country. If anybody files a complaint against them, the police do not take any action against on the pretext of the writ petition pending in the High Court.

As a remedial, Corporate Frauds Watch has chosen to file implead petitions in all these writ petitions. It has already filed such petitions in as many as 14 instances. On February 4th, a number of writ petitions came for hearing and our Advocate Mr Mastan Vali represented the views of Corporate Frauds Watch. The division bench comprising Justice G Raghuram and Justice Ramesh Ranganathan dismissed seven writ petitions and transferred a writ petition to the Delhi High Court.

The writ petitions filed by M/s Vennela Shopping & Marketing Private Limited, M/s Maheswari Getit Marketing, Sri Sai Empower Marketing, M/s Bodela Technologies & Marketing, M/s V-Can Network, M/s QuestNet were dismissed.

Another writ petition filed by six distributors of Amway India -- Sistla Raviteja of Vijayawada, Tirumala Raja Naren, Tirumala Anjali Naren both from Tirupati, Ummakonda Sreeti Reddy, Ummakonda Ashok Reddy both from Hyderabad and Miss Turaga Radhika Ramani -- was also dismissed. The Division Bench stated that it is a money circulation scheme beyond doubt.

Now, the Corporate Frauds Watch would take up the matter with the CID of Andhra Pradesh Police Department seeking action against the accused companies.

The Division Bench has transferred the writ petition filed by Team Life Care Insurance Private Limited to the Delhi High Court on the plea that another writ petition was pending there.

Amway figures are complex pseudo-economic drivel, Trivedi

Shyam
We now know that Bernie Madoff's so-called 'Hedge Fund' had absolutely no external source of revenue. Although he steadfastly pretended that he was making billions of dollars of legitimate profits on behalf of his investors, Madoff's company was merely the cover for an ingenious, but nonetheless pernicious, money circulation (or Ponzi) scheme in which victims had been peddled infinite shares of what could only be their own finite money. Prior to 2008, Madoff succeeded in maintaining an absolute monopoly of information about his absurd activities. Some of the world's most-respected financial publications published Madoff's fantastic fiction as fact, and he used these (apparently independent) reports to sustain his crimes. He followed the old advertizing maxim:
If you want to hide something, then make as big as you possibly can.
The fact that Madoff pretended affinity with financial regulators and was never rigorously investigated, also convinced many of his victims that he was legitmate.
With financially illiterate regulators and journalists, and naive fellows like Trivedi, in the world, it is no wonder that enormous criminogenic groups like 'Amway' and 'Scientology' exist to dupe them. Sadly, it's not just Trivedi who cannot understand the vital question which I advised him to ask his 'Amway' handlers?
Over the last several years, what percentage (by value) of 'Amway's' published 'Multi-Billion Dollar Sales' have actually been to persons who are not agents of the organization? (i.e. does the 'Amway' scheme have sufficient external revenue to pay the majority of its participants a profit, or is it just another Madoff-style scam hiding behind a wall of complex pseudo-economic drivel?)
In his favour, Trivedi has politely asked us to explain, but how is it possible that he still insists that 'Amway' should be compared to legitimate manufacturers - who wholesale their products to genuinely-independent businesses (which have a vast choice of other manufacturers) to retail them to the public (who have a vast choice of other retailers)?
In simple terms, the profits of all legitimate businesses derive from an external source and they have no reason to be evasive.
Tellingly, 'Amway's' non-salaried commission agents have been arbitrarily defined in their contracts as 'Independent Business Owners' (although this reality-inverting term has recently been forbidden in the UK). However, these same contracts prevent them (on pain of summary excommunication from the organization) from offering 'Amway' products on the open market (in traditional retail outlets) or from offering the products of other manufacturers.
In simple terms, 'Amway' agents are obliged by their contracts only to buy their stock from 'Amway' and to offer no other products.
In reality, so-called 'Amway Independent Business Owners' are completely dependent on 'Amway'. The organization retains absolute control over all the most important factors of any real business, price, quality, nature, etc. of the products being offered.
Each time 'Amway' has been investigated, it has been revealed that due to the banal quality and exorbitant prices, the so-called 'IBOs' are (effectively) the only people buying 'Amway' products, and that the so-called 'Amway Business Opportunity' is, thus, merely the cover for an ingenious, but nonetheless pernicious, money circulation (or Ponzi) scheme in which victims have been peddled infinite shares of what can only be their own finite money. However, for decades, the 'Amway' bosses have escaped criminal prosecution by pretending affinity with regulators - holding up their hands and promising to reform their activities. Prior to these reforms, according to Trivedi, for years, 'Amway' was allowed to publish misleading 'sales figures' that were deliberately exaggerated by more than 30%. In other words, the organization pretended that all its products were being retailed to the public. Trivedi now says that 'Amway's sales figures' only represent 'wholesale' transactions between itself and its own agents.
In plain English, 'Amway' figures are complex pseudo-economic drivel (in the style of Bernie Madoff), for they do not reveal if the 'Amway' scheme has sufficient external revenue to pay the majority of its participants a profit.
David Brear

Trivedi could not comprehend plain English

Shyam

Imagine, if Bernie Madoff had been challenged by his victims in the exactly same way that I advised young Trivedi to challenge his 'Amway' handlers? Imagine, if they'd all got together and demanded that Madoff answer the following, simple question:

Over the last several years, what percentage (by value) of 'Madoff Investments' perpetually-expanding , multi-billion dollar Hedge Fund' have actually derived from persons who are not investors themselves?

In reality, Madoff was challenged by a few of his victims just before he confessed to federal law enforcement agents that the only cash that there had ever been in his miraculous 'Hedge Fund', was secretly that of his victims. In the months prior to his arrest, Madoff was still confidently spouting the same precisely-worded lies and pointing to a long list of 'independent sources' (including The Wall Street Journal) to back him up. In reality, for more than a decade, a whole flock of (apparently well-educated) financial journalists had simply repeated Madoff's 'multi-billion dollar' fairytale (without the slightest qualification). Apparently, it never occurred to these dunces with diplomas to dig deeper and ask the mercurial Mr. Madoff for some proof that he was, in fact, telling the truth.

Trivedi again fails to comprehend plain English. Self-evidently, I didn't ask him any questions at all, because we all know that he doesn't have the beginnings of clue what the answers are. I merely suggested that the poor little lad put his hand up and ask his 'Amway' handlers some vey specific questions which, just like Bernie Madoff, they cannot answer directly. However, Trivedi has revealed that he accepts that 'Amway' makes no distinction in its published 'multi-billion dollar sales figures' between internal ('wholesale') transactions and external ('retail') transactions. This is rather remarkable, considering the fact that, in 1979 (in order to avoid criminal prosecution), 'Amway's' lawyers promised the US Federal Trade Commission that no 'Amway' commission agents would qualify to receive bonus payments unless they could prove that they were retailing the overwhelming majority (by value) of their own purchases on to persons who were not agents of 'Amway'. At this time, the FTC (with a naivety that beggars belief) trusted the bosses of the 'Amway' mob to put their own shifty edifice in order.

David Brear

Real friends always tell truth Trivedi

Shyam

A wise friend of mine (who has been following your Blog with great interest) has made a good point. She wants to know how Trivedi can continue to believe the 'Amway' Ministry of Truth, when it is obviously in the financial interests of the organization to lie him? Yet Trivedi refuses to believe us when we have no financial interest in lying to him.

This brings me back to what I have already told Trivedi:

In life, it is your real friends who continue to tell you the truth (no matter how painful this might be) whilst your enemies tell you attractive lies.

David Brear

Trivedi should ask his handlers why secrecy?

Shyam
Your free-thinking readers are now witnessing how schoolboy Trivedi still prefers the pretty 'Amway' fairytale ('Billions of Dollars of Sales via Millions of Prosperous Distributors') to the ugly reality (massive attrition/drop-out rate due to universal insolvency) lurking behind it.
Typically of a cult, the 'Amway' Misistry of Truth has made a damn good job of alienating Trivedi's from the truth and destroying his trust in all external sources of information. He remains convinced that 'Amway's figures' are authentic, and the fact that these have been widely-repeated (without any qualification) by ill-informed third parties does not help. Unfortunately for Trivedi, 'Amway's' so-called 'sales' only represent the size of the (effectively) closed-market (i.e. the amount of money which is flowing into the hands of the billionaire bosses of the 'Amway' mob from their adherents). Tellingly, the 'Amway' Ministry of Truth has steadfastly boasted 'Billion Dollar Annual Sales,' but it has deliberately never made any distinction between authentic retail sales (to persons who are not agents of the organization) and internal transactions. In the same way, the 'Amway' Ministry of Truth has steadfastly boasted 'Millions of Independent Business Owners', but it has never revealed that only a tiny minority of these people remain in 'Amway' for more than 5 years.
Fortunately, all Trivedi has to do to discover that he is being manipulated by some very evil people, is put the following questions to his 'Amway' handlers:
- Over the last several years, what percentage (by value) of 'Amway's' published 'multi-billion dollar sales' have actually been to persons who are not agents of the organization?
- Over the previous 5 year cycle, what has been the overall attrition/ drop-out rate amongst non salaried 'Amway' commission agents ?
- Why have these figures been kept secret ?
There is no way that Trivedi will get intelligible answers from 'Amway.'
David Brear

Poor lad Trivedi still lamely asks how Amway is surviving

Shyam
Dealing with Trivedi, is like dealing with a stupid schoolboy. Even now, after it has been clearly explained to him, the poor lad still lamely asks how 'Amway' survives if the company has a 100% drop out rate?
Given the quantifiable evidence, any free-thinking person can see that 'Amway' continues to survive, because each year (by the organization's own figures) around 3 millions individuals sign contracts, but of these 3 millions, only around 1.5 millions are existing contributing participants. Around 1.5 millions 'Amway' failures are vanishing each year, to be replaced by 1.5 millions more wide-eyed dreamers. The hidden attrition/ drop-out rate on a 5 year cycle (2000-2005) for the so-called 'Amway Business Opportunity' was calculated at a massive 95% by external financial auditors with full-access to 'Amway's' own internal accounts.
In simple terms, this means that for every 100 ill-informed persons (like Trivedi) who get involved with 'Amway' falsely believing it to be a viable marketing scheme, after 5 years, only 5 remain. The number who remain after 10 years, is a fraction of 1%. Thus, 'Amway' is a vast snowball which has always had an (effectively) 100% overall, rolling, attrition/drop-out rate. The few persons who are constantly depicted as shining examples of 'Amway Success,' are merely schills whose wealth does not, in fact, derive from their so-called 'Amway Businesses' at all.
The 'Amway' Ministry of Truth (exactly like its 'Scientology' equivalent) steadfastly pretends the organization to be stable and to comprise millions of happy, healthy and prosperous adherents, when, in reality, the overwhelming majority of these persons are merely transient customers, contributing participants in an economically-unviable closed-market.
As for Trivedi's continued belief that 'Amway' s' kosher wampum represents good value. How does the poor lad explain the fact that masses of it is available all the time (and untouched) on e-bay, at a fraction of its original controlled price?
David Brear

The MLM is a marketing fraud

A new essay recently posted on the False Profits Blog addresses a question many of you have raised. Why are multi-level marketing pyramids and financial ponzis able to ensnare so many people today? What is the power behind this Main Street epidemic? This question goes beyond the lack of law enforcement, the failure of the FTC and SEC, or the difficulty of grasping "exponential expansion."

The False Profit Blog ventures an answer: It is that pyramid schemes, operating as multi-level marketing, are a new form of fraud that public awareness and law enforcement have not caught up to. This new form of fraud is called "marketing fraud." Marketing fraud evolved from the earlier stages of "product frauds" and "financial frauds." It uses bogus or overpriced products and deceptive money transactions like older models of fraud do, but that is not the heart of this new fraud.

The power of this fraud is in marketing. It employs the most powerful tools of business today -- branding, positioning, community and identity -- to swindle. Like all powerful marketing, fraudulent marketing promises to fulfill basic and crucial needs, much more valuable than just money or the hyped up benefits of products. The needs that these pyramid marketing scams claim to fulfill address people's deepest longings and their greatest fears. The sophistication of the marketing program, complete with Washington DC lobbyists, trade association, "education" foundation, gifts to charity, celebrity endorsements, sports sponsorships, national conventions, and church affiliations – prevent many in the media and government from grasping the extraordinary deception or to accept the devastating financial consequences they inflict on millions of people.

Even many of the victims cannot believe they were defrauded by an organization of such benevolent outward appearance. Many choose instead to take on personal blame for their misfortune rather than face this reality. Powerful marketing, whether in the employ of legitimate business or pyramid frauds, has the ability to transcend verifiable reality and hard cold facts with its own fictional narrative. The blunt instrument used by marketing frauds to carry out their theft is the "endless chain" or "closed market" a.k.a. pyramid scheme.

This is a classic swindle but is now carried out within a marketing program so powerful it leads the victims not only to fall into the financial trap but to to support the perpetrators against exposure and to enroll their closest friends and relatives into the scam as well.

I will appreciate your comments and thoughts on the Blog.
Robert L. FitzPatrick