Thursday, 2 September 2010

The UK Companies Act is a license to steal

You are very fortunate that senior Indian police officers are prepared to accept criminal complaints about so-called 'MLM' companies defrauding Indian citizens.
As you know, despite determined and well-informed complaints, no criminal enquiry has ever been launched into the 'Amway / MLM' racket in the UK. Indeed, approaching the UK Fraud Squad or Serious Fraud Office with a complaint about 'Amway UK' has been as pointless as approaching these same law enforcement agencies with a complaint about a major cigarette manufacturing company. Remember, the UK SFO accepts that fraud is a multi-billion pound annual problem in the UK, but last year this (300+ employee) agency managed to recover far less than its own (£40+ millions) costs from successful court actions.
As you also know, the only UK law enforcement agency which was finally-prepared to accept a complaint about 'Amway UK' was the UK Dept. of Trade and Industry, Companies Investigation Branch. This agency (which recently became the UK Ministry for Business Enterprise and Regulatory Reform, Companies Investigation Branch) has successfully closed various so-called 'MLM' companies in the past, by filing public interest bankruptcy petitions after uncovering systematic breaches of UK trading schemes and lotteries legislation. In brief, if it can be proved that a UK-registered, so-called 'MLM' company has derived profits from an illegal money circulation scheme, then that company can be ordered to repay all its ill-gotten gains and (by legal precedant) be automatically bankrupted, and closed, as being technically-insolvent (i.e. its assets cannot cover its significant new liabilities). In theory, only after a company is closed, would it be possible for a criminal fraud enquiry to be launched in the UK, but, in practise, this rarely happens.
In this way, the UK government halted the activities of an 'Amway' copy-cat, Mr. Alan Kippax (who was using the absurd 'Treasure Traders International Ltd.' as a corporate front). Typically, Kippax had made sure that his fake company had no capital assets to seize in the UK and, even though this front for fraud was technically-bankrupted and closed, its owner was allowed to abscond back to Canada with bundles of stolen cash. Unlike the billionaire bosses of the 'Amway' mob, Kippax had no reason to try to sustain his fake company in the UK. However, when their wide-eyed agents were caught running an illegal money circulation scheme in the UK (and BERR tried to close their UK corporate front as being systematically in breach of UK trading schemes and lotteries legislation), the 'Amway' mob hired Eversheds LLP (for a fee believed to exceed £1 million) to try to block the BERR bankruptcy petition. Obviously, this tactic was designed to prevent a criminal enquiry and, thus, obstruct justice. At this time, Eversheds LLP counted a former Deputy Director of the UK Serious Fraud Office, Peter Kiernan, amongst its staff, but even he was unable to convince the UK government to accept his employer's assurances that 'Amway UK Ltd.' would stop breaking the law. Instead, UK government lawyers proceeded with the petition in the High Court. However, the 'Amway' mob managed to avoid the loss of their UK front by effectively closing it down themselves and by promising a High Court judge that, in future, the activities of 'Amway UK Ltd.' would strictly comply with UK law.
During the UK court proceedings it was revealed that:
- 99% of 'Amway's' non-salaried commission agents had been losing money in the UK
- 93 % of 'Amway's non-salaried commission agents freely-accepted that they never tried to sell any products
- 'Amway UK Ltd.' had never declared an annual trading profit since its creation in 1973
- For several years 'Amway UK Ltd.'s' multi-million pound annual trading losses had been secretly plugged by dividends from shares held by 'Amway Europe' in 'Amway S. Korea'.
- an unspecified quantity of cash (believed to total hundreds of millions of pounds) had been generated by various other corporate structures which had peddled the participants in 'Amway's' scheme publications, recordings, tickets to meetings, etc., all of which promoted the guided- dream that anyone could achieve 'Total Financial Freedom' in 'Amway'
Officially, civil servants in BERR were obliged to take the blinkered view that since 'Amway UK' has always been a legally-registered corporate structure, then this privately-owned, limited-liability, commercial-company had the right to be treated like any other such entity. Consequently, the recent investigation of 'Amway UK's' activities by BERR accountants and lawyers was severly-restricted as it fell under the provisions of the UK Companies Act. However, privately, senior civil servants in BERR freely-accepted that 'Amway UK' has been the front for a series of foreign-based swindles and that the long-term victims of these swindles have been brainwashed dupes. Sadly, the UK Companies Act precludes UK trade officials from making any public statement regarding any legally-registered UK company and, legalistically, brainwashing does not exist in the UK.
David Brear (copyright 2010)