Monday, 12 September 2011

The bosses of organized crime groups hide behind corporate labyrinths

For a while, Corporate Frauds Watch has been receiving a string of self-contradictory comments signed by an American, Kasey Chang. This fellow has, so far, offered us no frank explanation of what exactly sparked his own interest in 'MLM income opportunity' fraud and cultism.
Although Mr. Chang claimed to have virtually no knowledge of 'Amway' and, consequently, no opinion to offer, he has lately revealed that he has, in fact, detailed knowledge of lawsuits filed against 'Amway' in the USA and, furthermore, he has continued to offer your readers strangely-familiar, reality-inverting opinions of these disturbing matters (written in a strangely-familiar style). In brief, Mr. Chang is a perplexing nuisance who has attempted to pretend affinity with the authors of this Blog, but at the same time he has also tried to post material on CFW which could have come from the 'Amway' Ministry of Truth. When we have objected to this, Mr. Chang has misquoted, and/or misrepresented, what we have said, and posed as an innocent, fair-minded victim under attack.
Recently, Mr. Chang has attempted to impose his less-than-intellectually-rigorous notions on key-issues concerning  'MLM income opportunity' fraud, in opposition to my own published, in-depth analysis of this dangerous phenomenon, but, simultaneously, he has steadfastly pretended to be in broad agreement with CFW. 
Self-evidently, Mr. Chang's self-contradictory comments are in no way in agreement with my own analysis.
For a long time, I have been saying that the quantifiable evidence proves the organization most-commonly referred to as 'Amway,' to have been a major organized crime group, the bosses of which have steadfastly pretended moral and intellectual authority whilst running a closed-market swindle, dissimulated as an 'MLM income opportunity', and related advance fee frauds, dissimulated as 'training and motivation systems'. The 'Amway' organization has comprised a Mafia-style labyrinth of corporate structures pursuing lawful, and/or unlawful, enterprises. This classic edifice has been set up by the billionaire bosses of 'Amway' in order to prevent, and/or divert, investigation of their clandestine activities and isolate them from liability. The instigation of a such a criminogenic structure is defined by US federal legislation as 'engaging in a pattern of racketeering activity.'
The Racketeer Influenced Corrupt Organizations (RICO) Act (enacted by section 901 [a.] of the Organized Crime Control Act) is a United States federal law which (in theory) provides extended criminal penalties for, and powerful civil remedies against, the leaders and agents of ongoing criminal organizations and their de facto associate enterprises. In the early 1960s, after Robert Kennedy was appointed Attorney General, the US Dept. of Justice was given a significant role in a co-ordinated national ‘Strike Force,’ established under the direction of the Inspector General of the US Dept. of Labor. This new initiative was the product of an overt, joint congressional policy to hold the leaders of major organized crime groups to account, as well as dismantle their webs of corrupt political figures, judges, attorneys, trade union officials, senior law enforcement agents, etc. Indeed, the long-time Director of the FBI, J. Edgar Hoover, is now generally considered to have been under the influence of racketeers who were certainly bribing, and probably blackmailing, him. Despite a growing mountain of conclusive evidence, for decades it was the official policy of the FBI to deny the existence of the ‘Mafia'. Yet, the average American knew full-well that a pernicious, criminal underworld had been steadily gnawing its way into traditional culture since the US government had (effectively) handed the multi-billion dollar alcohol industry to gangsters during ‘Prohibition’ (1919-1933). However, although the Democratic administration’s will to protect US citizens was apparently hardened by the assassinations of President Kennedy and Robert Kennedy, existing legislation was inadequate. Paradoxically, the US Justice Dept. had an ‘Organized Crime and Racketeering Section,’ but technically no such offences existed. Thus, RICO was signed into law in 1970 by the new Republican President, Nixon, but only as a result of ground-breaking recommendations made in the late 1960s by President’s Johnson’s Commission to Examine Crime in America. The Bill was drafted by Prof. G. Robert Blakey (former Special Attorney in the Organized Crime and Racketeering Section of the Justice Dept.) under the close supervision of the veteran Democratic Senator for ArkansasJohn Little McClellan. Subsequently (guided by Prof. Blakey), a number of individual States enacted similar legislation.
RICO was, in many respects, an unprecedented law for a democratic republic in time of peace. Indeed, its many opponents still take the position that it steps way beyond the bounds of the US Constitution. Ironically, RICO was designed to protect the US Constitution and reduce an ongoing internal threat to democracy and the rule of law that was considered equally dangerous to any external menace. However, in 1970, RICO appeared for all the world to be directed only against the Italian American ‘Mafia’ (although its authors steadfastly refuted this). Whether intentional or not, the Italian-sounding acronym, RICO, is unfortunately the same as that of the anti-hero of the classic 1931 Hollywood gangster movie, ‘Little Caesar’ (starring Edward G. Robinson, directed by Mervyn LeRoy and based on the 1929 Novel by William R. Burnett). RICO was drafted by lawyers for lawyers and is, therefore, legalistic, but, at first glance, it can appear to be written in plain language; mainly because it also contains many popular terms. Even when deconstructed, the Act  (like the phenomenon it addresses) cannot be fully-understood in isolation. In reality, in respect of the ‘Mafia,’ RICO legislators were trying to shut the stable door long after the horse had bolted. Indeed, another full decade was to elapse before a ‘Mafia Boss,’Frank Tieri, was actually convicted.

Under RICO, an individual who is a member of any enterprise that has committed any two of 35 crimes (27 federal and 8 State) within a period of 10 years can be charged with ‘racketeering activity.’ The penalty for this crime is a fine of $250 000, and/or 20 years in prison, per racketeering count. In addition the convicted racketeer must forfeit all benefits and any interest on these benefits derived from a ‘pattern of racketeering activity.’ RICO also allows for any individual victimized by the actions of a criminal organization to file a civil suit against the racketeers and, if successful, claim triple damages. Furthermore, when a person is indicted under RICO, the US Attorney has the option of seeking a pre-trial restraining order, or injunction, to seize the defendant’s assets and, thus, block the transfer of property which might be forfeited in the future. Rico violations include: embezzlement, theft, fraud, obstruction of justice, money laundering, kidnapping, extortion, drug trafficking, dealing in obscene material, slavery, murder, arson, acts of terrorism, etc. The US Supreme Court decided that a ‘pattern of racketeering activity’ is proved when criminal acts are related (i.e. ‘they have the same or similar purposes, results, participants, victims or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events.’). RICO can be applied in cases where retributive, and/or retaliatory, civil, and/or criminal, prosecutions are brought by racketeers against individuals (and corporate structures) who co-operate with federal law enforcement, and/or intelligence, agencies. The malicious utilization of the courts by racketeers, and their attorneys, to  punish and/or silence, whistle blowers, and/or victims, is also in breach of RICO. 
David Brear (Copyright 2011)


Shyam Sundar said...

One of our readers, JIJIBose has left a new comment on the post "The bosses of organized crime groups hide behind c...":

Mlm truth.
Shyam sundar
u r saying MLM is illegal. The real fact is DSA(direct selling association) is a body formed all legalities about mlm business worldwide. U r pointing the price is high so its coming under money circulation act. It is not correct. A company doing business with fake products or without product through mlm is illegal. U will get more details from WFDSA web site. Here all company doing business with a channel of people/companies.
The price, quality and quantity are the factors checking by the govt body for legal matters. Th govt couldn’t involve all three factors for a product. That means if th govt involve in price, quantity and quality will be decided by th company. Nobody can’t legally complain about the price, quality and quantity. For eg apple iphone’s price and other mobile phones price. The price depend upon lots of reasons like patency, ideas, quality, quantity, brand value etc..
In this world companies spend lots of money for marketing and distribution channel commissions and other incentives. Like that legal DSA/MLM companies giving the money for marketing and distribution. The main difference is normal distribution needs huge investments, in mlm a person can start individually without investment . here in mlm lack of knowledge about marketing and other fact lead to failure(Sometimes creating some legal issues also).These are pointing that individual’s failure not for the company or mlm business.
And lots of more details …………….i will discuss later.

Corporate Frauds Watch replies:

Dear Bose DK
It is not the mere highpriced products but the business model of Amway India that makes it a pyramid scheme attracting the provisions of Prize Chits & Money Circulation Schemes (Banning) Act, 1978. Andhra Pradesh High Court pointed out that subcription to become a member and commission on the products sold/purchased by the downline members satisfied the provisions of the Act of 1978.
It is the High Court decision not my personal opinion. The High Court held that the business model of Amway is illegal.

GuyReviews said...

Mr. Brear,

As I attempted to reply and my comment was deleted by Shyam for being "unsolicited", perhaps you can help clarify one or two things: which of the 35 defined "racketeering activity" applies to MLM?

The Amway civil RICO lawsuit tried to apply wire fraud and mail fraud. Are there any OTHER racketeering activities that would apply?

As for the interest in "income opportunity", I got into it by investigating the TVI Express scam, which also beats the drums of MLM. Did you acknowledge that yourself a few months back, when we were somewhat friendlier?


GuyReviews said...

Mr. Brear,

A further clarification:

I am sufficiently convinced that the MLM fraud is systematic and organized. After all, it had decades to entrench itself.

I am simply not convinced that the RICO act is the right weapon against it.

(And no, I don't have any alternatives.)

I wish to make this clear before you and Shyam somehow misconstrue my question as some sort of challenge on your authority or conviction.