'MLM income opportunity' racketeers are The Scum Of The Earth

Shyam 

Your free-thinking readers know that, in the absence of any real government attempt to educate or protect the public, 'Corporate Frauds Watch' is an independent, Indian-based Blog, warning the people of the Republic of India about the danger of organized fraud in general, and of 'MLM income opportunity' fraud in particular.

It is currently estimated that out of a total population of 1.2 billions, 121 millions Indians use the Internet. However, more than half of these people do not have a computer. They access the Net. via their mobile smartphones. There are already 898 millions mobile phone subscribers in India, with an estimated 200 millions more for 2012 http://www.bbc.co.uk/news/business-16354076 . The majority of Indians who seek information on any particular subject, now go to the Net. Thus, the battleground to establish the truth about 'MLM income opportunity' fraud has long-since become the Internet. Yet, no mainstream academic (writing on the Net.) has addressed this major global problem directly. Sadly, 'MLM income opportunity'fraud has been maliciously designed to be beyond the understanding of not just its deluded victims, but also, all casual observers.

I've just finished reading an end-of-the-year article by John Gray, author of 'False Dawn: The Delusions of Global Capitalism' http://www.bbc.co.uk/news/magazine-16245250 . Mr. Gray is certainly not the first academic commentator to recognise that we humans keep repeating the same 'follies and delusions' which have often led us to disaster in the past, but, at the same time, each new generation foolishly imagines itself to be far more clever than all previous generations and, therefore, immune to such avoidable-catastrophies. Mr. Gray also puts forward the unoriginal idea that political/social/economic systems, based on the apparently-laudable theory of 'endless human progress,' have been demonstrably-dangerous Utopian myths, written in a secular, rather than a religious, vocabulary.

The foundation upon which Mr. Gray's (difficult-to-understand) article has been built, is the (easily-understood, but ultimately-inaccurate) metaphor of 'termites secretly-eating a wooden structure,' previously used by the Hungarian writer, Arthur Koestler, to describe (in his book, 'Scum Of The Earth,' published in 1941) how, one dark-day in 1940, western Europeans suddenly woke-up and discovered that a migrating colony of unthinking, and voracious, 'Nazi' insects had turned their carefully-constructed, but destabilized, democratic, world to dust.

Unfortunately, Mr. Gray's thinking remains anchored in the vocabulary of his own academic discipline (political philosophy) and, therefore, his general analysis of present day events is typical of most contemporary intellectuals; for, if your free-thinking readers go through Mr. Gray's article, they will not find any reference to: fraud, manipulation, pseudo-science, corruption, greed, narcisissism, deception, racketeering, lying, etc. Yet these are the enduring cancers (albeit dressed-up in the latest ephemeral-disguise of 'free-market capitalism') which have produced the current world economic crisis and which previously-produced the 'Wall Street Crash' and 'Great Depression' which, in turn, fed the secondary 'Nazi' cancer in Europe, and which are again being allowed to eat their way (largely-unobserved) into the heart of our carefully-constructed, but destabilized, democratic world (this time dressed-up as Utopian 'MLM income opportunities'). 

David Brear (copyright 2011)

'Amway's' survival in the UK was nothing short of miraculous

Shyam

A wise correspondent of mine, has observed that my analysis of the 'MLM' racket as a dissimulated form of unlawful, closed-market bookmaking (where all losing-bets have simply been laundered as 'purchases'), which has been maliciously-designed to provoke a form of chronic gambling addiction, reveals 'Amway's' recent escape from closure in the UK to be nothing short of miraculous; for how is it possible that, when faced with such a wide-open-goal, the UK government brought on a team of short-sighted lawyers who failed to score?

Despite my calls for an intellectually-rigorous criminal inquiry, in 2007, the UK government Trade Minister only filed a low-level public-interest civil bankruptcy petition against 'Amway UK Ltd.', on the technical grounds that the company had been breaking not only UK trading schemes legislation, but also UK lotteries legislation. UK government lawyers and forensic accountants subsequently produced a mountain of unchallenged documentary evidence to demonstrate that, out of the approximately 35 000 British 'Amway' adherents registered in 2006, the hidden loss-rate was effectively 100%, and that, for the insignificant percentage of winning 'Amway' participants to receive some payment, the overwhelming majority had to keep paying into the 'scheme.' In presenting their far-from-intellectually-rigorous case to the UK High Court, UK government lawyers described the minority of chronic-losers in this demonstrably-dangerous, rigged game of 'commercial' make-believe, as being 'deluded.' However, no psychotic 'Amway' victim, nor expert witness to his/her dangerous state of mind, was called to give evidence. Instead, after a lot of legalistic arguments, Mr. Justice Norris accepted the UK government's simplistic claim that the 'Amway trading scheme' had been in breach of trading schemes legislation (because unlawful registration fees had been required), but curiously, he rejected the government's other simplistic claim that the 'Amway trading scheme' had been in breach of lotteries legislation (because it was not advertised as a 'lottery' and a few lucky participants had apparently been paid out). The Judge then broke established legal precedent and refused to order  'Amway UK Ltd.'  to hand over all the millions of pounds of what he accepted to be unlawful registration fees (which would have forced the company into technical-bankruptcy and obligatory-closure), when 'Amway's' lawyers made the demonstrably-false declaration, and absurd related-promise, that their employer's previous unlawful activities had all been completely involuntary, but had now been completely reformed, voluntarily.

Later, the UK Appeal Court (in a two to one majority verdict), upheld Judge Norris' controversial decision to accept the word of 'Amway's' lawyers, and not to order the immediate-closure of  'Amway UK Ltd.', after the UK government's short-sighted legal team had challenged it on the not-unreasonable grounds that it was neither safe for the public, nor correct in law. This typically-complicated legalistic outcome allowed the 'Amway' Ministry of Truth to pretend that the 'Amway MLM income opportunity' had now received the full-approval of the UK Courts. In other words, 'Amway UK Ltd.' effectively plead guilty to running an unlawful trading scheme for 34 years, and was duly found guilty of running an unlawful trading scheme for 34 years, but received no punishment other than that which the demonstrably-dishonest legal representatives of this demonstrably-dishonest organization, falsely-claimed to have imposed on itself.

Yet, consider for a moment, if the demonstrably-fake 'Amway MLM income opportunity' had been advertised as a 'viable gamble' rather than as a 'viable trading scheme'. Also, consider for a moment, if the wider-evidence had been presented to the UK Courts, in an intellectually-rigorous, criminal prosecution. 

What would any honest Judge have said when it was proved, beyond all reasonable doubt that, for 50+ years, tens of millions of constantly-churning  'Amway' adherents around the world (including at least one million from the UK) have been deceived into participating in a completely-incomprehensible, endless-chain recruitment game (presented as a viable income opportunity), in which they haven't had a hope of winning, but in which they have been subjected (without their fully-informed consent) to co-ordinated devious techniques of social, psychological and physical persuasion, designed to shut-down the individual losing-players' critical and evaluative faculties, and oblige them to keep betting on themselves to win, no matter what suffering this has caused ?

David Brear (copyright 2011)

Core-'MLM' victims are like chronic gambling addicts

Shyam 

In all lawful and unlawful gambling, the (unwritten) golden rule for the house, is 'keep the gambler playing,' because, no matter what is won in the short-term, in the long-term, the odds on winning are tipped in the favour of the house and, consequently, the chronic-gambler will eventually almost-certainly lose overall. Thus, the profession of running a casino, or of bookmaking, is to make sure that the odds are always tipped in the favour of the house. In lawful gambling, regulation exists which ensures that gamblers have some chance of winning in the short-term, but in unlawful gambling, no such regulation exists.  

In France, private, or open-market, bookmaking has been illegal for decades. However, the Internet has recently led to radical changes in French gambling laws. The bookmaking system that has been operated lawfully in France, is the 'Paris Mutuel'  a.k.a 'Totalizer.'  In this, all bets on any particular horse race have been gathered through government-licensed, and tightly-regulated, offices, into a closed central fund. The odds on each horse winning, can fluctuate right up to the start of the race, because they are worked-out depending on how much of the fund has been gambled on any particular animal. A small fixed-percentage of the fund is retained by its organizers, whilst a higher fixed-percentage is paid out to the winning gamblers. This closed-market 'Paris Mutuel' system resembles an inverted, mutual insurance fund. When run correctly, the system is guaranteed never to lose money for its organizers, because it is based on transferring the losing gamblers'  money to the organizers and to the winning gamblers.  

Unless they have been chronic gambling addicts (dissociated from external reality), then all players of the 'Paris Mutuel', have been fully-aware that they risk losing what they bet.

More than 50 years of evidence, in the form of tens of millions of previous losers, proves that (for the ordinary player) the odds of winning any net-benefit in the effectively closed-market 'Amway' game of 'business' make-believe, have been zero. Exactly as in the 'Paris Mutuel,' the only real money flowing into the 'Amway' system has come from the players and, thus, the organizers, who have retained a significant fixed-percentage, can never lose. However, unlike the 'Paris Mutuel' the insignificant few players who have been seen to be winning massively, are always the same grinning schills, whilst the overwhelming majority of constantly-churning players have can never ever win, because the game has been secretly-rigged to produce, and to hide, universal loss.

Chronic 'MLM' addicts have been conditioned to believe that they are Independent Business Owners who, if they do not question the authenticity of their  'risk-free MLM income opportunities' and continue to duplicate the '100% positive' example of their leaders (i.e. consume and recruit), will soon also become massive winners.  Unfortunately, this is a cruel lie designed to load its victims with guilt.

All the evidence proves that if you fall for this pernicious blame-the victim fraud, you will lose some money. However, the longer you remain, the more you will lose. The worst 'MLM' victims have quite literally lost everything, and some have wound up killing themselves. 

Many observers have compared core-'MLM' victims to chronic gambling addicts; for both groups live in denial of external reality - only ever declaring their short-term winnings and hiding their overall net- losses.

David Brear (copyright 2011) 

How does anyone lose money in Amway scam?

People wonder sometimes how do they lose money if they simply join schemes like that of Amway Enterprises or for that any matter any such scams. Moreover, recently Amway Enterprises has announced that there is no entrance fee to join it as IBO. If anybody asks them to become they would readily agree to become a member. They never realise that they are entering a cobweb.

This is how they lose their hard-earned money.

Every IBO must buy products worth at least Rs. 2000. That means in effect they purchase products worth Rs. 24,000 every year. They would be encouraged to approach their friends and relatives to become members and purchase products with the inducement that they would earn more commission if the new recruits also buy products. However, it would be very hard for them to convince the new recruits to purchase products. On the  other hand, they could find no one to purchase products which are exorbitantly priced from them. Wisdom would dawn upon them soon and they would be ready to stop purchase products within a short period. However, his upline would bring pressure on him to buy products and recruit more people. The new recruit would be told that if he creates his own group he would earn lot of commission.

He could not create his own group who would be willing to buy products every month. He would be disillusioned soon and starts blaming himself. He hears from his upline blatant lies that every other IBO is making lots of money and it is his fault for his failure.

By that time the IBO would have spent sizable money from his pocket to buy products. He does not know what to do. It is a Catch 22 situation.

Ultimately he resigns and stops buying products. But by that time he is poorer by several thousands of rupees.

Shame on Kevin Kiley, head of the Massachusetts Bankers Association, who supports the bankster, Richard Syron

Shyam

This time, I had to laugh when I read the demonstrable lie that the Chief Operating Officer of the Massachusetts Bankers Association, Kevin Kiley, has apparently told reporters from the Boston Globe about his friend, Richard Syron (the former CEO of 'Freddie Mac') who stands accused of securities fraud.

Mr. Kiley (apparently sober and in all seriousness) described Mr. Syron (a liar who presided over the secret ruining of one of the largest mortgage agencies in the world) as 'an outstanding businessman,' and he went on to declare that he was 'surprised that the Securities and Exchange Commission had taken action' against him. 

http://www.thisismoney.co.uk/money/news/article-2075244/Fannie-Mae-Freddie-Mac-bosses-charged-misleading-public-mortgage-risks.html?ITO=1490

Here, in the adult world of quantifiable reality, we are surprised that the US Justice Dept. has not yet charged Mr. Syron (and his lying associates) with offences under the US federal Racketeer Influenced and Corrupt Organizations Act, 1970.

Mr. Kiley obviously was not one of the direct victims of Mr. Syron's lies. His supine commentary is self-evidently based on his friendship with Mr. Syron, and on his friend's other lawful, commercial activities. However, Mr. Kiley's morally and intellectually bankrupt statement insults the intelligence of every tax-payer around the world who has been made ultimately responsible for the catastrophic results of Mr. Syron's multi-billion dollar fraud.

Mr. Kiley's absurd opinion, is the same as suggesting that a previously-respectable banker, charged with passing (what anyone with an ounce of common sense should have known to be) billions of dollars of counterfeit banknotes, should be judged on the grounds that 86% of the money in the bank was not fake, and only 14% this, otherwise-honest, fellow's 'money' contained flaws.

If Mr. Kiley reflects the general moral and intellectual standard of leading American bankers, then it's no wonder that the world is on the verge of an economic melt-down.

David Brear (copyright 2011)

Six US 'banksters' now face civil fraud charges

Shyam, 

As ever, I didn't know whether to laugh or to cry, when, today, I read the latest news from the USA. http://www.bbc.co.uk/news/business-16228158

Six former executives of what were once styled as 'the world's largest mortgage agencies', 'Fannie Mae' and 'Freddie Mac,' have been charged (in a civil prosecution filed in a federal court in New York city, by the US Securities and Exchange Commission) with fraud.

Meanwhile, years after the event (and with a global economic depression looming), the US Justic Dept. says it has 'begun investigating.'

According to the NY lawsuit, 53 year old Daniel Mudd,  50 year old Enrico Dallavecchia and 53 year old Thomas Lund (the former: CEO, Chief Risk Officer and Executive Vice President of 'Fannie Mae'), along with 68 year old Richard Syron, 58 year old Patricia Cook and 53 year old Donald Bisenius (the former: CEO, Executive Vice President and Chief Business Officer of 'Freddie Mac') made'material mis-statements.' 

In plain English, these shameful, but shameless, 'banksters' actually stand accused of telling multi-billion dollar lies, and of provoking, and attempting to conceal, the onset of the largest global financial catastrophy since the 'Wall Street Crash' of 1929 (which itself triggered the 'Great Depression' of the 1930s - and which, in turn, led to rise of Fascism and WWII).

The lawful traditional business of 'Fannie Mae' and 'Freddie Mac' was the buying of secured mortgage loans from banks and other institutional lenders, packaging these debts into guaranteed-bonds and then selling them to investors internationally. During the early years of the 21st century, a significant part of the previously-lawful enterprises of both these companies became completely unlawful, because their chief executives oversaw the buying, packaging and peddling of liar-loans which (in the pursuit of huge short-term profits for banks and resulting huge bonus payments for bankers), had been fraudulently-approved to many millions of poor Americans who could not afford to repay them (in the long-term). Whilst the US real estate market remained strong, the looming-catastrophy remained hidden. However, when the market collapsed, 'Freddie Mac' and Fannie Mae' had already knowingly: bought, packaged, peddled and fraudulently 'guaranteed' a phenomenal quantity of worthless paper to countless victims around the world.

In 2007, the 'Fannie Mae' executives falsely-declared that their company held just $4.8 billions of high-risk loans, when, in fact, it was facing inevitable collapse due to $43 billions of toxic-debt (some 11% of its total portfolio). Similarly, in 2006, the 'Freddie Mac' executives falsely-declared that their company held between 2 and 6 $billions of high-risk loans, when, in fact, it was facing inevitable collapse due to $141 billions of toxic debt (some 10% of its total portfolio). Furthermore, by 2008, 'Freddie Mac's' toxic debt had climbed to $244 billions (some 14% of its total portfolio).

In September 2008, the truth finally came out, and  Bush administration was obliged to take control of both these secretly-insolvent agencies to prevent them from collapsing. Their top executives were either fired or they were forced to resign. To date, US tax-payers have given $150 billions to keep them afloat, and this could rise to a colossal $259 billions.

All this, means that certain US civil regulators have lately-accepted that persons in control of at least two major US financial institutions were engaged in a pattern of ongoing major racketeering activity, comprising fraud and the obstruction of justice, etc., during 2006- 2007. However, the US Justice Dept has (so far) refused to enforce federal RICO legislation which covers these serious criminal acts.

Perhaps the most extraordinary thing to come out of these recent civil charges, is the immediate defence to them. The executives' attorneys don't actually deny the charges, what they say is that US government regulators are in no position to charge their clients with fraud, because US government regulators were, at all times, fully-complicit with what was occurring. 

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/12/16/BU1A1MDGSM.DTL&feed=rss.business

I would respectfully suggest that the US Justice Dept. should perhaps be investigating, and charging, certain officials at the SEC, under RICO legislation, but then there are certain officials at the US justice Dept. who probably should be investigated themselves.

Difficult as it is to believe, Daniel Mudd ( who was fired from 'Fannie Mae' in 2008) currently holds the position of CEO of the 'Fortress Investment Group' in New York; whilst Richard Syron (who resigned from 'Freddie Mac' in 2008) is an Adjunct Professor at Boston College.

Personally, I wouldn't want to employ either of them (not even to sweep my floor). 

David Brear (copyright 2011)

What possible legitimate reason could US Justice Dept. officials have for refusing to indict the crooks whose greed triggered the world economic crisis?

Shyam 

I observe that, under pressure from campaigners (like Anna Hazare), the Indian government is reluctantly still trying to decide how to appear to be tackling the problem of corruption.

http://www.ndtv.com/article/india/lokpal-bill-all-party-meeting-today-cbi-the-only-flashpoint-157760 

However, I would respectfully-suggest to your free-thinking readers that, if they take the time to examine the wider-picture, all this apparently laudable activity in India, is merely the equivalent of trying to catch (and to re-arrange) one sliding-deck-chair on the rapidly-sinking Titanic. 

It is generally accepted that the current world economic crisis (which is probably about to turn into another Great Depression) was triggered by a chain-reaction of related-frauds perpetrated by the greedy, and increasingly-desperate, bosses of American financial institutions. These wealthy crooks, gambled that they would not be held to account, because their government (influenced by their own agents occupying key-positions in the Federal Reserve) could easily be made to feel obliged to print, and/or borrow, and inject into their collapsing-criminogenic system, vast sums of money (the interest on which would ultimately be born by ordinary tax-payers), believing this fundamentally-unjust strategy to be the only way to stop the entire global economy from collapsing. However, various well-informed observers (like William K. Black) warned that 'bail-out' was only a way of delaying the entire global economy from inevitably collapsing.

http://www.youtube.com/watch?v=Rz1b__MdtHY 

Instead of a corrupt doctor's prescription of a diluted socialist medicine to cure the symptoms this purely-criminogenic cancer dressed-up as 'free-market capitalism,' intellectually rigorous, and honest, commentators simply called for the underlying problem, fraud and corruption, to be cut-out, and for the rule of law to be restored in the USA.

In brief, the real position is as follows: Right under the noses of stupid, and/or lazy, and/or corrupt, US financial regulators, on the obviously-specious grounds that the value of American real-estate would continue to increase ad infinitum, a significant number of major, and minor, American financial institutions all began to make apparently 'secure and profitable,' but actually unsecured and catastrophic, mortgage loans to countless, aspiring poor persons who had no means of repaying them. However, since it appeared that the high-levels of projected-interest from these 'liar loans' was going to boost the lenders' profits, the individual bankers who approved them, pretended success; thereby, allowing them all to keep claiming increasingly-juicey, but fraudulent, commission, and bonus, payments on theoretically-expanding profits which couldn't actually exist. Thus, it became in the short-term financial interests of all these greedy criminals, to ignore reality and keep approving more and more 'liar-loans.' Consequently, they were aggressively-marketed.

When the American real-estate market inevitably began to stagnate and the bosses of certain American financial institutions faced the reality that, eventually, they could be left collectively-holding trillions of dollars of effectively-worthless assets, they conspired to get rid of their stinking heap of toxic-debt; so-they packaged it up, gave it various sweet-smelling labels and fake ribbons of approval, and began to peddle it to countless ill-informed victims all around the world as a 'secure investment.' However, since there was too much of it, the same criminals (knowing that their economically-suicidal enterprise was on the point of collapse  and exposure) took out insurance to protect themselves. This had the added-effect of pushing one of the world's largest insurance companies, 'AIG,' into a position of insolvency.

To date, despite billions of tax-payers around the world being penalized by the resulting-economic-crisis, no one responsible for perpetrating, or permitting, these  frauds has been indicted by the US justice system. Furthermore, we do not yet know what the final catastrophic results of allowing these historically-significant crimes to go completely unpunished, will be. 

David Brear (copyright 2011)

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