Saturday, 14 May 2016

'ACN' is another 'Amway' copy-cat blame-the-victim 'MLM Income Opportunity/Prosperity Gospel' cultic racket.

See original image

See original image



'ACN'  (aka 'Benevita') is another 'Amway' copy-cat blame-the-victim 'MLM Income Opportunity/Prosperity Gospel' cultic racket.

https://www.youtube.com/watch?v=n8WDt-2SKFs

http://www.foxla.com/news/139720670-story

Anyone claiming, or implying that it is possible to earn an overall net-profit lawfully from participating in the so-called ACN income opportunity, is not telling the truth. In reality the hidden, overall loss/churn rate for the so-called 'ACN opportunity' has been effectively 100%, because  the so-called 'ACN opportunity' has had no significant or sustainable source of revenue other than a never-ending chain of its own losing participants. Thus, in the UK, the so-called 'ACN opportunity' is in flagrant breach of the Fraud Act 2006, for the simple reason that its quantifiable results have been deliberately withheld from all persons signing up for it and who have inevitably wasted their time and money in the false expectation of future reward.

See original image



The parallels between the 'ACN/Benevita' fairy story, peddled as reality by  Robert Stevanovski, Greg Provenzano, and twin brothers Tony and Mike Cupisz, and the the 'Nutrilite' fairy story, originally peddled as reality by Carl F. Rehnborg, are quite remarkable. In brief, all these crooks have played the unoriginal role of ordinary men, turned super men - prepared to share their secret of unlimited health, wealth, happiness and freedom with anyone (for a price). However, this again is hardly surprising, because ‘Nutrilite Products Company Inc.’ was, after all, the prototype corporate-front for all subsequent 'Multi-Level Marketing/Prosperity Gospel Income Opportunity' rackets.


In the 1950s, 'Nutrilite' was a highly-controversial trademark owned by Carl F. Rehnborg a.k.a. 'Dr.' Rehnborg, a previously-penniless, American toothpaste-salesman (of German origin) who'd acquired a considerable fortune by reinventing himself as a historically-important, visionary-scientist, autodidactic scholar and philanthropic businessman. Lawyers from the US Food and Drug Administration Bureau of Enforcement, who successfully-challenged the authenticity of some of Rehnborg's many absurd lies in the federal courts during two decades, privately knew him to be nothing more than one of a trio of sinister quacks protected by an echelon of shyster attorneys, who’d combined, and updated, the medicine show and Ponzi-scheme to reflect the spirit of the age. However, Rehnborg was no ordinary charlatan. He almost certainly suffered from severe and inflexible Narcissistic Personality Disorder. 

Former penniless science-fiction author, turned multi-millionaire, cultic racketeer, L. Ron Hubbard, posing as a historically-important,visionary scientist and philanthropist who had discovered the secret of how ordinary humans can become healthy, wealthy happy and free super humans. Hubbard was also prepared to share this secret with anyone (for a price).
The Nutrilite Story
Tellingly, Rehnborg's own comic-book version of his life and achievements (set-down in various published documents, including a book signed by his son and heir, Sam Rehnborg), reads uncannily like the autobiography dreamt-up by 'Scientology' instigator, L. Ron Hubbard - a man who was once famously described as 'a combination of  Baron M√ľnchausen and Adolf Hitler.'

Unfortunately, just as with the followers and casual observers of Hubbard, the only information made available to the followers and casual observers of Rehnborg, has been carefully controlled.


Carl F. Rehnborg, circa 1915.
Rehnborg, Circa 1927.

Thus, to date, the world has been led to believe that Rehnborg (who was born in 1887 in St. Pitersberge, Florida) :- 

- was a noted-child-prodigy who read voraciously and who amazed his teachers with his detailed knowledge of: philosophy, religion, history, politics, astronomy, mathematics, aerodynamics, chemistry and human rights. 

- was  fluent in many languages, including Chinese. 

- was not a believer, but he studied Christianity, making a boyhood pilgrimage to Palestine and Egypt.

- had a great passion in his teen-age years - the study of planet Earth, its population, its food reserves, and the 'technology of conservation of natural products, but his first love was always the science of nutrition. 

 - was, by the tender age of 27, already a 'doctor of chemistry' who had moved to Tianjin in China to work as an accountant for an American Oil company.

- ran a shipbuilding company, before becoming the representative of the 'American Dairy Company' and, eventually, the representative of 'Colgate Products Company' in Shanghai.

 - witnessed ‘mass-starvation’ in China, before surviving a ‘siege of Shanghai’ by supplementing his diet (and that of his starving friends) with an improvised, vitamin and mineral-enriched broth made from grasses, vegetables, powdered limestone, ground-up bones and rusty nails, etc.

- sailed across the Pacific (studying its many island-cultures on the way) and landed on the West Coast of the USA, where, despite having no money, he managed to establish a 'research laboratory’ in his modest loft-apartment on California’s Balboa Island.


- selflessly dedicated 6 years of his life (1927-1934) to develop a ‘Revolutionary New Food Supplement’ to save mankind from starvation, assisted only by his dutiful young wife, Edith.

- first naively tried to give his wonderful new formula away, but the cynical world wasn’t interested, so, in 1934, he reluctantly decided to create ‘California Vitamins Inc.’ 

- moved his flourishing  ‘Business’ to a ‘Manufacturing and Processing Facility’ in Buena Park, California, and created the ‘Nutrilite Products Company Inc.’ in 1939. 

- acting in association with a ‘Network Sponsoring Company’, ‘Mytinger and Casselberry Inc.’ (to whom he’d sold ‘Exclusive Nutrilite Distribution Rights’) created the ‘World’s First Multi-Level Marketing Scheme’

- had lived the American dream, starting from nothing to become an admired and respected millionaire through ‘Helping 15 thousands fellow Americans to build their own MLM Businesses.’ 


Carl F. Rehnborg  circa 1939

Exactly like L.Ron Hubbard, scant quantifiable evidence has been produced to prove that Rehnborg was qualified (let alone expert) in anything, other than lying to vulnerable people to get their money. There is even reason to doubt that Rehnborg (who apparently did once work for 'Colgate & Co') was in China in the exact period he claimed during, and after, WWI; whilst all the other exciting episodes in his various occidental and oriental odysseys are largely anecdotal. However, the truth about Rehnborg’s convoluted ‘Rags to Riches’ American fairy story is an entirely different matter.





In 1934, Rehnborg (aged 48) legally-registered ‘California Vitamins Inc.’allegedly to manufacture and distribute what he arbitrarily defined as 'the World’s First Multi-Mineral/Multivitamin Plant-Based Food Supplement - a Unique Combination of Vitamins and Minerals in a Special Base.’  At first, this so-called ‘Health Tonic’ was brewed up, and peddled as 'Vita-6'  a.k.a. 'Vitasol,' in insignificant quantities. Consequently, it was of no particular interest to regulators.





However, anyone with an ounce of common sense could immediately tell that Rehnborg’s ‘invention’ was just another essentially-inert potion (in the absurd tradition of the medicine show); a random mixture of cheaply-procured common substances with an expensive price tag. It had probably taken Rehnborg 6 hours to concoct, not 6 years.



Aerial View of Nutrilite Products Inc. Plant



By 1939, Rehnborg had spotted the existing term, 'Nutrilites' (probably in an old scientific magazine). So he legally-changed the name of his pay-to-play game of make-believe to the technical-sounding ‘Nutrilite Products Company Inc.’ and moved his quackery onto an almost unprecedented scale. Soon, Rehnborg was legally employing dozens of white-coated workers in purpose-built industrial buildings in Buena ParkCalifornia. He also acquired an alfalfa farm near to the city of Hemet in California's San Jacinto valley, but it is unclear exactly where he suddenly found all the necessary capital to pay for these impressive sites and their modern equipment. To his followers and casual observers, Rehnborg’s activity looked like any other lawful enterprise. His staff were ordinary honest folk, to whom the truth was also unthinkable.







At this time, Rehnborg rechristened his potion ‘Nutrilite Double X (‘XX’Supplement.’ He now proposed to offer it as two ‘complimentary products’ in one pack -  comprising little green bottles of bright red ‘Multivitamin Capsules’ and boxes of pale-coloured ‘Multi-Mineral Tblets.’ The product was deliberately designed to look modern and scientific (like a proprietary medicine), but, tellingly, the price was fixed at just less than $20 a box (the equivalent of several hundred dollars today). Rehnborg claimed that the ‘XX’ brand-name was derived from the Roman numeral representing twenty. It should have been read as ‘double cross;’ for when the former toothpaste salesman’s pricey wampum was routinely analysed by independent chemists working for the FDA, it was discovered that (although it contained essentially what it said on the labels and was quite harmless) ‘XX Supplement’ really did mostly comprise a random mixture of cheaply-procured, common substances in which vitamins and minerals naturally occur (dried vegetable extracts: alfalfa; parsley; watercress; yeast; etc.). FDA experts later estimated that XX Supplement’  cost no more than a few cents a pack to produce. Thus, FDA lawyers must have known that Rehnborg was, in fact, using authentic pharmaceutical equipment to mass-produce a precisely-measured, harmless placebo, but labelled as a ‘Health Tonic’ (a meaningless term), and peddling it at an exorbitant mark-up (certainly, more than 1000%). This crack-pot pseudo-scientific swindle, which was tantamount to a self-styled 'alchemist' stamping a valueless amalgam of base-metals, 'Pure Gold,and selling it for the price of pure gold, could have been quickly nipped in the bud, simply by charging Rehnborg with criminal fraud. Apparently, prosecutors never considered the possibility that they might be dealing with someone with severe psychological problems whose own inflexible delusions were contagious. Instead, at first, FDA lawyers felt obliged to take no action; reasoning that, by truthfully listing the banal ingredients, but avoiding making any specific therapeutic claims, on his packaging, Rehnborg had found a loophole in federal laws concerning criminal misbranding of medicines. As result, an up-dated version of an age-old fiction was permitted to be mass-marketed as fact to an unsuspecting public. Unfortunately, the lack of any rigorous, official challenge only brought its author more credibility. Not surprisingly, a host of copy-cat 'Unique Vitamin and Mineral Health-Tonic’ scams quickly sprang up.




As WWII drew to its close, ‘Nutrilite’ had lost its novelty, so Rehnborg (who was approaching 60) had teamed-up with two respectable-looking associates, Lee S. Mytinger and William S. Casselberry (later described by FDA officials as a ‘cemetery-plot salesman’ and a ‘psychologist’). The result was ‘Mytinger and Casselberry Inc.,’ a second corporate structure peddling ‘Exclusive Commission-Agency Rights’ to ‘Distribute XX Supplement’ using (what was first defined by the company’s owners as) a ‘New Business Model.’ In theory… you could try to sell ‘XX  Supplement’ to your social contacts for a small profit, but, if you wanted to make big money, you didn’t need to sell anything… you could buy a monthly quota of ‘XX Supplement’ yourself and sign-up your social contacts to do the same… your ‘Sponsored Recruits’ would then ‘Sponsor’ their own social contacts, etc., ‘compensation’ would automatically multiply in an infinitely-expanding geometric progression

‘Mytinger and Casselberry Inc.’ offered a mind-numbing contract’ in which the ‘company’ undertook to pay its ‘Independent Distributors’ an escalating ‘monthly commission’ on the totality of their escalating ‘Business Volume’(i.e. their own regular monthly purchasesfalsely defined as sales’, added to the regular monthly purchases, falsely defined as ‘sales’, of their ‘Sponsored Recruits’, and those of the recruits of their recruits, etc. etc. ad infinitum).




In reality, the new set-up was merely the original mystifying lie with a second mystifying chapter added, but to casual observers ‘Nutrilite Products Company Inc.’ appeared to be exclusively manufacturing for, and wholesaling ‘XX Supplement’ to, ‘Mytinger and Casselberry Inc.,’ whose commission agents, in turn, appeared to be retailing it to the public for a profit. Although ‘XX Supplement’ was presented as ‘Unique,’ it mostly comprised substances which could easily be bought at a fraction of their exorbitant, assembled fixed-price, in traditional retail outlets. The product was effectively-impossible to sell to the general public for a profit on the open market. Therefore, the overwhelming majority of its final customers were merely the non-salaried agents of the second corporate structure, which itself was the sole agent of the first corporate structure. In order for them to maintain the false hope that if they signed-up further contributing participants they would automatically become rich, the participants in this dissimulated money circulation game were obliged by its rules to keep handing-over a monthly payment to Mytinger and Casselberry, to be shared with Rehnborg. From all rational points of view (medical, economic, legal, etc.), ‘XX Supplement’ might have well not existed; for it was just a convenient means of laundering illegal payments in a closed-market swindle, or pyramid scheme,  based on the crack-pot, non-rational theory thatendless-chain recruitment + endless payments by the recruits = endless profits for the recruits. New victims were supplied with a $49.50 ‘Business Kit’ (i.e. a large cardboard box stuffed with a month’s supply of ‘XX Supplement’ and a fat folder containing page after page of mind-numbing pseudo-economic/medical presentations and diagrams, and instructions in how to go about remembering, contacting and recruiting everyone they’d ever known during their lives). These presentations contained the concrete evidence which FDA lawyers could use to prosecute Rehnborg, Mytinger and Casselberry. Contributing participants were being instructed to smile, project excitement and enthusiasm, and to recite a precisely-worded script which proclaimed ‘Nutrilite XX Supplement’ to be ‘good value,’ because it could ‘cure or prevent,’ virtually any known human illness.


William W. Goodrich
William W. Goodrich

http://www.fda.gov/downloads/AboutFDA/WhatWeDo/History/OralHistories/SelectedOralHistoryTranscripts/UCM372999.pdf (see interview pages from 107)

http://law.justia.com/cases/federal/district-courts/FSupp/87/650/2011431/

Even though it wasn’t his area of responsibility, FDA Legal Counsel (1939-1971), William W. Goodrich, was probably the first senior US law enforcement agent to deduce that the innocent baby that Rehnborg, Mytinger and Casselberry had baptised a ‘New Business Model’ (later to become known as: ‘Multi-Level Marketing’) was actually the same old delinquent previously known a 'pyramid scam.’ Again, anyone with an ounce of common-sense could work out immediately that, since Rehnborg had been peddling medical alchemythe strong likelihood was that Mytinger and Casselberry were peddling economic alchemy. The sinister trio of quacks were obviously acting in association, but agents of the Food and Drug Administration and those of the Federal Trade Commission acted independently. At this time, anti-racketeering legislation did not yet exist in the USA. However, in the late 1940s, the rapidly-expanding ‘XX Supplement’ dossier was already in the hands of FTC lawyers. Apparently, prosecutors still never considered the possibility that they might be dealing with persons suffering from severe psychological problems and whose own inflexible delusions were contagious. Instead, they still felt obliged to take no action; this time reasoning that Mytinger and Casselberry appeared to have found a loophole in federal law prohibiting fraud. For even today, the fundamental identifying characteristic of all pyramid scams and Ponzi schemes, has not yet been accurately defined by legislators. As a result, another updated version of an age-old fiction was permitted to be mass-marketed as fact to an unsuspecting publicYet again, the lack of any rigorous official challenge only brought its authors more credibility. Not surprisingly, a host of copy-cat 'income opportunity' swindles (camouflaged by banal, but pricey, wampum) quickly sprang up.


By 1947, Rehnborg, Mytinger and Casselberry were steadfastly pretending  ‘15 000 Successful Distributorships in the USA,’ with ‘sales’ totalling ‘$500 000 dollars per month.’ They had also organised the production of a ‘Free’ booklet, ‘How to Get Well and Stay Well’, in which they further pretended that ‘Nutrilite Double X Supplement’ had ‘cured or greatly helped such common ailments’ as : ‘Low blood pressure, Ulcers, Mental depression, Pyorrhoea, Muscular twitching, rickets, Worry over small things, Tonsillitis, Hay Fever, Sensitivity to noise, Underweight, Easily tired, Gas in stomach, Cuts heal slowly, Faulty vision, Headache, Constipation, Anaemia Boils, Flabby tissues, Hysterical tendency, Eczema, Overweight, Faulty memory, Lack of ambition, Certain Bone conditions, Nervousness, Nosebleed, Insomnia, Allergies, Asthma, Restlessness, Bad skin colour, Poor appetite, Biliousness, Neuritis, Night blindness, Migraine, High blood pressure, Sinus trouble, Lack of concentration, Dental caries, Irregular heartbeat, Colitis, Craving for sour foods, Arthritis, Rheumatism, Neuralgia, Deafness, Subject to colds.’



Carl.F. Rehnborg circa 1947

Rhenborg now cast himself in the role of ‘Scientific Adviser’ to ‘Mytinger and Casselberry Inc.’ He toured the USA preaching the gospel to wide-eyed ‘Distributors’ - ‘for less than $20 a month’‘Nutrilite Double X Supplement’ was the ‘Answer to Man’s Search for Health.’ After both companies’ owners were approached by FDA officials and warned that they could face criminal prosecution for misbranding, the booklet was ‘revised.’ Specific therapeutic claims were supposed to be eliminated. ‘All illnesses’ suddenly became a ‘state of nonhealth’ produced by ‘chemical imbalance’.… ‘Nutrilite XX Supplement’ cured nothing, it merely ‘enabled people to Get Well and stay Well’ by themselves. However, pages 41-52 of the booklet still recounted alleged case-histories explaining that ‘Nutrilite brought relief from such ailments as diabetes, feeble mindedness, stomach pains, sneezing and weeping.’ Not surprisingly, the FDA officials were not impressed, so they finally launched a number of raids, and seizures of ‘Nutrilite XX Supplement’ and associated publications.





In 1951, after a series of lawsuits, appeals and counter suits (in which Mytinger and Casselberry hired top lawyers who portrayed their clients as American capitalist heroes being crushed by Soviet-style bureaucracy), the FDA obtained (on behalf of the people) a permanent Supreme Court injunction against ‘Mytinger and Casselberry Inc.’ preventing Distributors’ from referring to 50 publications making false claims about ‘Health Tonics and Food Supplements’ (including various ‘Revised Editions’ of ‘How to Get Well and Stay Well). FDA agents soon found that the injunction was being flouted. As a result of mounting complaints, they infiltrated the organization (as potential recruits) and recorded deluded proselytisers chanting the same cure-all mantra about ‘XX Supplement.’ Faced with more litigation and fearing that their monopoly of information might be lost, in 1954, Rehnborg, Mytinger and Casselberry hired a leading advertising agency which handled the clean-cut, but fading, Hollywood star, Alan Ladd. Along with his wife and children, Alan Ladd then briefly-featured in a kitsch 'Nutrilite' advertising campaign - published in various mainstream magazines right up until 1959.  




Alan Ladd (who secretly suffered from chronic depression and who had problems with alcohol and narcotics) was, however, soon to be air-brushed out of the 'Nutrilite' fairy story.



 

The charlatan-trio, 'Mytinger, Casselberry and Rehnborg,' also paid a team of Hollywood professionals to produce a 20 minute colour propaganda film, From the Ground up’ (featuring themselves as three nice ordinary American guys turned philanthropic scientists and industrialists), and they began to publish their own propaganda magazine, ‘Nutrilite News'’ (stuffed with colour photos of happy, healthy and wealthy ‘Distributors')


Amway Co-Founders Rich DeVos and Jay Van Andel (bottom row, second and third from the right, respectively) and their group of senior key agents pose with Nutrilite Founder Carl F. Rehnborg and his wife Edith Rehnborg, in front of their tour bus, 1956.
Richard DeVos and Jay Van Andel (2nd and 3rd from the right, front row), Carl F. Rehnborg (immediately behind Van Andel, second row), circa 1950.

Soon, the 'Nutrilite' show was touring the USA on a motor coach (like a 'Tent Revivalist' group).  Mytinger, Casselberry and Rehnborg had begun organizing pay-to-enter ‘Rallies and Seminars'’ (addressed by allegedly ‘Successful Christian Distributors’ like Rich De Vos and Jay Van Andel). No quantifiable evidence (in the form of audited accounts) was ever produced to prove what percentage of claimed ‘sales'’ were authentic retail transactions to the general public for a profit (based on value and demand), or how many people who’d signed a contract'’ with ‘Mytinger and Casselberry Inc.'’ had actually received an overall net-profit from the operation of what its instigators arbitrarily defined as an MLM income opportunity’. Excluding the tiny percentage of grinning shills at the top of the pyramid, the hidden, rolling insolvency/churn-rate was 100%. Since there was no significant or sustainable external revenue, participants were actually buying infinite shares in their own finite money. 


 Richard DeVos                                                    Jay Van Andel

Circa 1950
circa 1965

In 1959, when it seemed that ‘Mytinger and Casselberry/Nutrilite Products Inc.’ might finally be shut down (under the ‘Federal Food, Drug and Cosmetic Act 3381-3383’, rather than anti-fraud legislation) De Vos and Van Andel hid behind familiar, patriotic words and images stolen from contemporary popular culture. They created the ‘American Way Association’ - the first of what was to become a shoal of red, white and blue herrings.

Previously, the two up-and-coming charlatans, Mytinger and Casselberry, gravitated towards the established (but ageing) Rehnborg, and vice versa. Rehnborg seems to have reflected the pair's own narcissistic delusions as reality and behaved as though they were important businessmen/psychologists, whilst the pair treated him as though he really was an important and respected scientist/ philanthropic businessman. This was the point at which'Nutrilite Inc.' (a legally-registered, and industrialized, pseudo-scientific swindle), began to transform into a highly-organized, self-perpetuating, blame-the-victim 'Prosperity Gospel' cultic racket - tailor-made to fit the existing beliefs and instinctual desires of a broad range of people - peddling a perversion of the 'American Dream' whilst giving victims the illusion that they were making free choices. 

Evidently, US law enforcement agents never fully-understood that Rehnborg, Mytinger, Casselberry, DeVos, Van Andel and their close-associates, were dangerous manipulators who magnified each others' narcissistic delusions. The longer they went unchallenged: the more adherents they ensnared and the more-capital they acquired. The more capital they acquired: the easier it became to deceive more adherents and the more severe, and inflexible, their own delusions became. Sadly, and exactly like L. Ron Hubbard, the more convinced of their importance Rehnborg, Mytinger, Casselberry, DeVos and Van Andel became: the more convincing they became.


On September 6th 1949 (along with Michael Pacetti), two, clean-cut, hitherto-unremarkable USAAF veterans of Dutch Protestant origin, Richard DeVos (aged 23) and Jay Van Andel (aged 25), registered the ‘Ja-Ri Corporation.’ However, throughout the 1950s, this (apparently independent) company was the agent of both Nutrilite Products Company Inc.' and of  'Mytinger and Casselberry Inc.'

The two Pentacostalists, DeVos and Van Andel spent ten years perfecting their own sanctimonious 'MLM' act, before finally setting up a copy-cat 'income opportunity' racket.

 'Amway' frst operated as an affinity fraud targetting the flag-waving adherents of Evangelical Churches in the Bible Belt. Most early 'Amway' adherents were already trained to defer systematically to the moral and intellectual authority of their pastors - so De Vos and Van Andel simply dressed up, and behaved, exactly likerespectable Church pastors. They taught their male followers to duplicate their clean-cut example. Thus, alcohol, cigarettes and even beards were forbidden. Amway men had to wear a suit and tie, whilst Amwaywomen were forbidden to wear pants or anything too sexy. Indeed, until relatively recently, 'Amway Network Leaders' were commonly referred to as 'Black Hats.'


The classic movie, 'Elmer Gantry' (released in 1960), was written and directed by Richard Brooks and is loosely-based on a novel of 1927 by the Nobel prize-winning author, Sinclair LewisIn the Movie, 'Gantry' (played by Burt Lancaster) is a grinning charlatan in a loud suit - a hard-drinking whore-chasing travelling-salesman, who, for sexual and financial motives, attaches himself to the beautiful 'Sister Sharon' (played by Jean Simmons), the focus of a profitable 'Tent Revivalist' group working the Bible-Belt during Prohibition (1920-1933). 'Elmer Gantry' keeps his grin, but he dons a sombre suit and black hat, and is reborn as 'Brother Gantry' 'Charismatic Preacher' and 'Moral Crusader'. He soon discovers that he has the power to create mass-hysteria, and reap tens of thousands of dollars, by manipulating individuals' existing beliefs and instinctual desires. At a key-moment in the movie, a Protestant Minister (bedazzled by 'Brother Gantry's' offer to fill his church coffers) abandons the traditional Christian message and proclaims: 'Business is business, that's the American Way'.


Perhaps it's just a coincidence, but at almost exactly the time that the
 American Way Association' 
first appeared, ‘Elmer Gantry' was playing to packed movie-theatres all over America.




Initially (and with an irony that is close to exquisite), in order to dodge being drawn into the ongoing FDA investigation of 'Nutrilite,' De Vos and Van Andel got rid of the pills and potions and now laundered all the unlawful investment payments into their copy-cat, dissimulated, closed-market swindle, behind the claim that they were selling a laundry detergent  (i.e. banal, but effectively-unsaleable, non-'medicinal' pseudo-scientific wampum of their own fabrication). Again, the updated snake oil stain remover was deliberately designed to look modern and scientific, whilst De Vos and Van Andel grinned from ear as they too steadfastly pretended that these strangely-familiar, cheaply-procured mixtures of common substances, were all-American, exclusive, good-value and unique.



  


The original 'Nutrilite' lie was progressively-absorbed back into the spin-off 'Amway' (aka 'Quixtar') lie, 1972-1994, where it still is peddled as the truth.

Only after the 'MLM' virus had spread to almost every State of the Union, did the US Federal Trade Commission finally make a half-hearted attempt to close-down 'Amway.' After receiving a significant number of complaints,  FTC prosecutors, advised by specialist economists, recognised that what they were faced with, was not a direct selling scheme, but as a classic pyramid scam, without a significant or sustainable source of revenue other than its own victims, but hidden behind a smokescreen of products. However, after years of investigations and hearings, in 1979, a naive, and/or corrupt, federal judge ruled that although 'Amway' had previously been massively in breach of the law and would have to pay fines, the company would be allowed to continue to trade. This was because the judge accepted the latest unbelievable chapter of the 'MLM' fairy story. i.e. That 'Amway' s owners were respectable Christian businessmen who were vehemently opposed to  pyramid schemes and that, consequently, they had stopped fixing prices and introduced their own rules which would, henceforth, oblige the members of 'Amway's' sales force to sell at least 70% (by value) of the products which they had bought wholesale from the company, to at least 10 customers, before they could receive commission paymentsAmazingly, no independent, common-sense mechanism was created to ensure that this latest twist in the fairy story was true, and that 'Amway' would now be in compliance with the law.

Not surprisingly, this tragicomic judgement was seen as an open-invitation to thieve, and, consequently, a whole host of 'Amway' copy-cat 'MLM' rackets soon began to appear.   
More than 30 years later, the so-called 'Direct Selling Association,' is a demonstrable lie financed and controlled by the bosses of a classic, organized crime syndicate.


David Brear (copyright 2016)

Monday, 9 May 2016

The 'Direct Selling Association (DSA)' is a big lie.

I have been asked to re-post this article from 2013.




Today in the USA and elsewhere, due to many factors (not least supermarkets, discount stores and the Internet) virtually no one buys consumer goods on the door-step.




Historically, door-to-door selling (or what used to be known as peddling) was a very common way of doing business in the USA, but at the start of the 20th century, its image was blighted by fly-by-night quacks and charlatans. In an age when most women did not go to work, and even the middle-class had servants to cook, clean and receive visitors, door-step products were invariably cheap and cheerful, and aimed at ordinary housewives. 






From just before WWI until the 1960s, the 'Direct Selling Association' was a national trade association in the USA that represented (and was only financed by) a number of generally-reputable commercial companies of various sizes. These used to generate profits by regularly selling everyday goods (usually perfumes, cosmetics, costume jewellery, household products, books, etc.) directly to the general public through salaried, and/or non-salaried, commission agents. Although unethical, high-pressure sales tactics were increasingly used by new, and less reputable, DSA members, in their traditional format, direct retail transactions were authentic and lawful, because they were mostly-based on value and demand. Furthermore, the DSA members originally tried to keep fly-by-night quacks and charlatans at bay, and, at one time, they agreed that, like political constituencies, commission agencies for any particular company, should be limited in given geographical/population areas. This prevented counter-productive internal disputes amongst the sales-force and enabled individual sellers to have a fair chance of finding sufficient loyal customers to make a decent living. 





Today, when examined in splendid isolation by casual observers, the self-proclaimed activities of the corporate structures still known as 'Direct Selling Associations' can appear to be the same as above, and entirely lawful. However, when the wider-evidence is rigorously examined, during the second half of the 20th century (as door-to-door selling gradually died out in the USA and elsewhere) the membership of 'DSAs' came largely to comprise an ever-growing number of so-called 'Multi-Level Marketing' companies ('Amway', 'Herbalife', 'Nu Skin', 'Forever Living Products', etc.) which have been used to dissimulate vast closed-market swindles or pyramid schemes. The manipulative criminals behind these legally-registered counterfeit commercial companies, have acquired their wealth by steadfastly pretending moral and intellectual authority, whilst deceiving an endless-chain of victims (now comprising many millions of individuals around the globe) into making regular losing-investment payments in exchange for effectively-unsaleable wampum (i.e. banal, but grossly-overpriced products, often of a dubious pseudo-scientific nature with highly-exaggerated, and/or miraculous, claimed benefits which cannot be quantified). These unlawful transactions, already totalling many billions of stolen dollars, because they were actually based on the false-expectation of future reward, have been laundered as lawful retail sales based only on value and demand. 

The outrageous 'MLM direct selling' lie, has been hiding in plain sight for so long: that many people now not only accept it as the truth, but they will laugh out loud at rational persons suggesting that, in reality, so-called 'MLM recruiters' are adherents of the crackpot, but nonetheless economically-suicidal fairy story that  endless recruitment + endless payments by the recruits = endless profits for the recruits. 

It is, however, important for readers to distinguish between short-term and chronic, core-believers in the 'MLM income opportunity' myth. The overwhelming majority of people who have been taken-in by 'MLM,' quit within a short time, usually because they find it impossible to convert, and/or maintain, other contributing recruits, and/or they have no cash, or credit, to continue contributing themselves. Since they were invariably recruited by a friend or relative, they have little reason to complain, and they wouldn't know exactly what to say, or where to complain, anyway. 

The hidden annual roll-over rate in groups like 'Amway', 'Herbalife', etc., has always been well in excess of 50% and lately, around 90%. Those who have persisted for more than 3 years, is certainly no more than 5%. However, if you ignore the insignificant number of charismatic, grinning shills at the top of the pyramids, the overall hidden churn/loss rate in so-called  'MLM income opportunities,' has always been effectively 100%. Thus, the constant public-proclamations by the leaders of the largest, long-established groups like 'Amway'  that their sales-force has always been expanding for decades and lately comprise 'millions of Independent Business Owners,' is a grotesque, criminal distortion of ever-shifting reality. 




There has been a significant minority of chronic 'MLM' proselytizers, with access to cash or credit, who continue as de facto slaves to the lie, sometimes for more than 10 years. In many cases, these dangerously-deluded, self-righteous persons will do, or say, anything to sign-up, and/or maintain, recruits - convinced that they will only achieve total financial freedom by helping others to achieve it. They are indoctrinated to ignore their mounting losses/debts and to commit everything they can get their hands on. Some even steal from their friends and families, and/or deprive themselves, and/or their families, of food, heating, etc. In the very worst cases, gung-ho 'MLM' adherents known as 'Road Warriors' have been indoctrinated to go without sleep and have ended up dead at the wheels of their cars - crashing whilst en route to late-night recruitment meetings. Fanatical 'MLM' addicts have generally been compared to chronic gamblers, but I have called them 'financial anorexics.'  When finally such persons have confronted external reality, they have have exhibited chronic psychological deterioration symptoms.

Once the relatively-simple, underlying modus operandi of blame-the-victim 'MLM income opportunity' fraud is clearly understood, the tightly-scripted, reality-inverting activities of the 'DSAs' form part of an overall pattern of ongoing, major racketeering activity (as defined by the US federal Racketeer Influenced and Corrupt Organizations Act 1970). Tellingly, the 'DSAs' (which pose as rigorous and ethical self-regulators vehemently opposed to pyramid schemes), have long-since ceased to set, let alone enforce, any common-sense limit on the numbers of commission agencies being created by members.





http://www.youtube.com/watch?v=hh6z1hP4H0o

The corporate officers of the American 'DSA,' like Joe Mariano (whose salaries have been paid with stolen money), are, in fact, committing wire fraud and attempting to obstruct justice when they make the following, demonstrably false, and/or selective, and/or essentially meaningless, statements on their own Website; for even their use of the term, 'Direct Selling,' is a monstrous hoax:

'Washington, D.C. (Jan. 29, 2013) - Following the Jan. 28 announcement that an enforcement action against Fortune Hi-Tech Marketing (FHTM) is being initiated by the Federal Trade Commission (FTC) and several attorneys general for allegedly operating a pyramid scheme, the Direct Selling Association (DSA) has received numerous inquiries regarding whether FHTM is a member of the Association. "FHTM is not a member of DSA,” confirmed President Joe Mariano. Additionally, he stated that “the Association’s membership application process is rigorous, and is designed to ensure that only legitimate direct selling companies become members of the direct selling industry's trade association."
FHTM had applied for DSA membership, but withdrew its application in 2011. A rigorous review of each applicant’s marketing and compensation plan is conducted to ensure compliance with DSA’s self-regulatory Code of Ethics. DSA works with applicant companies to address any deficiencies in policies and procedures prior to recommending to the Board of Directors that the company be approved for full membership. Mr. Mariano explained that "the membership review process serves to identify pyramid schemes that are masquerading as legitimate direct selling companies." Mr. Mariano also stated "that well over half of the companies that apply for membership in the Association withdraw their applications for a variety of reasons including failure to come into full compliance with the requirements of the DSA Code of Ethics," thus making the company ineligible for membership. Pyramid schemes and other fraudulent scams are ineligible for DSA membership.
While DSA cannot comment on the specific allegations regarding FHTM, Mr. Mariano commended the FTC and state attorneys general "for their comprehensive, ongoing efforts to identify and prosecute illegal and fraudulent pyramid schemes, an approach that is consistent with concerns raised by DSA through its membership application process and its long-established self-regulatory efforts....."

.... The Direct Selling Association is a 102-year-old national trade association that represents companies who distribute products to customers through or with the assistance of independent salespersons who personally demonstrate and explain those products to the consumer, usually in the home or work place. Direct sellers are perhaps best known to the public as person-to-person, door-to-door, or home party plan sellers. Through the efforts of direct salespersons that provide personal demonstration, home delivery, and a variety of other sales-related services, direct-selling companies can offer quality products to consumers without substantial advertising or other barriers to entry found in other distribution systems, like brick-and-mortar stores. In 2011 there were approximately 15.6 million direct sellers in the U.S. with retail sales of nearly $30 billion.'


http://www.dsa.org/press/press_releases/?fa=view&docID=5448

If readers just stop and think for a moment, then this is obviously a fairy story; for the above document conveniently ignores the key-fact that another so-called 'Direct Selling' company, 'YourTravel Biz.com (YTB),' was a 'DSA' member that had just been 'approved as legal and ethical' only months before being successfully-prosecuted as a 'massive pyramid scheme' and shut down by the California Attorney General. In this particular case, it was found that 340,000 persons had been deceived by 'YTB' including a significant number who had bought effectively-valueless shares in it. 

Furthermore, if there really were 15.6 millions direct sellers in the USA in 2011, then how many of them remained in 2012 and where are all their customers? Readers will note that nowhere in any material published by any so-called  'DSA' anywhere in the world, is to be found a common-sense, accurate and unambiguous definition of what used to be considered a lawful direct selling company. 

i.e. a corporate structure which can prove that its revenue has largely-derived from the regular selling of significant quantities of products, and/or services, directly to the general public via commission agents: rather than from purchases made by a never-ending chain of its own losing, commission agents. 

Tellingly, in all material published by so-called 'DSAs,' instead of  'the general public,' we always find the vague, and ambiguous, terms: 'customers' and 'consumers' which obviously can be (and are) taken to mean absolutely anyone, including the commission agents themselves. Indeed, the so-called 'DSA's' own so-called 'Codes of Ethics' specifically allow so-called 'self-consumption by Direct Sellers' to 'qualify' as so-called 'Sales.'

Thus, heading the list of common-sense questions which should long-since have been put to the officers of the so-called 'Direct Selling Association' in the USA, is:

'Of your members' claimed '$ multi-billion retail sales,' exactly what percentage have been authentic, external, retail sales to the general public rather than internal transactions between your members and the millions of so-called 'direct sellers' themselves, arbitrarily, and falsely, defined as 'retail sales?'

Obviously, the officers of the so-called 'DSA' have painted themselves into the same absurd corner as the bosses of 'Herbalife', and their standard escape will be first to smile-sweetly, and steadfastly pretend that they can't be expected to have a ready answer to the above question, when the direct selling companies themselves don't monitor, or publish, this information. However, if put under pressure, they will then be obliged to claim that the questioner doesn't understand how direct selling functions, because many of the millions of persons who have always been described as 'direct sellers in the USA,' weren't actually 'direct sellers' at all, they were 'discount customers.'




Thus, I will confidently predict that, when challenged, the branch of the 'MLM' Ministry of Truth known as the 'Direct Selling Association' will cease to put forward the limp defence of ignorance. Instead, they will mount exactly the same arrogant, Orwellian offensive as the bosses of 'Herbalife (HLF).' 

In effect, they will say:  

Read the word 'seller' as 'buyer,' stupid! Then fraud  is lawful.'



David Brear (copyright 2016)