Saturday, 16 February 2013

'Fortune Hi-Tech Marketing' is a pernicious lie, and Paul Orberson and Tom Mills were its authors..

Sanctimonious 'MLM income opportunity' racketeer, Paul Orberson.
Paul Orberson's sanctimonious side-kick, Tom Mills.


Last month the US Federal Trade Commission and 3 state Attorney Generals triumphantly announced that they are finally doing their job. i.e. In defence of their employers (tax-payers), they have shut-down 'Fortune Hi-Tech Marketing Inc.,' a so-called 'national Multi-Level Marketing company,' which (after 12 long years without rigorous challenge to its authenticity or clear warning to the public) they now prefer to describe as a 'global pyramid scheme.'

http://factsaboutherbalife.com/wp-content/uploads/2013/01/fhtm-complaint.pdf
http://fr.scribd.com/doc/126723874/FHTM-Receiver-Report1-shows-owners-milked-company




Indeed, the FTC has even found it necessary to set up a 'hot line' to answer questions from distressed 'FHTM' adherents: (001) 202-326-2643. Classically, significant numbers of these formerly arrogant and self-righteous persons continue to cling to the ego-building fantasy that 'MLM' is a perfectly lawful, and highly-regulated, form of business and that they were 'Independent Business Owners following a proven, step-by-step, plan to achieve total financial freedom.'




In the adult world of quantifiable reality, the US federal authorities have called a halt to the version of the pernicious 'MLM' game of make-believe known as 'FHTM,' and an estimated 160 thousands deluded players are no longer allowed to act as de facto slaves for its handful of instigators. However, the remnants of the same mind-bending criminal enterprise is apparently still being allowed to operate in Canada, and elsewhere (including the UK), right under the noses of regulators and prosecutors.

http://www.nypost.com/p/news/business/bad_fortune_for_herbalife_yEKK1coternt7dkOMCCgAK

Predictably, the day of the FTC's 'FHTM' announcement, the market-price of effectively-valueless 'Herbalife' shares, slumped a further 8%, and it can now only be a matter of time before the federal authorities close 'Herbalife.' 

http://www.sequenceinc.com/fraudfiles/wp-content/uploads/2013/01/simon-davies-linkedin-herbalife-fhtm.pdf

Laughably, the person described as current 'Chief Analytics Officer' and former 'Chief Financial Officer' of 'Fortune Hi-Tech Marketing Inc. (FHTM)' is none other than Simon Davies, the former 'Internal Audit Director' of 'Herbalife Ltd. (HLF),' 1994-2006.


A whole flock of grinning 'FHTM' racketeers

The counterfeit corporate structures known as 'Fortune Hi-Tech Marketing,' (based in Lexington, Kentucky),  'Alan Clark Holdings LLC', 'FHTM Canada Inc.', and  'Fortune Network Marketing (UK) Limited', along with their sanctimonious bosses, Paul C. Orberson and side-kick, Thomas A. Mills, are being sued by the FTC (on behalf of the people), and by the Attorney Generals of Kentucky, North Carolina and Illinois (again on behalf of the people) for 'unfair and deceptive actions' which 'violate state and federal laws,' including 'misrepresenting' that the so-called 'FHTM MLM income opportunity' is 'a good way for average people to make substantial income and achieve financial independence.' 






Classically, the quantifiable evidence proves beyond all reasonable doubt that the so-called 'FHTM MLM income opportunity' has been effectively a means of committing financial suicide, but maliciously designed to silence its victims by indoctrinating them into the guilt-producing closed-logic belief that  only completely-positive, highly-motivated, hard-working persons who defer to the authority of their completely-positive, highly-motivated, hard-working leadership and who believe totally that they will achieve success: achieve success and that consequently, all persons who fail to achieve success in FHTM are a bunch of negative, worthless losers who only have themselves to blame. 

Prior to the case coming to trial, the Lexington HQ and warehouse of 'FHTM' have been raided and their contents seized by a receiver, Robb Evans (appointed by the U.S. District Court for the Northern District of Illinois). The counterfeit company's assets have been frozen and most 'FHTM' employees no longer have a job.


The Attorney General of Kentucky, Jack Conway
However, Kentucky Attorney General, Jack Conway, demonstrated a somewhat naive ignorance of the global, cultic phenomenon of blame-the-victim 'MLM Income Opportunity' racketeering, when (apparently in all seriousness) he stated that:
'Today's actions are the beginning of the end for one of the most prolific pyramid schemes operating in North America.' 
In reality, the corporate-front known as 'Fortune Hi-Tech Marketing' forms part an overall pattern of ongoing, major racketeering activity (as defined by the US Federal Racketeer Influenced and Corrupt Organizations Act, 1970).  Sadly, US prosecutors don't yet seem to have grasped that 'FHTM'  is only a relatively small criminal enterprise in comparison with 'Amway', 'Herbalife', 'Nu Skin', 'Forever Living Products', etc., from which its grotesque modus operandi was copied.

In simple terms, since the instigation of the original 'MLM' racket, in the 1940s, the only real money flowing into all subsequent so-called 'MLM income opportunities,' has come from the victims of inter-related-frauds.

Fraud 1. is what is popularly-called a pyramid scheme, but which I prefer to describe, in more-accurate terms, as a dissimulated closed-market swindle - this type of crime is based on planting the self-perpetuating, pernicious belief that never-ending recruitment + never-ending payments by the recruits = never-ending profits for the recruitsThe bosses of numerous 'MLM' gangs have not only lied to, but they have also withheld key-information from their victims and from regulators about the real source of their revenue. In this way, they have laundered many billions of dollars of illegal investment payments (made on the false expectation of future reward) into their dissimulated closed-market swindles, by arbitrarily and falsely defining these payments as 'lawful salesbased on value and demand.


Fraud 2. is a form of advance fee fraud in which many billions of dollars of effectively-valueless materials have been peddled to the constantly-churning victims of fraud 1. on the pretext that these are 'business-building/training/motivation tools' which 'contain valuable secrets vital to achieving success.' In reality, it is through these fraudulent materials (usually comprising publications, recordings, tickets to meetings) that a never-ending chain of victims of fraud 1. have been indoctrinated to believe that failure to make money in 'MLM' must have been entirely their own fault.


David Brear (copyright 2013)


Friday, 8 February 2013

'Forever Living Products (FLP)' is an 'Amway' copy-cat 'MLM Income Opportunity' cultic racket.


Due to the large number of people wanting to contact the author of this Blog off-line, rather than leave comments, here is an e-mail address for that purpose:

axiombooks@wanadoo.fr


e-mails should be marked:  'For the  attention of David Brear'

________________________________________________

Stop Press July 12th 2016

http://mlmtheamericandreammadenightmare.blogspot.fr/2016/07/the-flp-cultic-racket-has-now-been.html

________________________________________________________________________


Readers are also directed to this fully-deconstructed analysis of 'Forever Living Products (FLP)' as a pernicious, or criminogenic, cult (Secte) - i.e. a self-perpetuating, non-rational ritual belief system instigated for the clandestine purpose of human exploitation.

http://mlmtheamericandreammadenightmare.blogspot.fr/2015/06/forever-living-products-flp-cult-secte.html


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In 1945, whilst most, contemporary mainstream commentators were unable to look beyond the ends of their noses, with a perfect sense of irony, Eric Arthur Blair a.k.a. George Orwell (1903-1950) presented fact as fiction in an insightful 'fairy story' entitled, 'Animal Farm.' He revealed that totalitarianism is merely the oppressors' fiction mistaken for fact by the oppressed.




In the same universal allegory, Orwell described how, at a time of vulnerability, almost any people's dream of a future, secure, Utopian existence can be hung over the entrance to a totalitarian deception. Indeed, the words that are always banished by totalitarian deceivers are, 'totalitarian' and 'deception.'




Sadly, when it comes to examining the same enduring phenomenon, albeit with an ephemeral 'Capitalist' label, most contemporary, mainstream commentators have again been unable to look further than the ends of their noses. However, if they followed Orwell's example, and did some serious thinking, this is the reality-inverting nightmare they would find.







More than half a century of quantifiable evidence, proves beyond all reasonable doubt that what has become popularly known as 'Multi-Level Marketing' is nothing more than an absurd, cultic, economic pseudo-science, and that the impressive-sounding made-up term 'MLM,' is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organized crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim closed-market swindles or pyramid scams (dressed up as 'legitimate direct selling income opportunites'), and related advance-fee frauds (dressed up as 'legitimate training and motivation, self-betterment, programs, recruitment leads, lead generation systems,' etc.).

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Stop Press

'Forever Living Products (FLP)' - Craig Morgan blows the whistle.


Craig Morgan (b. 1963)





Craig Morgan contacted me in December 2015. He is British by birth and a builder by trade. He's also a down-to-Earth businessman and an atheist, but even he was deceived into pouring hundreds of thousands of pounds into the 'Mormon'-controlled 'MLM income opportunity' cultic racket known as 'Forever Living Products.'

So how on Earth did this happen?

Craig Morgan's ex-wife is Teresa Jones - a former hairdresser (from the village of Ashworth near Cheltenham): turned de facto 'FLP' slave. 

Craig Morgan remains very concerned for his ex-wife, but he also wants to put a stop to the 'FLP' racket.

I have to say, that in 20 years of investigating 'MLM' rackets, other than Eric Scheibeler, I have rarely come across an 'MLM' whistle blower of the calibre of Craig Morgan. He says that he is prepared to face absolutely anyone over this.

See original image
Teresa Jones (formerly known as Teresa Morgan-Jones)




NB. As a direct result of the publication of this article, all the above videos (which featured Theresa Jones reciting the 'MLM' fairy story) were suddenly pulled from the Intenet.

Teresa Jones is one of a significant core-group of 'FLP' adherents who has undergone  the classic radical 'MLM'personality transformation. For the last 9 years, she has been recklessly dissipating all her mental, physical and financial resources to the benefit of the multi-millionaire 'Mormon' bosses of the 'FLP' racket whom she has continued to trust, and follow, no matter what suffering this has entailed.

For 6 years (out of love and loyalty) Craig Morgan secretly subsidised his wife's financially-suicidal 'FLP'-related activities, falsely believing that he was investing in both their futures. During this entire period, Teresa kept her financial records hidden, and Craig only discovered the full truth about his wife's debts 4 years ago, when she dumped him (because he was so physically weakened ,and impoverished, that he was no longer of use) and the couple divorced. Lawyers, and a judge, then became involved, and Teresa's tragicomic accounts were finally declared. The judge commented that she wasn't really in business at all and that, consequently, her so-called'FLP business' was worthless. In the divorce Craig sought to recover £55 000 which he had inherited from his mother, but he discovered that Teresa was insolvent to the tune of hundreds of thousands of pounds. Although Craig was awarded £20 000, and access to his private belongings, in reality, (after legal fees) he's received virtually nothing from his divorce

It's taken Craig Morgan until today to feel strong enough to speak out publicly. Previously he had been falsely blamed for his ex-wife's debts and depicted by her as a violent and abusive liar and negative loser. Indeed, for a while, Craig was placed under such stress that he required psychiatric counselling and he also developed heart problems.

This is a brief transcript of Craig Morgan's testimony to me (Craig is dyslexic):

December 2010 my mother very unwell. 4 months she was in and out of hospital I was told she only had short time to live
Teresa never once came to see my mother, she had too much to do with her business
Whilst she was ill, my mum gave me and my brother £10000 eachI gave Teresa £5000 because I new she was having money problems because of FLP
The night my mum died, I had to drive Teresa and some of her team to the airport in the early hours of the morning for a Flp profit share rally. She had to go, she had to be there for her team
I had not slept for 3 days 
Forever was far more important than the death of my mother and my health
Yet after that when they returned from rally there were people within the business more intrested and sim pathetic 
At that time of loss and greath I was weak
In the following months I had to clear my house and put it on the market
July was at a forever training a member of the team rushed to hospital heart scare
In and out of doctors they said due to stress I was getting problems
When I was emptying property there was some forever People 
Asking if there is anything that you don't want
Being weak at the time kind and unwell 
I gave most of my mums things away
Now I no that they were telling people how well they were doing
But happy to have hand outs
Probably to sell to prop up there Flp dream
In November /December 
My X paid on my credit cards(at that time she had no credit rating because of her over spend)
So she bought car plan to get profit share
It cost thousands what bullshit
In December I handed over and I have records of this £50000
I said it was to pay the dept so it would make are life better 
Later I found out she paid around £10000 of it to take her mother brother and of course me on a cruse for here mums 80th birthday
She said here business paid for this more bullshit for the Flp facade 
Look how well I'm doing  
February Budapest for profit share ( I was very unwell)
At this time I've had to much bullshit wanted know more
When we were there she paid on my card a river cruse for her team 
And lots of other things were put on my credit cards
She told the team profit share is paying more bullshit
I walked across stage with here for profit share
It was less than £2500 grand
It cost more to buy it 
The death of my mother had paid for this bullshit
More lies to make Flp look GREAT 
Left the hotel I had a very very big room service bill
I had spent most of the time in bed 
Thank forever
On the flight back the flight team were great they could see how unwell I was
They were that concerned they said they would divert
I said no just get me home 
And on the flight a forever person was prospecting a trapped person in the seat by them (they are sick)
It took me two weeks to feel well
It was a Saturday took my wife out for lunch needed to talk to her
Back from profit share rally we had had more bullshit from forever team 
I wanted lunch a talk about the future 
Not been there 10 mins she started to prospect the waiter
I said no more I wanted to do something else was not going to give anymore to Flp
Will not say what she said I will leave that to you
3 weeks later mid Atlantic on the cruse (that the death of my mum paid for )
I was told she did not love me had not helped here in her. Flp life / business / bullshit 
She dumps me yet some other victim bleed dry by Flp 
A fun 16 months  
Death 
Bad health 
Sale of a family home 
Divorce 
And robbed 
It's the forever way 
And remember a friend in forever is a friend for life









A European journalist has asked me:

 "What do you know about Forever Living.... Is it a scam ?" '

This ties in with a frequently-asked question:

'Why do so few MLM victims complain?'

By chance, I have recently been in contact with a former friend of a young British man who (about a year ago), despite wearing the ego-inflating label 'Independent Business Owner,' was a de facto slave recruiter for the 'Multi-Level Marketing income opportunity' racket known as 'Forever Living Products (FLP).' Although he was subsequently obliged (partially) to come to his senses and quit (after running out of cash), for several months this guy suffered a frighteningly-familiar, radical personality transformation. Typically, he still does not accept that he was, in fact, the victim of an up-dated version of an age-old trap and, consequently (like the overwhelming majority of cult victims), he remains silent. 


Aloe Vera is a commercially-grown, hybrid species of succulent plant that probably originated in N. Africa - where closely-related wild aloes can still be found. These were reputedly used in ancient herbal medicine. Today, aloe vera (meaning extracts of the hybrid plant) is a cheaply-procured common substance widely-used in cosmetics and alternative/herbal medicine - marketed as having moisturizing, and/or rejuvenating, and/or healing, and/or soothing, properties. There is, however, little scientific evidence proving the effectiveness or safety of aloe vera for either cosmetic or medicinal purposes, and the available (largely-anecdotal) evidence has been widely-contradicted by wholly-independent studies. http://en.wikipedia.org/wiki/Aloe_vera


The 'FLP' adherent's former friend at first treated his whacky new behaviour as a huge joke, but she became increasingly concerned as he shut out of his life anyone refusing to support 'his new business.' 





The adherent changed his habitual way of speaking, dressing, eating and sleeping, and stuffed his home with exorbitantly-priced 'Forever Living Products' containing Aloe Vera (the regular purchase, and consumption, of which, he firmly-believed was going to fulfil his 'dreams and goals' and bring him unlimited health, wealth, happiness and freedom).



 

Whilst watching these typical 'FLP' propaganda videos featuring the tightly-scripted, unsubstantiated 'success/ miraculous cure' testimonies of deluded shills, bear in mind that the hidden overall loss/churn rate for so-called 'MLM income opportunities' has always been effectively 100%. In plain language, anyone claiming, and/or implying, that it is possible to make an overall net-income out of operating a so-called 'FLP Business,' is not telling the truth. The claim that '150 governments around the world have approved the FLP Business Model' is a classic piece of realty-inverting 'MLM' propaganda. 






In the above (astonishing) video, UK shill, Andy Waring, boasts that the 'FLP MLM income opportunity' has precious little to with selling, and is actually based on 'geometric progression.' In this way, Mr. Waring has been habitually committing fraud on behalf of his American masters; for this video demonstrates that 'FLP' adherents are taught that they can all receive constantly expanding profits forever, simply by exactly duplicating a 'proven plan' where they all obediently hand over their cash each month whilst attempting to recruit others exactly to duplicate the same 'plan.' Classically of an 'MLM income opportunity' racket, in 'FLP,' these unlawful losing investment payments (based on the false expectation of future reward) have been laundered as lawful sales ( based on value and demand), simply by giving victims pseudo-medical wampum (which has been arbitrarily given quasi-miraculous powers and an exorbitant fixed value, by the 'FLP' racketeers) in return for their cash. Self evidently, (from all rational points of view), this wampum might as well not exist, because its effects are unquantifiable and it has been effectively unsaleable on the open-market (i.e. to members of the general public with fully-functioning critical and evaluative faculties).

________________________________________________________________________




Currently, perhaps the most worrying aspect of 'FLP' activity in the UK, is the involvement of a significant number of former, and serving, police officers - one of whom, Emma Cooper, boasts of having been recruited whilst she and her husband, Shaun ( another former police officer), were in a highly vulnerable emotional state (after the murder of two colleagues).


Fiona Bone And Nicola Hughes
Unarmed WPCs, Nicola Hughes (aged 32) and Fiona Bone (aged 23), who were lured to a fake burglary and shot dead (Hattersly, Tameside, Greater Manchester), September 2012.

http://www.huffingtonpost.co.uk/2012/09/18/two-police-officers-shot-in-manchester-david-short-dale-cregan_n_1892773.html


Readers should note that Emma Cooper has subsequently left comments on this article in which she ordered me to remove all reference to her emotionally-vulnerable state at the time she was recruited into 'FLP.' According to Emma Cooper,  my description of her as boasting of being of being in a highly-vulnerable state (after the murder of two colleagues), is 'slanderous.'  However, I would suggest that the real reason why Emma Cooper doesn't want attention to be drawn to her gushing and tearful 'FLP' performance, lies elsewhere. Former colleagues of Emma Cooper have since contacted 'MLM The American Dream Made Nightmare' and informed me that she did not know, and had not even met either WPC Nicola Hughes or WPC Fiona Bone, and that she had absolutely no involvement in the investigation of their murder.





These same witnesses state that most of Emma Cooper's former colleagues (including an officer who was a close friend of one of the murdered officers), are now 'disgusted' by her attempt to exploit this tragedy in order to make money.





In a more recent video, Emma Cooper again breaks down at an 'FLP' event (this time staged in Singapore) and confesses that she has suffered from depression and anxiety attacks. 

________________________________________________________________________ 



//gallery.foreverliving.com/gallery/FLP/image/literature/10044_large.jpg



As part of a 'proven step-by-step business-building plan,' the adherent began to travel to regular pay-through-the nose-to-enter 'FLP' meetings and to buy many related-publications and recordings. All these materials constantly repeated the same message. They featured 'FLP Diamond' shills steadfastly pretending to be 'ordinary people who had quickly achieved extraordinary things ... simply by exactly duplicating the 'FLP business building plan' they had become 'financially free'... thus, anyone could begin recruiting ordinary people to duplicate exactly the same 'FLP business-building plan' and quickly 'achieve extraordinary things' themselves, etc. ad infinitum. 






As a result of all this typical 'income opportunity' brainwashing, the  adherent began to duplicate the 'plan' with religious devotion. Thus, he drew up an exhaustive list of everyone he had encountered in his life. Then, using a precisely-worded script, he progressively tried to convert his 'prospects' to 'FLP.'  His former-friend described all of the classic symptoms of an 'MLM' fanatic (principally, a complete incapacity to concentrate on external reality or to apply common-sense, or humour, to the absurd Utopian fairy story modifying, and controlling, his behaviour).



 


The peddling of so-called 'Leads' and 'Lead Generation Systems,' has also been present within the 'FLP' racket. Typically, adherents have been led to believe that the most successful 'FLP Distributors' have access to an exclusive secret knowledge which has enabled them to generate endless names of persons who are willing to join FLP, and that multi-millionaire 'FLP Leaders' are willing to share this miraculous Internet-based technology with anyone (for a price).




Martyn Lewis CBE (b. 1945)

Initially, when it was suggested to this would-be 'MLM millionaire' that 'FLP' is a pyramid scheme linked to the 'Mormon Church,' he immediately ridiculed his challenger and arrogantly directed her to an 'FLP' propaganda video featuring Martyn Lewis CBE. http://www.youtube.com/watch?v=w44SVykr3MI .


Miniature



Dr. Peter Atherton
Bob Parker
  

If readers watch the above staged-interview, which also features Dr. Peter Atherton ('Scientific Advisor' to 'FLP') and Bob Parker ('Managing Director' of 'FLP UK'), they will notice that Martyn Lewis seems to have been completely taken-in by these two avuncular preachers of the fraudulent 'FLP' Gospel of Prosperity. That said, neither of these charlatans made any real attempt to peddle the so-called 'MLM income Opportunity' during the interview. Instead, they stuck to reciting their (conveniently-unquantifiable) cure-all mantra.







Yet, in order to understand exactly what smartly-dressed double-act, 'Atherton and Parker,' were doing, all anyone with an ounce of common-sense needs to do, is merely remove the words, 'Aloe Vera,' and put back the original, 'Snake Oil,' into this up-dated, but nonetheless absurd, quackery.




Now for those readers who don't know who Martyn Lewis is, or why his  apparent association with 'FLP' should shut-down the critical and evaluative faculties of adherents and casual observers: he is a highly-respected, retired BBC television newsreader who became internationally-famous in 1997, when he announced the death of Princess Diana.



Mr. Lewis is also a noted champion of charity in the UK (for which he received his CBE).  He is the vice-president of Macmillan Cancer Support. Sadly, it would appear that the manipulative racketeers behind 'FLP,' have obtained the services of Mr Lewis as an unwitting guarantee of authenticity, simply by pretending affinity with his (publicly-stated) existing beliefs and instinctual desires, and by offering to give £100 000 to Macmillan Cancer Support. Thus, shutting-down Mr. Lewis' critical and evaluative faculties whilst, at the same time, giving him the illusion that he made a free-choice to become involved with 'FLP' - making it very difficult (if not impossible) for him to face the reality that 'MLM' is not only a pernicious blame-the-victim racket, but also an ongoing threat to democracy and the rule of law. 

It is very interesting to note that it is actually 'FLP' adherents who have been raising money for Macmillan, but 'FLP' has received the kudos.

Iconic British Television personality, Michael Aspel (b. 1933)
Iconic British television personality, Valerie Singleton (b. 1937)

The grooming and co-opting of an evidently-ill-informed, iconic, British television personality, Martyn Lewis, to front a propaganda video, doesn't surprise me in the least, because 'Forever Living' is a copy-cat of 'Amway' and, as part of an overall pattern of ongoing major racketeering activity, the 'Amway' mob followed exactly the same subversive tactic in Britain during the 1980s and 1990s - when evidently-ill-informed, iconic British television personalities, Michael Aspel and Valerie Singleton, were both deceived. In the case of Michael Aspel, this involved 'Amway UK' company officers overcoming his initial scepticism by offering to give £30 000 to his favourite charity. Valerie Singleton who, at the time, had been sacked from the BBC (following a public scandal) seems to have been fooled by Mr. Aspel's involvement with 'Amway.' 

Second generation 'Domionist MLM income opportunity' racketeers, Dick De Vos and Steve Van Andel, posing as a pair of visionary, philanthropic, Christian billionaire businessmen who have helped more than 3 millions people around the world to start their own business. 
Former, penniless 'Missionary,' turned  'MLM income opportunity' racketeer, Rex Maughan, posing as a visionary, philanthropic, multi-millionaire, 'Mormon' businessman who has helped more than 9 millions people around the world to start their own business.



The original 'MLM income opportunity racketeer,' Carl F. Rehnborg (1887-1973), posing as a historically-important, visionary-scientist, autodidactic scholar and multi-millionaire, philanthropic businessman who helped thousands of people to start their own business.


The parallels between the 'FLP' fairy story, peddled as reality by Rex Maughan, and the the 'Nutrilite' fairy story, originally peddled as reality by Carl F. Rehnborg (and more recently by the De Vos and Van Andel clans), 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 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://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 Amway women 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.



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 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/income opportunity' companies ('Amway', 'Herbalife', 'Nu Skin', 'Forever Living Products', etc.) which have been used to dissimulate vast closed-market swindles or pyramid schemes. The racketeers behind these counterfeit direct selling companies, have acquired their wealth by steadfastly pretending moral and intellectual authority, whilst deceiving an endless-chain of victims (now comprising many tens of millions of individuals around the globe) into making regular losing-investments 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 transactions, already totalling many billions of stolen dollars, were actually based on the false expectation of future reward. However, they have been laundered as lawful retail sales based only on value and demand. 

The outrageous 'MLM direct selling'  lie, has been hiding in plain view 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 pseudo-economic theory that  endless chain recruitment +  endless payments by the recruits = endless profits for the recruits,  However, it is important for readers to distinguish between short-term participants and chronic, core-believers in the 'MLM income opportunity' fairy story. 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 declared annual roll-over rate in groups like 'Amway', 'Herbalife', etc., has always been well in excess of 50%. Those who have persisted for more than 3 years, is certainly no more than 5%. However, if you ignore the insignificant number of grinning shills at the top of the pyramids, the overall hidden roll-over/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 comprises 'millions of Independent Business Owners conducting billions of dollars of sales annually,' 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.'  

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 have posed as rigorous and ethical self-regulators vehemently opposed to pyramid schemes), have long-since ceased to set , let alone enforce, any common-sense limits 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 cruel joke:

'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 retailing 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: 'end users' '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 theft is lawful.'



David Brear (copyright 2013)