Friday, 17 January 2014

'NuSkin' and 'Herbalife,' China Crisis.

Before reading about the latest twist in the ongoing tragicomedy entitled 'Multi-Level Marketing,' the many new visitors to this Blog (particularly, researchers working for Wall St. traders) are invited to take a look at some remarkable optical illusions which clearly demonstrate that the human mind can be easily deceived simply by changing the context in which we see things. .

A stalking-panther, when photographed hiding in plain view in a jungle environment, is almost invisible to the human eye if shown only in black and white, but the same dangerous predator is immediately obvious to us, when shown in colour. 

Two rectangles of identical colour and shade, appear to be of different colour and shade when each one is surrounded by rectangles which alter the context in which our minds automatically see them. 


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 hiding in plain view, 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 (lurking 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,' etc.).
No free-thinking observer now seriously disputes that deluded, core-'MLM' adherents  see the world only in two dimensions, 'positive vs negative.' The growing mountain of evidence shows that vast numbers of ill-informed victims have been deceived into entering this style of dissimulated cultic swindle, then, on the pretext that 'the exact duplication of a step-by-step positive plan will lead to success,' they have been intellectually-castrated (without their fully-informed consent) so that their minds will only accept what their leaders have arbitrarily defined as 'positive,' whilst systematically excluding what these same cultic charlatans have arbitrarily defined as 'negative.' Thus, when seen only in the fake 'positive' context of: 'Business', 'Independence', 'Financial Freedom' , 'Low Risk' , 'Direct Selling', 'High Quality, Good-Value, Scientifically-Proven Products', 'Research','Development', etc. 'MLM income opportunities' can appear to be authentic. Sadly, this dangerous inversion of reality has been further confirmed by celebrity/political/scientific/corporate endorsements contained in glossy-advertising. 

Self-evidently, when the wider-picture is examined (by persons with fully-functioning critical and evaluative faculties), all two-dimensional 'MLM' propaganda forms a pattern of ongoing, major, racketeering activity, because these artificially-created, fake 'positive' contexts have actually been financed by the proceeds of crime in order to perpetrate further crime and to prevent the victims from confronting reality and complaining. 

It is only when you take 'MLM income opportunity' frauds out of their artificially-created, fake 'positive' contexts, that their true, predatory nature becomes immediately obvious.

Since they were first instigated in the USA in the late 1940s, so-called 'MLM income opportunities' have been hiding effectively 100% overall  loss/churn rates. Thus, when you examine the absurd, self-gratifying version of the 'MLM' fairy story entitled 'NuSkin,' it's difficult to believe that any educated adult could swallow this up-dated hybrid of snake-oil, and pyramid scheme, quackery

In essence, the authors of the 'Nu Skinfairy story have steadfastly pretended that: 

They have not only found the secret of halting the human ageing process, but they have also found the secret of transforming ordinary, powerless people into happy and beautiful, superhuman multi-millionaires. 

Furthermore, the creators of the 'Nu Skin' Utopia are willing to share their exclusive secret knowledge with anyone (for a price).

Stuart Kim

For a long time, the 'Nu Skin' quacks have been using millions of dollars of their ill-gotten gains to bedazzle academics and buy association with Stanford University. However, they have been caught using a researcher’s name - falsely claiming that 'Stuart Kim' (Genetics Dept. Stamford University) 'is partnered with Nu Skin.' 

Consequently, Stanford University sent a letter to 'Nu Skin Enterprises,' warning the company that Stuart Kim's name had to be removed from all advertising material.

It turns out that Stuart Kim was previously approached by the 'Nu Skin' quacks to fund research into skin-ageing.  Both the researcher, and a spokesman for Stanford  University, confirm that the Dermatology Dept. has indeed, previously received substantial funding from 'Nu Skin,' but Stuart Kim has not.

Even though multi-level, commission-based, direct selling schemes were specifically identified as being just another means of dissimulating pyramid schemes (using effectively-unsaleable wampum to launder losing-investmet payments), and declared unlawful, in China in 1998, in 2005, a herd of corporate Trojan Horses (one of which was labelled 'NuSkin') got inside Chinese defences. Representatives of the 'NuSkin' racketeers and their criminal associates, pretending affinity with regulators, legally-registered front-companies which all obtained a licenses only to operate:
  • a single-level direct selling scheme.
  • retail outlets.

It wasn't until August 2012, after an American short seller, Andrew Left, published research and analysis explaining how 'NuSkin' was potentially a very dangerous investment, because its real activities are not in compliance with the law in China, that  US-based financial journalists started timidly to ask questions. CNBC was then given this very precisely-worded statement by the 'NuSkin' Ministry of Truth: 

'We are confident our China operations are in compliance with the applicable (direct selling) regulations as interpreted and enforced by the government of China. Nu Skin has an eight-year history of doing business inChina under these regulations. Our business modelin China is different than the global business model. We follow all regulations and any member who does not follow company policies issubject to discipline.'

It is interesting to note that, in the above statement, the 'Nu Skin' bosses didn't actually claim to be in compliance with Chinese criminal laws prohibiting fraud and corruption. On the contrary, they steadfastly pretended only to be in compliance with current, unnamed, senior Chinese government members' and officials' interpretation of technical regulations which define lawful (i.e. single level) direct selling and which (apparently) the 'Nu Skin' bosses, and other US-based 'MLM income opportunity' racketeers, had a hand in drafting. Classically of 'MLM' racketeers, the 'Nu Skin' bosses also steadfastly pretended that they are completely unaware of any regulations having been broken in China, but if they have been broken, 'Nu Skin' itself is not responsible, whilst the company will punish the individual adherents who are.  

1/16/2014 2:25:00 PM - RTT News 
1/16/2014 10:11:00 AM - Seeking Alpha 
1/16/2014 10:08:00 AM - Seeking Alpha 
1/16/2014 9:49:00 AM - RTT News

Last week, it was announced in the state-controlled Chinese press that, the Chinese authorities are to investigate 'NuSkin's' real activities in China as a suspected pyramid fraud which has been brainwashing its victims exactly like a 'religious' cult. 

  • A middle-aged Chinese 'NuSkin' adherent was reported as telling relatives that she wanted to make 'NuSkin' her business of choice for the rest of her life, earn big money and change her destiny, and that she was going to sell her home to invest in more 'NuSkin' products.
  • Chinese reporters attended a recent meeting in Beijing which they described as 'fanatical.' Approximately, 20,000 delirious 'NuSkin' adherents waved flash lights and chanted slogans.
  • The Chinese reporters discovered that 'NuSkin' adherents have been obliged to buy publications, recordings, tickets to meetings, etc. 

This is not the first time that the Chinese media has used the term 'cult' to describe a counterfeit 'direct selling' company peddling the 'American Dream.' Indeed, it was 'Amway's Prosperity Gospel' activities in China which led to the Chinese government banning so-called 'MLM income opportunity' schemes in 1998, but (after the intervention of US government trade officials) allowing an 'Amway' front-company, and those of various 'MLM income opportunity' rackets, to  re-enter China after their representives apparently undertook to reform their established practises and become retailers and the sponsors of single-level direct selling schemes.,0,2452650.story#axzz2qtAb7ZCI Since around one third of 'NuSkin's' declared annual sales revenue has lately derived from its claimed 'reformed' activities in China, the news that 'NuSkin' is now to be investigated as a cultic pyramid fraud, triggered an immediate collapse (43%) in the artificially-inflated market price of effectively-valueless 'NuSkin' shares - also dragging down (10%) the artificially-inflated market price of effectively-valueless shares in the 'Herbalife' racket.

'NuSkin,' in fact, only has a license to operate in 19 of China's 32 states. 

All this, begs some important questions : 

Might Chinese investors, and/or officials, with inside information about the 'NuSkin' investigation, have obtained (or be about to obtain) short positions on Wall St. against counterfeit 'direct selling companies?'

Might the US government be ultimately held responsible for not only allowing this form of cultic racketeering to go effectively-unchallenged in America, but also for actively assisting its infiltration into China?

Since (the ironically-Orwellian year) of 1984, 'NuSkin' has been the label hung over the entrance to a typical labyrinth of corporate structures, which first appeared in the USA, then Canada (1990) and Hong Kong (1991) as a series of legally-registered, privately-controlled, limited-liability, commercial-companies comprising 'NuSkin International.' 

In 1992, 'NuSkin' reached settlements with 5 American States (Pennsylvania, Florida, Illinois, Ohio, and Michigan) over allegations of misleading marketing practises; admitting no wrongdoing, but, all the same, paying the States' costs, refunding numerous losing participants and changing the wording of its literature. 

The Connecticut Attorney General sued 'Nu Skin,' charging the company with misleading its participants and running a pyramid scheme. Following a 1994, low-level civil investigation by the US Federal Trade Commission,'NuSkin' was allowed to continue in the USA after paying $1 million and signing a effectively-toothless consent decree prohibiting it from making 'deceptive or unsubstantiated claims about its products.' 

Despite the organization's reputation as an absurd scam, in 1996, 'NuSkin Enterprises' was allowed to be launched on the New York Stock Exchange, and  the criminal enterprise was exported around the globe. In 1997, the 'NuSkin' mob paid a derisory $1.5 million to the FTC to settle ongoing allegations of 'making unsubstantiated claims about its products.' At the same time, the Attorney general of Pennsylvania sued 'NuSkin,' again alleging that the company operated a pyramid scheme through a subsidiary corporate structure, 'QIQ Connections.' The Attorney General's office discovered that that 'QIQ' participants had paid for the right to market something which did not exist. 'NuSkin's' attorneys halted the suit by dissolving the subsidiary, obliging victims who had paid money to 'QIQ' to transfer to 'Big Planet' (a newly-created blind alley in the mystifying 'NuSkin' labyrinth) offering 'Internet technology.' Classically, the head of 'Big Planet' then dismissed the pyramid-scheme charge as 'a few distributors who, in their enthusiasm, have been overzealous in some of their marketing activities.'

By the summer of 2010, 63 millions 'NuSkin shares' had been sold and these were illegally-trading at $27 a piece, making the counterfeit 'Direct Selling' company theoretically worth approximately $1.7 billions. 

Blake Roney         Sandie Tillotson            Steve Lund

At this time, 4.46 millions effectively-valueless 'NuSkin shares' owned by Blake Roney, Sandie Tillotson, Steve Lund and the 'Mormon Church' were unloaded for $114.3 millions.

The financial institution which (apparently, in complete ignorance of reality) handled part of the unlawful flotation of the 'Nu Skin MLM income opportunity' racket on the New York Stock Exchange, is Deutsche Bank Securities USA. 

Bill Schmitz  

For obvious reasons, Bill Schmitz (Managing Director of Deutsche Bank Securities USA) once felt obliged to take part in the CNBC debate in defence of his de facto criminal associates. However, some of the statements which this grinning, young fellow made (apparently, still in complete denial of reality), were the equivalent of admitting that US-based 'MLM income opportunity' racketeers have conspired to subvert the rule of law in China. 

At one point Schmitz foolishly-boasted:

'They (the bosses of "Nu Skin") wrote the law in China. The chairman and CEO was there when the World Federation (of "Direct Selling Associations"satdown with the Chinese Government and scripted the law.'

To date, the market-value of these bedazzling pieces of paper bearing the words, 'NuSkin Share Certificate,' has been based on the demonstrably-absurd lie that the constantly-expanding, and increasingly-profitable, 'NuSkin/MLM' enterprise is perfectly lawful, and that billions of 'NuSkin' products have been, and will continue to be, sold to customers (based on value and demand).

However, some very important, common-sense questions have evidently never been put to the corporate officers of 'NuSkin Enterprises Inc.,' by anyone from the mainstream media, the FTC, the SEC or the FBI; principally:

Where has the bulk of your alleged 'direct selling company's' alleged 'income opportunity's' alleged 'lawful sales revenue' actually come from:

the regular retailing of goods, and/or services, directly to the general public by your alleged 'distributors' for a profit?


from an endless-chain of recruits' regular, losing-investments (based on the false expectation of future reward) laundered as 
'sales (based on value and demand)?'

The following is essentially the same common sense question as above.  It was only put to Bernie Madoff after decades of increasingly-grandiose lies and mystifying distortions had been swallowed as the truth:

Has your company's alleged 'constantly-expanding, and increasingly-profitable, investment scheme' had any significant source of revenue other than its own alleged 'investors?'

In the end, it was discovered that the answer to the question was 'no,' and Madoff got 150 years prison for peddling his wealthy victims infinite shares of their own finite money and for going to extraordinary lengths to hide the truth; but Madoff was not accused of cheating millions of people or of obstructing justice via the covert bribing of a leading US Presidential candidate with, millions of stolen dollars.

In February 1999, Mitt Romney was hired as President and CEO of the 'Salt Lake Organizing Committee for the Olympic and Paralympic Winter Games 2002.' In that professional capacity, Mitt Romney arranged for the 'Nu Skin' racketeers to pay $20 millions to 'sponsor' the Salt Lake City Olympics. At the time Romney was hired, the Salt Lake Organizing Committee was facing a budget deficit of approximately $400 millions. Although 'Nu Skin' has been legally-registered as a commercial company, the source of its bosses' timely $20 millions contribution to save the Olympics, was crime.

Immediately after the 'Nu Skin' Olympic 'sponsorship' deal was made public, Romney appeared at a typically-kitsch 'NuSkin' orgy of deluded self-gratification (held in Salt Lake City), attended by more than 10 000 adherents.

In a glittering, pay-through-the-nose-to-enter, scripted-fairytale, reminiscent of the 'Biblical Golden Calf' (which, incidentally, was also produced entirely from its deluded worshippers' own gold), Romney enthusiastically told the unquestioning 'MLM' multitude that 'NuSkin' and the 'Olympics' were 'about taking control of your life and managing your own destiny.' 
At the same 1999 assembly, 'Nu Skin' Boss, Steve Lund openly-boasted: 'We have aligned ourselves with the Olympics because this alignment helps you do your jobs better.'  Lund then claimed that the Olympic rings on distributors' business cards would bring them loads of new recruits, and that Olympic affiliation would 'also further mainstream our brands in the business community.'

As part of the Olympic 'sponsorship' deal, 'Nu Skin' and its subsidiary, 'Pharmanex,' gave free 'nutritional supplements' and 'vitamins' to Olympic athletes. At the exactly the same time, the International Olympic Committee was instructing participants not to take any supplements, because of concerns that these might be adulterated with banned substances. The IOC even cited lax US regulation as being part of the problem. However, Mitt Romney insisted that he personally had 'no problem with Nu Skin's quality,' and, as a result, the 'NuSkin' racket was heavily-promoted on television during the 2002 Winter Olympic and Paralympic Games.

In the light of the wider-evidence, the laundering of 20 millions stolen dollars to infiltrate the Olympic movement for the purpose of perpetrating and dissimulating a global fraud, clearly forms part of a pattern of ongoing, major racketeering activity (as defined by the US federal Racketeer Influenced and Corrupt Organizations Act, 1970). 

To date, no rigorous investigation has ever been pursued into these extensive organized crimes, and, if Mitt Romney, had been elected to the White House, the chances of any 'MLM' racketeers being held fully to account in the USA, would have  become virtually zero.
In 2011, it was revealed that two Utah-registered corporate structures controlled by the bosses of 'NuSkin' had each given $1 million  to 'Restore Our Future,' a so-called 'Super PAC' (instigated by former aides to Mitt Romney), to 'support Mr. Romney's bid for the White House.'

Unfortunately, there was no one of a sufficiently high moral, and intellectual, calibre within the leadership of the Democratic party, or within the mainstream media, who had the gumption to put some blindingly-obvious questions directly to Mr. Romney in the lead up to 2012 US Presidential election?

Where does 'MLM' money actually come from, and why do you suppose 'MLM' bosses have given so much of it to you?

If the USA was a rational country ruled by law (which manifestly it has long-since ceased to be), it would be FBI agents putting the above questions to Mr. Romney and other corrupt 'Mormon' politicians in Utah, but then the ultimately-laughable, non-rational, criminogenic phenomenon of 'MLM Prosperity Gospel' cultism would never have been allowed to become established in the first place.

David Brear (copyright 2014)

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