Monday, 16 January 2023

Robert FitzPatrick again explains why 'MLM/Direct Selling' is a Big Lie.


International Association to Expose, Study and Prevent Pyramid Schemes
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January, 2023
From: Robert L. FitzPatrick

Dear PONZINOMICS Readers, Colleagues and Friends,

The First Question Answered

With Ponzinomics published in all formats, 2022 was a year for me to stop and reflect on all my work in MLM and pyramid schemes, 25 years from when False Profits was published.

I made a discovery that leads me now to publish a "companion" book to Ponzinomics and False Profits. It's entitled, DIRECT SELLING, a Non-Fiction Fable.
DIRECT SELLING is smaller in size but no less relevant and important. It is focussed on the question I neglected, almost forgot, over the years. It's the first and the most basic question for consumers, regulators and journalists to ask -- but they almost never do.

Here is the question: Is MLM what it says it is: "direct selling"?

If it's not direct selling, there's no need to go further. It's using a false identity as bait. It's a con, a counterfeit, right from the start and everything that follows is based on a Big Lie. Also, there's no need to examine MLMs one at a time. They all use the same "direct selling" disguise.

Almost everyone skips over the "direct selling" question. If they question MLM at all, they go to, "Is it a pyramid scheme?" I was asked that "pyramid scheme" question in one of my very first media interviews by Mike Wallace on CBS 60 Minutes, and then a thousand times after that by journalists all over the world. Almost never am I asked, Is MLM "direct selling?" or, "What is direct selling?" That line of question would enable the journalists or a regulator or any consumer to see that MLM is something completely different, and then, maybe, to go see for themselves what it actually is. But, diverted by the revered "direct selling" identity, they never make a common-sense investigation.

Everybody's against Pyramid Schemes,
but who could oppose "Direct Selling?"

Even those who oppose MLMs, the anti-MLM movement, dive directly into the pyramid scheme question or fake income promises or false product claims, and seldom examine "direct selling." They allow MLM to remain safe within its disguise. It is implicitly granted, even by critics, "legitimacy" status of "direct selling," which no one opposes even if they know nothing about it.

Still, in the era of Costco and Amazon, you would think some journalists might ask, "How could millions of people find enough customers and sell them MLM products month after month to make a sustainable profit? Or, why would any direct sellers recruit their own competitors? Or, didn't "direct selling" go away 40 years ago? Or who needs a direct seller any more? But, they don't ask. Why?

Most – and this is especially true for regulators and journalists – don’t know what real direct selling is. They've never done it.

Most – and this is especially true for regulators and journalists – don't ask because don’t know what real direct selling is. They can't ask about something they know nothing about. They would not know how to evaluate an answer. It's not taught in law or journalism schools. Almost none have personally sold anything on a face-to-face, commission-only basis. They never spent lonely days searching for “prospects", never had to make a sale or face not being able to pay next month's rent. So, they rely on old myths about the "Yankee Peddler" and even repeat MLM's preposterous misrepresentations of, recruit your friends, high income, "anyone can do it," and products that "sell themselves."

If they had some knowledge or experience with real direct selling, they would ask obvious business questions like, how many retail customers does each "direct seller" have? How many sellers can an area support? What's the average retail profit margin? With higher priced commodity products, how can MLM-sellers compete with online sales or stores? When, these questions are not answered, they'd smell a rat. But they don't ask.

If people understood the realities of direct selling, they’d never be fooled by an MLM pitch.

DIRECT SELLING, a Non-Fiction Fable uses story and illustration to show the hard realities of direct selling. If people understood the realities of direct selling, they’d never be fooled by an MLM pitch. Anyone who has done it would fall down laughing to hear it described by MLM recruiters as fun and fulfilling or a pathway to the American Dream.

DIRECT SELLING is told as a fable to address timeless and universal issues. It is, at times, funny but always factual. It pulls back the curtain on the dark arts of true direct selling. It shows how MLM is not direct selling at all but uses some of direct selling's props and the worst of its old methods to disguise pyramid recruiting, a pathway to delusion and loss.


Monday, 17 October 2022

'Amway' recruitment banned in Japan.

In the tragi-comic era of Donald Trump, Alex Jones and 'QAnon,' the reality-inverting 'totalitarian' information/mind control technique known as, the 'Big Lie,' has suddenly attracted the attention of a new generation of critical commentators. That is to say, the spreading of a falsehood which is so colossal and outrageous that the average person cannot even begin to conceive that anyone would have the audacity to invent it. Yet, it has been known for a long time that, when even the most-crazy of 'Big Lies' gets repeated enough times, eventually many people will come to accept it as the truth. The actual truth then becomes a threat to the self-esteem of those who have fallen for the 'Big Lie,' and in this way, the actual truth itself can become mistaken for a lie. Consequently, the 'Big Lie' can be described as a form of sustainable criminal deception, because it can also prevent victims from facing reality and complaining.

Amway Japan ordered to halt transactions for six months over illegal soliciting | The Japan Times

Bearing the 'Big Lie' in mind, Japanese trade regulators have suddenly shut down 'Amway.'  The issuing of all new recruitment contracts, and all transactions, have been banned for 6 months (to start with), but only on the limited grounds that 'Amway' has been behind 'illegal soliciting.' In simple terms, Japanese regulators have taken this action because they have received complaints from a significant number of people who realise that they were deceived into signing up for 'Amway.'

'Amway' was first registered in Japan as long ago as the late 1970s (some sources say 1977 whilst others say 1979) and the hidden criminal function of this reality-inverting corporate front has evidently not yet been officially recognised. That said, more than 20 years ago, I encountered a group of Japanese lawyers attending a conference on cults in Paris. They were very interested to speak with me about the cultic aspect of 'Amway,' but I never heard a word from them after the event. At that time, I was informed that around 1% of the entire Japanese population* were claimed as current contractors of 'Amway.' This was a significantly higher % than anywhere else in the world. 

(*The entire population of Japan has been approximately 125 millions during the last several decades).


Thus, in the mid-1990s, 'Amway' was claiming more than 1.2 millions Japanese 'Distributors.' This means that, even at an annual churn rate of only 50%, 'Amway' was eating and spitting out around 0.5% of the entire Japanese population annually. That is significantly more than 1% of the adult population and over 10% per decade. Indeed, the Japanese chapter of the Big 'Amway' Lie has been particularly colossal and outrageous. Imagine if there were more than a million McDonalds restaurant franchises in Japan, but these were all secretly operating at a net-loss and being quietly closed (and replaced) annually at a rate in excess of 50%. Imagine also if not one of the human links in a never-ending chain of would-be business owners had been told that the overall net-loss churn rate for participation was effectively 100% (by design). Yet this demonstrably-fake 'Business/income opportunity' is the 'Big Lie' that the 'Amway' bosses have been peddling, and getting away with peddling, in Japan for decades - and right under the noses of Japanese journalists, regulators, law enforcement agents, legislators, etc.

In the UK, with a population of around 68 millions (just over half that of Japan), 'Amway' has never had more than around 100 000 claimed contractors. Interestingly, in 2007 British 'Amway' recruitment was also suspended when the UK company faced limited civil investigation (and possible closure) as the front for a pyramid scheme. The investigation discovered that at least one million contracts had been issued in the UK 1973-2006. As a result of the suspension of all new recruitment, the number of claimed 'Amway' contractors quickly collapsed to under 20 000 in Britain at that time.

Subsequently, the 'Amway UK Ltd.' mysteriously survived the regulators' somewhat timid attempts to close it definitively. 

It is to be hoped that the same mistakes will not be made in Japan.

David Brear (copyright 2022)

Wednesday, 31 August 2022

'Amway/Herbalife/ MLM' cult bosses have co-opted their very own 'cult advisers.'

Due to a recent enquiry about two self-styled 'cult advisers' who are still active in the UK, I am re-posting, and updating, an article from the past.


In 1945, whilst most, contemporary mainstream commentators were unable to look beyond the ends of their noses, with a perfect sense of irony, '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 'American/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.

Whilst watching this kitsch video of the 'Amway' fairy story, keep in mind that the quantifiable evidence proves (beyond all reasonable doubt) that, since 1959, tens of millions of individuals around the world have been churned through the so-called 'Amway income opportunity' whilst the overall, hidden net-loss/churn rate for so-called 'Amway Independent Business Owners' is effectively-zero. 

Again bearing the above in mind, back in the late 1990s, I contacted (separately) two (apparently independent) 'cult advice associations' (legally-registered as ‘charities’ in the UK), Catalyst’ and the ‘Cult Information Centre.’ I had an urgent enquiry about ‘Amway.’ I was obviously upset and in quite a vulnerable state, but I clearly explained to their directors that my brother (a teacher living in the north of England) had completely changed personality and become a would-be 'Amway millionaire.' I also clearly explained that my confused, widowed, elderly mother (with whom my brother was now living and who's large house he had turned into an 'Amway' recruitment centre) was in the process of signing over all my family's considerable capital assets into my brother's name.

Ian Howarth

Graham Baldwin

In ignorance, I had assumed that Graham Baldwin (Director of ‘Catalyst’) and Ian Howarth (Director of ‘CIC’) were free-thinking individuals who specialised in the study of cults, and who provided independent free advice, and accurate information, to enquirersHowever, both systematically excluded all quantifiable evidence to the contrary and they began to gaslight me - pretending that ‘Amway’ is a multi-national corporation offering individuals a business/income opportunity which a minority of participants have imagined to be a pyramid scam because they have lost money. They insisted that my concerns about ‘Amway’ being a cult were ridiculous, unfounded rumours spread by the organization’s commercial competitors and repeated by biased and ill-informed journalists. This was apparently in reference to ‘Amway’ having been profiled in the UK (in 1994) in a major ‘Time Out’ magazine article entitled, ‘Hidden Persuaders.' The article was published despite typical (empty) threats from the legal representatives of ‘Amway UK. In factGraham Baldwin was even briefly mentioned as a 'London-based cult adviser and former University Chaplain' who had received various calls from concerned 'Amway' adherents. Other, newspaper reports, variously described Baldwin as a 'former Army, or Military, Intelligence officer.' 

After conducting further research, I discovered that Ian Howarth has absolutely no qualifications relevant to the cult phenomenon, whilst Graham Baldwin obtained a standard degree in 'religious studies' at Kings College London in 1986. Baldwin then persuaded members of the faculty of Kings College that there was a growing problem with cult  recruiters on campus, and that he was going to tackle it by offering information and advice to students. This led to Graham Baldwin briefly styling himself as 'Chaplain' (a meaningless, but impressive, title). When I made enquiries to the religious studies Dept. of Kings College London to establish whether Mr. Baldwin had once been employed there, and why he had suddenly abandoned his self-appointed post of 'Chaplain,' I was contacted by the college's aggressive legal representative who informed me that, due to data protection legislation, none of my questions could be answered. However, when I contacted the UK Ministry of Defence, I discovered that Graham Baldwin's career as James Bond, is a fabrication.

The 1994 ‘special investigation’ published in 'Time Out' by News/features Editor, Tony Thompson, was headed:

‘Amway says it can make you rich beyond your dreams with its multi-level marketing system; critics say it only makes money for a very few at the top, and its techniques are worryingly cult-like.’

Far from being ill-informed, Tony Thompson had cited in his article the work of Professor Robert Jay Lifton who, in 1961 (after 10 years of detailed research, interviewing US servicemen held prisoner during the Korean War), published, ‘Thought Reform and the Psychology of Totalism.’ In this standard, medical text-book, Dr. Lifton identified 8 ‘themes’ which, if present in any group, indicate that its members are being subjected to a mixture of social, psychological and physical pressures, designed to produce radical changes in their individual beliefs, attitudes and behaviour.


1). ‘Milieu control’ — the attempted control of everything an individual experiences (i.e. sees, hears, reads, writes and expresses). This includes discouraging subjects from contacting friends and relatives outside the group and undermining trust in exterior sources of information; particularly, the independent media.

2). ‘Personal or mystical manipulation’ — charismatic (psychologically dominant) leaders create a separate environment where specific behaviour is required; leading to group members believing that they have been chosen and that they have a special purpose. Normally group members will insist that they have not been coerced into group membership, and that their new way of life and beliefs are the result of a completely free-choice.

3). ‘Demand for purity’ — everything in life becomes either pure or impure, negative or positive, etc. This builds up a sense of shame and guilt. The idea is promoted that there is no alternative method of thinking or middle way, to that promoted by the group or by those outside it. Everything in life is either good or bad and anything is justified provided the group sanctions it as good.

4). ‘Confession’ — personal weaknesses are admitted to, to demonstrate how group membership can transform an individual. Group members often have to rewrite their personal histories and those of their friends and relatives, denigrating their previous lives and relationships. Other techniques include group members writing personal reports on themselves and others. Outsiders are presented as a threat who will only try to return group members to their former incorrect thinking.

5). ‘Sacred science’ — the belief in an inexplicable power system or secret knowledge, derived from a hierarchy who must be copied and who cannot be challenged. Often the group’s leaders claim to be followers of traditional historical figures (particularly, established political, scientific and religious thinkers). Leaders promote the idea that their own teaching will also benefit the entire world, and it should be spread.

6). ‘Loading the language’ — a separate vocabulary used to bond the group together and short-circuit critical thought processes. This can become second nature within the group, and talking to outsiders can become difficult and embarrassing. Derogatory names, or directly racist terms, are often given to outsiders.

7). ‘Doctrine over persons’ — individual members are taught to alter their own view of themselves before they entered the group. Former attitudes and behaviour must then be re-interpreted as worthless, and/or dangerous, using the new values of the group.

8). ‘Dispensing of existence’ — promotion of the belief that outsiders — particularly, those who disagree with the teaching of the group — are inferior and are doomed. Therefore, they can be manipulated, and/or cheated, and/or dispossessed, and/or destroyed. This is justifiable, because outsiders only represent a danger to salvation.


In 1994 'Amway' claimed '73 000 Independent Business Owners' in the UK, but the company acknowledged a staggering annual churn-rate of at least 50%. Tony Thompson discovered that almost all 'Amway' adherents were losing money (some to the tune of tens of thousands of £), whilst the majority of financial activity within the ranks of the organization in the UK, was actually the sale of publications, recordings, tickets to meetings, etc., on the pretext that these 'optional' materials were 'vital to achieving total financial freedom.' 

Tony Thompson also discovered that, since 1973, the UK branch of this fraud had secretly generated hundreds of millions of pounds in cash (without the payment of UK tax) and that it was being run behind various (apparently independent) UK-registered corporate fronts, including, 'International Business Systems UK,' but that the bulk of the illegal profits were being shipped to 'Amway Diamonds' in the USA, like 'Pastor' Dexter Yager. 

In other words, the so-called 'Amway MLM income opportunity' is the bait in a cultic trap. 

Almost a decade after Tony Thompson's 'Time Out' article exposing 'Amway, ' American network television discovered the identical racket in the USA, but hidden behind the corporate front of  'Quixtar.'

From my own disturbing experience with members of my family, after reading Tony Thompson’s article and examining other similar evidence collected by the French cult advice association, UNADFI (Union of Associations for the Defence of the Family and the Individual), I had immediately realized that my brother (at a vulnerable time in his life) had (in exchange for an illusory Utopian offer of 'future freedom, prosperity and happiness') sold his soul to a gang of American-based racketeers. I also realized that all Lifton's published ‘thought reform themes’ were present within ‘Amway.’ However, this obvious analysis was systematically rejected by Messrs. Baldwin and Howarth. Laughably, they actually tried to undermine my trust in the independent media (an information-control technique, clearly-explained in the first of Lifton's 'themes'). Yet, at this time, Baldwin admitted to having around 70 ‘Amway clients’ on file, whilst Howarth acknowledged having at least 50. When I asked: Exactly why , if 'Amway' wasn't a cult, had all these people contacted 'Catalyst' and the 'Cult Information Centre'?; and: If any Amway clients’ had been passed on to legislators, law enforcement agents or to journalists in the UK?; Messrs. Baldwin and Howarth refused to reply. Furthermore, they then began to challenge the authenticity of my own encounter with ‘Amway.’ When I refused to accept their inflexible opinion of ‘Amway’ as 'non-cultic,' both posed as innocent victims under attack. They pretended moral and intellectual authority, treating me as though I had absolutely no right to question them, because they were experts. I was finally asked for money by Ian Howarth in return for his ‘advice,’ whilst Graham Baldwin told me that he had once been an ‘officer in British Army Intelligence’ and that although he didn't 'charge for advice,' it was customary to give his charity a 'donation.'

I later discovered that, at the time I contacted them, Messrs. Baldwin and Howarth were both under contract to ‘Amway UK Ltd. as ‘consultants.’  I had, in fact, been speaking to the de facto agents of the ‘Amway’ leadership.

I am reliably informed that not long after I had contact with them, Mr. Howarth (and possibly Mr. Baldwin) had direct contact with my mother, to whom he was presented by my brother as a 'cult expert'. Obviously, he never declared his connections with 'Amway.' In this way, an unqualified charlatan convinced my mother (who had begun to have some doubts) that 'Amway' is not cultic and that I was dangerously-deluded to say so. Indeed, she subsequently became totally-convinced that I was being paid by the British inventor/industrialist, James Dyson (who was in litigation with 'Amway' in the USA), to defame 'Amway' in the UK, and she even signed (along with my brother) a false deposition stating that I had made a full-confessionMy mother died in 2004, never having recovered her critical and evaluative faculties.

Unfortunately, since the mid 1990s, Messrs. Baldwin and Howarth have been allowed to promote themselves as 'cult experts' whilst simultaneously living off funds deriving from a classic blame-the-victim, cultic racket. Indeed it's not just the 'Amway' racketeers who have paid them. Despite their self-righteous fa├žade of honesty and philanthropy, the clandestine activities of these two in Europe, on behalf of their billionaire American paymasters, undoubtedly forms part of a pattern of ongoing, major racketeering activity (as defined by the US federal Racketeer Influenced and Corrupt Organizations Act, 1970). 

As a result of my persistent complaints, the UK government tried, but mysteriously failed, to have 'Amway UK Ltd.' closed down as a dissimulated pyramid scheme in 2008, using the civil procedure of a public interest bankruptcy petition. At that time, UK regulators discovered that at least one million UK and Irish citizens had been churned through 'Amway' during the period 1973-2006. It was also estimated that up to $ one billion dollars could have been stolen via the sale of so-called 'training and motivation' materials. The main UK-registered corporate fronts for this secondary part of the 'Amway' racket were voluntarily closed, and their bosses excommunicated from 'Amway', evidently to prevent further investigation. However, UK regulators had found it difficult to trace victims. Most remained silent out of shame and embarrassment, but also because they had been recruited by a friend or relative. Any 'Amway' victims who had approached Messrs.Howarth and Baldwin, were never directed to the authorities or to the media. Instead, they were either persuaded that 'Amway' is neither a cult nor a fraud, and that there was nothing that could be done, or they were taken to 'Amway UK,' where presumeably limited-compensation was offered in return for their silence.

I would contend that, due to their long-term paid efforts to gather and silence 'MLM' victims, Messrs Baldwin and Howarth are partly-responsible for the current situation in the UK, where it is claimed that in excess of 630 000 persons (more than 90% of whom are women) are under contract to 'Amway' and its copy-cats - 'Herbalife', 'Forever Living Products', 'NuSkin', Mary Kay', etc. . Again, it should be remembered that the hidden overall net-loss churn rate for 'MLM' participation is known to be effectively 100%. Literally millions of people have been, and continue to be, temporarily enslaved by these 'MLM' cults in Britain alone. It is already established beyond all reasonable doubt that (by design) effectively all 'MLM' contractors have ultimately abandoned (and will ultimately abandon) this economically-suicidal activity, after failing to generate an overall net-profit. Not-forgetting that in a significant number of cases, chronic 'MLM' adherence has not only resulted in destitution, the abandonment of traditional careers and education, the destruction of marriages, families and friendships, etc., but also in victims exhibiting chronic psychological deterioration symptoms and, in the very-worst cases, committing actual suicide.

Laughably, Messrs. Baldwin and Howarth have been variously reported in the UK media as having helped thousands of cult victims, and their relatives, in the UK. However, these frequent, glowing portraits seem to be based largely on Messrs, Baldwin and Howarth's own unsubstantiated, and unchallenged, grandiose anecdotal statements about their own activities. These fantastic fairy stories have gradually been fed to the press (particularly, to one freelance journalist of their acquaintance). Sadly, these big lies have been repeated so often, that eventually they have become accepted as the truth. 

For a while, Ian Howarth succeeded in infiltrating a pan-European federation of cult research/advice associations, FECRIS. In 2004, at my instigation, during a FECRIS conference in Marseilles (at which I was present), Mr. Howarth was privately invited by the board of FECRIS to participate in an internal enquiry (to be conducted by Anne Edelstam and Jean Pierre Jugla) into the extent of his connections with 'Amway.' At the time, I was not aware that Howarth had been working for other 'MLM' cults including 'Herbalife.'

Howarth's initial response, was to admit that, yes, he was a paid consultant to 'Amway UK Ltd.' He then told the astonished board members of FECRIS that he wanted the other FECRIS associations to pass any complaints they had received about 'Amway/MLM' to him, because he had already negotiated compensation for people who had lost money. It turned out that Howarth's trip to Marseille, and all his related-expenses, were actually being picked up by 'Amway.'

Howarth was given a series of written, common-sense questions about his 'Amway' connections by Anne Edelstam and Jean Pierre Jugla, which (not surprisingly) he flatly refused to respond to. However, before he could be kicked out of FECRIS, Mr. Howarth resigned and accused its board of 'behaving like a cult.'

Howarth subsequently published a simplistic, and unoriginal, 44 page booklet entitled, 'Cults, a Practical Guide.' Of course, this contained no mention of 'MLM/commercial' cults. This potentially-dangerous ommission, must have been influenced by 'AmwayMLM' money.

A couple of years ago, I was told by a colleague of Howarth that he no longer is employed by 'MLM companies, and that privately he admits that he made a mistake. However, it's a certainty that Howarth will have signed open-ended employment contracts with various 'MLM' front companies making it very difficult for him to face the truth publicly. Thus, to date (by his silence), he remains the de facto agent of racketeers. I for one would like to know exactly how much stolen money did he get in total?

As for Graham Baldwin, I have no idea if he is still employed by 'MLM' racketeers, but I would strongly suspect that he is. Again, he will almost-certainly have been obliged to sign open-ended gagging-agreements. However, I do know that (for years) Baldwin has been appealing to the UK public to give his charity £1.5 million to create a centre for training cult counsellors and for helping cult victims, where he and his associates, will offer pyschiatric therapy, counselling and legal advice.

David Brear (copyright 2022)