On this thought-provoking Blog, Englishman, David Brear, guides us to the dark heart of a modern-day, totalitarian labyrinth and shines a piercing light on its manipulative rulers and manipulated inhabitants. First, he provides a spool of unbreakable thread so that we can all find our way safely home. Blog readers may contact David Brear via: axiombooks@wanadoo.fr
Julie refuses to be labelled an'MLM' victim and although she prefers to see herself as an 'MLM' survivor, she's more than this, because she has decided to overcome her initial shame and embarrassment, and challenge publicly the Big 'MLM'Lie - which was used to exploit her for 5 years. Julie can now face the truth that she was not only defrauded herself, but also tricked into trying to defraud others whilst acting under the guided-delusion that she was trying to help them.
All of a sudden, the RICO Act is all over the media.
The Racketeer Influenced Corrupt Organizations (RICO) Act (enacted by section 901 [a.] of the Organized Crime Control Act) is a United States federal law which (in theory) provides extended criminal penalties for, and powerful civil remedies against, the leaders and agents of ongoing criminal organizations and their de facto associate enterprises.
In the early 1960s, after Robert Kennedy was appointed Attorney General, the US Dept. of Justice was given a significant role with a co-ordinated national ‘Strike Force,’ established under the direction of the Inspector General of the US Dept. of Labor. This new initiative was the product of an overt, joint congressional policy to hold the leaders of major organized crime groups to account, as well as dismantle their webs of corrupt political figures, judges, attorneys, trade union officials, senior law enforcement agents, etc.
Even though he never faced criminal prosecution, the long-time Director of the FBI, J. Edgar Hoover, is now known to have been under the influence of racketeers. He was certainly being bribed and probably blackmailed. Despite a growing mountain of conclusive evidence, for decades, Hoover steadfastly denied the existence of the 'Mafia,' let alone a syndicate of major organized crime groups, in the USA. Yet, the average American knew full-well that, during these same decades, a pernicious criminal underworld had been gnawing its way into the heart of the republic. However, although the Democratic administration’s will to protect US citizens was apparently hardened by the assassinations of President Kennedy and Robert Kennedy, existing legislation was deemed inadequate. Paradoxically, the US Justice Dept. had an ‘Organized Crime and Racketeering Section,’ but technically these offences were not really defined in law. Thus, RICO was signed into law in 1970 by the new Republican President, Richard Nixon, but only as a result of ground-breaking recommendations made in the late 1960s by President’s Johnson’s 'Commission to Examine Crime in America.'
(former Special Attorney in the Organized Crime and Racketeering Section of the Justice Dept.) under the close supervision of the veteran Democratic Senator for Arkansas, John Little McClellan http://en.wikipedia.org/wiki/John_Little_McClellan .
Subsequently (guided by Prof. Blakey), a number of individual States (notably, California and Georgia) enacted similar legislation.
The RICO Act appeared for all the world to be directed against the Italian American ‘Mafia,’ although its authors refuted this. Whether intentional or not, the Italian-sounding acronym, 'RICO,' is the name of the fictional anti-hero of the classic 1931 Hollywood gangster movie, ‘Little Caesar’ (starring Edward G. Robinson, directed by Mervyn LeRoy and based on the 1929 Novel by William R. Burnett). The RICO Act was drafted by lawyers for lawyers, and is, therefore, legalistic, but, at first glance, it can appear to be written in plain language, because it also contains some popular terms. Even when deconstructed, the Act (like the enduring phenomenon it addresses) cannot be fully-understood in isolation. In reality, in respect of the ‘Mafia,’ by 1970, the RICO legislators were trying to shut the stable door long after the horses had bolted and begun to breed.
Tellingly, another full decade was to elapse before an elderly and insignificant ‘Mafia’ decoy 'boss', Frank Tieri (who had previously pretended to be an employee of a sportswear manufacturer), was actually convicted under RICO. http://en.wikipedia.org/wiki/Frank_Tieri_(mobster). However, RICO legislators had access to a lot of key inside information, some of which had been supplied by 'Mafia' apostateslike Joe Valachi http://en.wikipedia.org/wiki/Joseph_Valachi:
Thus, it was known that violent gangs of thieves had been endemic to, and feeding off, Sicilian and southern Italian culture for centuries. However, at the beginning of the 19th century a pernicious phenomenon appeared in Sicily. By the mid-19th century, well-organized, all-male gangs were being described in reports (written by insightful Italian government officials) as ‘sects’ or ‘cults' of 'thieves.' Their main criminal enterprise involved the instigation of a form of perverted belief system in which converts were persuaded of imminent and omnipresent doom, but then they were peddled salvation. This classic cultic protection racket was based on the fact that fear spreads like a virus and, eventually, can become a way of life. By means of strategic attacks, farmers in certain regions of Sicily (where government was distrusted), became convinced that their crops and homes would be burned and that they, and/or their families, and/or their livestock, would be poisoned, shot, mutilated, etc., if they didn't keep paying for private protection. Like 'Fagin' in 'Oliver Twist,' leaders of these extortion-gangs directed operations and controlled all the profits, exploiting not only victims, but also gang members who displayed unquestioning loyalty to a point where they would lay down their lives. This behaviour has been described as being part of Sicilian culture, but (according to reliable witness testimonies) it was actually produced by co-ordinated, devious techniques of social, psychological and physical persuasion - comprising ritual incrimination combined with ritual initiation into pyramids of secrecy and obedience like those found within 'Catholic,' Military Orders (e.g. the ‘Knights Templar’) and Fraternal Secret Societies (e.g. the ‘Freemasons’). - Although, Sicilian 'cults of thieves' did not have formal names, their adherents became commonly-referred to as ‘Mafiosi’ (those who boast and swagger), whilst the gangs were known as ‘Mafia.'
‘Mafia’ were ruled by a 'Don' ('Father'). These patriarchal positions and the territories they exploited, were passed on within gangs, but they weren't necessarily hereditary. The essentially-identical, secret rituals and structure of 'Mafia,' were never to be written down or passed to the uninitiated.
Mafiosi' occupied well-defined, military-style ranks in the pyramid of obedience. Although not necessarily related by blood, new recruits (who were often obliged to commit a ritual murder as an act of initiation) swore an oath of 'Family' loyalty. This also obliged them, on pain of death, to respect a strict code of silence, ‘Omerta’ or 'Manhood' (i.e. 'Mafiosi' had to behave like men and settle their own problems). Consequently, if questioned, ‘Mafiosi’ systematically denied not only their own involvement, but also the ‘Mafia’s’ existence. Indeed, once initiated into even the lowest level of secrecy and obedience in a ‘Mafia Family,’ there was no real exit other than death.
During the second half of the 19th century, mass-immigration brought single-ethnic gangs to American cities, particularly New York. One of the earliest Italian cultic gangs to become notorious in the USA was known as ‘A Manu Niura’ ('The Black Hand'). Its leaders specialized in extortion - sending out letters (sometimes printed with a black hand) graphically threatening assassination, kidnapping, arson, mutilation, etc., if demands for money weren’t met. http://en.wikipedia.org/wiki/Black_Hand_(extortion). Immigrants with family-members remaining in Italy, were particularly vulnerable to this type of crime. - Soon, within the densely-populated Italian enclaves, ‘Mafiosi’ were employing all their familiar, brutal tactics to establish the widespread belief that if you didn't keep paying them for salvation, you were doomed. The sustainable racket euphemistically-known as ‘sellingprotection/insurance,’ remained the base activity, but other crimes included trafficking in illegal immigrants.
-‘Mafia' usually hid behind a front of a banal, Italian, family-owned, commercialenterprises. However,internally they were classic totalitarian dictatorships in microcosm - centrally-controlled and requiring of their adherents an absolute subservience to the group and its patriarchal leadership above all other persons. It didn't take the bosses long to discover that the more, counterfeit 'commercial' fronts they created, and/or subverted, in the USA: the more difficult it became for inexperienced, non-Italian, law enforcement agents to fathom what was lurking behind them.
- Typical ‘Mafia’ victims were non-English-speaking immigrants who already didn't trust the authorities, and who were far too scared to complain to law enforcement agencies. The few who did, were subjected to terrifying intimidation and they generally withdrew their complaints before any trial. Those who refused to bow down to the ‘Mafia,’ were invariably assassinated along with their family members (sometimes years afterwards).
Prior to 1919 (and the prohibition of the sale alcohol by a short-sighted federal law that was effectively-unenforceable), the problem of single ethnic gangs was largely-confined to their respective communities in cosmopolitan American cities. The authorities apparently never considered that, one day, they might pose a serious threat to democracy and the rule of law in the USA. As we all now know, during the 1920s, bootlegging enabled the most-ruthless gang leaders (not just Italians) to expand their activities and illegally acquire absolute control over capital sums which made them infinitely more powerful than State or federal law enforcement agencies. Cities like Chicago, became totalitarian enclaves within the republic - completely controlled by a handful of fabulously wealthy racketeers who had corrupted, and/or intimidated, and/or blackmailed, and/or assassinated, a remarkable number of political figures, judges, senior law enforcement agents, attorneys, public officials, journalists, editors, etc. In effect, during the period 1919-1933, US federal legislators handed one of the nation’s most profitable industries and sources of tax revenue, into the hands of criminal psychopaths. By the time reality was faced, the damage had already been done; major organized crime was well and truly established in the USA.
By the 1930s, what the press called, a ‘National Crime Syndicate,’ had evolved. The various ethnic gang bosses of NYC and New Jersey began to co-operate - Italian, German, Irish and Jewish.
Eventually, the entire USA was secretly sectioned off into geographically-defined enclaves exploited by 26 gangs. Although a system of internal dispute resolution was introduced, during certain periods, bosses formed alliances with, and fought internecine wars against, other gangs in order to expand and protect their respective interests.
- Italian racketeers,proved the most adaptable when prohibition ended, turning to: unlicensed gambling/bookmaking; prostitution; theft; fraud; blackmail; kidnapping; counterfeiting; usury (loan-sharking); drug dealing; etc. They followed their age-old esoteric tactics and hid behind ever more-mystifying labyrinths of corporate structures pursuing unlawful, and/or lawful enterprises. These were maliciously created in order to prevent, and/or divert, investigation and isolate the final beneficiaries from liability. The corporate officers of individual 'Mafia' front-groups were usually non-initiates chosen for their innocent appearance (wives, young relatives, etc.), and ignorance of how the 'Mafia' functioned. Consequently, if they were questioned, arrested or taken to court, they knew nothing that might endanger the bosses or the wider-operation.
- Until the late 1950s, as far as most US law enforcement agencies were concerned, the ‘Mafia' bosses had maintained almost an absolute monopoly of information about their grandiose criminal objectives. In 1957, this monopoly was first publicly challenged (in respect of the 'Mafia's' corruption of trade union officials) by a Senate Committee chaired by John Little McClellan, supported by some attorneys within the US Dept. of Justice. http://en.wikipedia.org/wiki/US_Senate_Select_Committee_on_Improper_Activities_in_Labor_or_Management_Field . - The 'Mafia' bosses were still able to sustain their wider activities by the enforcement of existing, arbitrary contracts and codes (secrecy, denunciation, confession, justice, punishment, etc.) within their ‘Families,’ and by their use of intimidation, and/or the infiltration of traditional culture, and/or corruption, and/or intelligence gathering, and/or blackmail, and/or extortion, and/or violence, and/or assassination, etc. to repress any internal or external dissent. - Although the Italian American 'Mafia' was positively identified as a real phenomenon (referred to by its initiates as, 'Cosa Nostra' or 'Our Thing'), and various isolated 'Mafiosi, and their corrupt contacts, were imprisoned during the 1960s for individual crimes, the organization remained effectively above the law. In reality, what its bosses were doing (i.e. running an axis of secretive, and abusive, totalitarian States in microcosm, within a democracy), was, by its very nature, designed to keep them beyond the reach of the law. The above, was essentially the catastrophic situation that faced US federal legislators at the end of the 1960s. In reality, the law they enacted in 1970, sought to combat a form of pernicious cultism, or occult totalitarianism, but without listing the universal identifying characteristics of the underlying phenomenon. However, RICO is an important piece of legislation in that it officially recognized (after decades of official denial) that dissimulated, subversive/criminogenic organizations exist which have been maliciously constructed to deceive all but the most-intellectually-rigorous of investigators, and that their activities cannot be fully understood in isolation, because they form part of an overall pattern. In the end, RICO should probably be judged by the facts that that 24 'Mafia Families' are still known to survive, whilst major organized crime has become an ongoing global problem.
Theoretically, under RICO, in the USA an individual who is a member of any enterprise that has committed any two of 35 crimes (27 federal and 8 State) within a period of 10 years can be charged with ‘racketeering.’ The penalty for this crime is a fine of $250 thousands, and/or upto 20 years in prison, per racketeering count. In addition the convicted racketeer must forfeit all benefits, and any interest on these benefits, derived from a pattern of racketeering activity. RICO also allows for a private individual victimized by the actions of a criminal organization to file a civil suit against the racketeers, and, if successful, claim triple damages. Furthermore, when an individual is indicted under RICO, the US Attorney has the option of seeking a pre-trial restraining order or injunction to seize the defendant’s assets and, thus, block the transfer of illegally acquired-property which might be forfeited in the future.
During the 1990s, the author of RICO, Prof. G. Robert Blakey, was retained by attorneys acting for the 'Proctor and Gamble' company to offer his expert opinion of the 'Amway Corporation.' The result was, what has become known as, 'The Blakey Report.' At one time, I exchanged e-mails with G. Robert Blakey. For obvious reasons, he was not at all helpful and he advised me that, if I published any part of his report, he would be obliged to take legal action against me; apparently, on the grounds that his report was subject to a legal settlement in which Proctor and Gamble's attorneys agreed that his opinion of 'Amway' had been confidential and would be kept confidential. Strangely, Prof. Blakey also informed me that his once-confidential report had, in fact, been stolen from his office by an assistant, and posted on the Internet without his permission. When you read it, it's not difficult to see why the bosses of 'Amway' didn't want the wider-world to know what the author of the RICO Act thought of their hidden activities. Ironically, when the wider-evidence is examined, 'Amway's' attorneys' failed-attempts to suppress this key-information clearly form part of an overall pattern of ongoing, major racketeering activity (as defined by the Racketeer Influenced and Corrupt Organizations Act, 1970, and clarified by subsequent US Supreme Court judgements). Prof. Blakey opened his report, by stating:
'It is my opinion that the Amway business is run in a manner that is parallel to that of major organized crime groups, in particular the Mafia. The structure and function of major organized crime groups, generally consisting of associated enterprises engaging in patterns of legal and illegal activity, was the prototype forming the basis for federal and state racketeering legislation that I have been involved in drafting. The same structure and function, with associated enterprises engaging in patterns of legal and illegal activity, is found in the Amway business.' http://www.amquix.info/pdfs/Blakely_expert_report.pdf
It is my opinion that G. Robert Blakey (who apparently was only given access to a very limited amount of evidence about the 'Amway' mob), began to identify (in his particular terminology) one section of a wider criminogenic phenomenon which I have described as representing (due to its unchecked, multi-billion dollar growth and extensive infiltration of traditional culture) perhaps the greatest threat to the rule of law, of any latter-day form of pernicious cultism. Sadly, various essentially-identical 'MLM' gangs of cultic racketeers, now form a powerful global syndicate of organized crime, the existence of which is still largely-unthinkable to casual observers (including, legislators, law enforcement agents, judges and journalists).
David Brear (copyright 2023) _______________________________________________________________________________________ The following is taken from 'Black's Law Dictionary,' page 1286 (8th ed. 2005). In 1970, the RICO Act was passed with the purpose of attacking organized criminal activity and preserving marketplace integrity by investigating, controlling, and prosecuting persons who participate or conspire to participate in racketeering. Racketeering has two pertinent definitions. First, racketeering may be “a system of organized crime traditionally involving the extortion of money from businesses by intimidation, violence, or other illegal methods." Id. Additionally, 18 U.S.C. §§ 1961 et seq., defines racketeering as a "pattern of illegal activity (such as bribery, extortion, fraud, and murder) carried out as part of an enterprise (such as a crime syndicate) that is owned or controlled by those engaged in the illegal activity." Id. at 1287; see also 18 U.S.C. § 1961(1) (2005). This second definition has expanded the legal conception of racketeering to contain additional crimes, including the collection of illicit gambling debts, securities fraud, and mail fraud. Id. The RICO Act is open to broad interpretation, so it may be employed in a manner unintended by Congress. In one case, the U.S. Attorney stated that a perpetrator who attacked an abortion clinic could be charged under the RICO statutes if he acted as part of an organization. Joseph Berger, Prosecutors to Present Clinic Doctor's Slaying to Grand Jury,N.Y. TIMES (Apr. 20, 1999) at B5. Commenting on a civil lawsuit brought against an anti-abortion group, one Florida Representative said, "It was never the intention that the law be used against advocacy groups." SeeClinic bomb victim speaks against bill to curb RICO, FORT WORTH STAR-TELEGRAM Jul 18, 1998 at 7. The RICO statutes can be applied in both criminal and civil cases, for a plaintiff can file a suit against a defendant for treble damages. id. at 1286. Consequently, both prosecutors and plaintiffs have reason to claim that many actions are punishable under the RICO statutes.
The Crime
18 U.S.C. § 1962 (2005). Under this section, there are three different crimes that can be committed, plus an additional conspiracy provision. Under section 1962(a), it is a crime for any person who has received any income derived from a pattern of racketeering activity or through collection of an unlawful debt in which such person has participated as a principal, to
use or invest, directly or indirectly, any part of such income, or the proceeds of such income,
in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce. 18 U.S.C. § 1961(a).
Under section 1962(b), it is a crime for a person, through a pattern of racketeering activity or through collection of an unlawful debt,
to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce. Id. § 1962(b)
Under section 1962(c), it is a crime for a person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to
conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt. Id. § 1962(c)
Under section 1962(d), it is a crime for any person to conspire to violate any of the provisions of section 1962. Id. § 1962(d). Exception Section 1962(a) generally does not apply to a purchase of securities on the open market for purposes of investment, and without the intention of controlling or participating in the control of the issuer, if the securities of the issuer held do not amount in the aggregate to one percent of the outstanding securities of any one class, and do not confer, either in law or in fact, the power to elect one or more directors of the issuer.) 18 U.S.C. § 1962(a).
The Punishment
18 U.S.C. § 1963 (2005). A violation of section 1962 can be punished by
a fine,
imprisonment for not more than 20 years, or
both. 18 U.S.C. § 1963(a).
If the violation is based on a racketeering activity for which the maximum penalty includes life imprisonment, then the violation can be punished by
a fine,
imprisonment for up to life, or
both. Id.
Furthermore, the violation will result in the forfeiture to the United States of
any interest the person has acquired or maintained in violation of section 1962. 18 U.S.C. § 1963(a)(1).
any-
interest in any enterprise which the person has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962; id. § 1963(a)(2)(A);
security of any enterprise which the person has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962; id. § 1963(a)(2)(B);
claim against any enterprise which the person has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962; id. § 1963(a)(2)(C); or
property or contractual right of any kind affording a source of influence over any enterprise which the person has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962; id. § 1963(a)(2)(D); and
any property constituting, or derived from, any proceeds which the person obtained, directly or indirectly, from racketeering activity or unlawful debt collection in violation of section 1962. 18 U.S.C. § 1963(a)(3)
Furthermore, in lieu of a fine otherwise authorized by this section, a defendant who derives profits or other proceeds from an offense may be fined not more than twice the gross profits or other proceeds. 18 U.S.C. § 1963(a). The remaining provisions of section 1963 concern forfeiture procedures.
Definitions
18 U.S.C. § 1961 (2005). Section 1961 contains a long list of definitions of what constitutes racketeering. As used in the RICO statutes,
"racketeering activity" means
any act or threat involving
murder,
kidnapping,
gambling,
arson,
robbery,
bribery,
extortion,
dealing in obscene matter, or
dealing in a controlled substance or listed chemical,
which is chargeable under State law and punishable by imprisonment for more than one year; 18 U.S.C. § 1961(1)(A).
any act which is indictable under any of the following provisions of title 18, United States Code:
Section 201 (relating to bribery),
section 224 (relating to sports bribery),
sections 471, 472, and 473 (relating to counterfeiting),
section 659 (relating to theft from interstate shipment) if the act indictable under section 659 is felonious,
section 664 (relating to embezzlement from pension and welfare funds),
sections 891-894 (relating to extortionate credit transactions),
section 1028 (relating to fraud and related activity in connection with identification documents),
section 1029 (relating to fraud and related activity in connection with access devices),
section 1084 (relating to the transmission of gambling information),
section 1341 (relating to mail fraud),
section 1343 (relating to wire fraud),
section 1344 (relating to financial institution fraud),
section 1425 (relating to the procurement of citizenship or nationalization unlawfully),
section 1426 (relating to the reproduction of naturalization or citizenship papers),
section 1427 (relating to the sale of naturalization or citizenship papers),
sections 1461-1465 (relating to obscene matter),
section 1503 (relating to obstruction of justice),
section 1510 (relating to obstruction of criminal investigations),
section 1511 (relating to the obstruction of State or local law enforcement),
section 1512 (relating to tampering with a witness, victim, or an informant),
section 1513 (relating to retaliating against a witness, victim, or an informant),
section 1542 (relating to false statement in application and use of passport),
section 1543 (relating to forgery or false use of passport),
section 1544 (relating to misuse of passport),
section 1546 (relating to fraud and misuse of visas, permits, and other documents),
sections 1581-1591 (relating to peonage, slavery, and trafficking in persons),
section 1951 (relating to interference with commerce, robbery, or extortion),
section 1952 (relating to racketeering),
section 1953 (relating to interstate transportation of wagering paraphernalia),
section 1954 (relating to unlawful welfare fund payments),
section 1955 (relating to the prohibition of illegal gambling businesses),
section 1956 (relating to the laundering of monetary instruments),
section 1957 (relating to engaging in monetary transactions in property derived from specified unlawful activity),
section 1958 (relating to use of interstate commerce facilities in the commission of murder-for-hire),
sections 2251, 2251A, 2252, and 2260 (relating to sexual exploitation of children),
sections 2312 and 2313 (relating to interstate transportation of stolen motor vehicles),
sections 2314 and 2315 (relating to interstate transportation of stolen property),
section 2318 (relating to trafficking in counterfeit labels for phonorecords, computer programs or computer program documentation or packaging and copies of motion pictures or other audiovisual works),
section 2319 (relating to criminal infringement of a copyright),
section 2319A (relating to unauthorized fixation of and trafficking in sound recordings and music videos of live musical performances),
section 2320 (relating to trafficking in goods or services bearing counterfeit marks),
section 2321 (relating to trafficking in certain motor vehicles or motor vehicle parts),
sections 2341-2346 (relating to trafficking in contraband cigarettes),
sections 2421-2424 (relating to white slave traffic),
sections 175-178 (relating to biological weapons),
sections 229-229F (relating to chemical weapons),
section 831 (relating to nuclear materials). Id. § 1961(1)(B).
an act which is indictable under title 29 U.S.C. § 186 (dealing with restrictions on payments and loans to labor organizations) or 18 U.S.C. § 501(c) (relating to embezzlement from union funds). Id. § 1961(1)(C).
any offense involving fraud connected with
a case under title 11 (except a case under 18 U.S.C. § 157),
fraud in the sale of securities, or
the felonious manufacture, importation, receiving, concealment, buying, selling, or otherwise dealing in a controlled substance or listed chemical, punishable under any law of the United States. Id. § 1961(1)(D).
any act which is indictable under the Currency and Foreign Transactions Reporting Act. Id. § 1961(1)(E)
any act which is indictable under the Immigration and Nationality Act,
8 U.S.C. § 1324 (relating to bringing in and harboring certain aliens),
8 U.S.C. § 1327 (relating to aiding or assisting certain aliens to enter the United States),
8 U.S.C. § 1328 (relating to importation of alien for immoral purpose)
if the act indictable under such section of such Act was committed for the purpose of financial gain. Id. § 1961(1)(F).
any act that is indictable under any provision listed in 18 U.S.C. § 2332b(g)(5)(B). Id. § 1961(1)(G)
"enterprise" includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity. 18 U.S.C. § 1961(4).
"pattern of racketeering activity" requires at least two acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within ten years (excluding any period of imprisonment) after the commission of a prior act of racketeering activity. 18 U.S.C. § 1961(5).
"unlawful debt" means a debt
incurred or contracted in gambling activity which was in violation of the law of the United States, a State or political subdivision thereof, or which is unenforceable under State or Federal law in whole or in part as to principal or interest because of the laws relating to usury, 18 U.S.C. § 1961(6)(A) and
which was incurred in connection with the business of gambling in violation of the law of the United States, a State or political subdivision thereof, or the business of lending money or a thing of value at a rate usurious under State or Federal law, where the usurious rate is at least twice the enforceable rate. Id. § 1961(6)(B).
"racketeering investigator" means any attorney or investigator so designated by the Attorney General and charged with the duty of enforcing or carrying into effect this chapter. 18 U.S.C. § 1961(7).
"racketeering investigation" means any inquiry conducted by any racketeering investigator for the purpose of ascertaining whether any person has been involved in any violation of this chapter or of any final order, judgment, or decree of any court of the United States, duly entered in any case or proceeding arising under this chapter [18 USCS §§ 1961 et seq.]. 18 U.S.C. § 1961(8).
Case Law Interpreting the RICO Act
As can be clearly seen from section 1961, the list of affiliated activities is quite large and many organizations and individuals can easily find themselves subject to the stiff penalties and sanctions afforded under RICO. As a preliminary matter, it should be noted that, while the Act refers to "Criminal Organizations," membership in organized crime is not a necessary element of a RICO conviction. United States v. Uni Oil, Inc. 646 F.2d 946, 953 (5th Cir. 1981). In order to secure a conviction under the RICO Act, the government must prove both the existence of an "enterprise," and a connected "pattern of racketeering activity." United States v. Turkette, 452 U.S. 576, 583 (1981). An enterprise is an entity, and it can be proved by evidence of an ongoing organization, and by evidence that the carious associates function as a continuing unit. Id. The pattern of racketeering activity is a series of criminal acts, which can be proved by evidence of the requisite number of acts of racketeering committed by the participants in the enterprise. Id. Proof of one, however, does not necessarily prove the other. Id. Furthermore. Racketeering enterprises or racketeering predicate acts do not need to be accompanied by an underlying economic motive. NOW v. Scheidler, 510 U.S. 249, 259, 261 (1994). To clarify how each of the three subsections of section 1962 operate, the case Kehr Packages v. Fidelcor, Inc., 926 F.2d 1406 (3rd Cir. 1991) is informative. Under section 1962(a), the plaintiff (or government) must allege an injury specifically from the use or investment of income in the named enterprise; under section 1962(b) the plaintiff (or government) must allege a specific nexus between control of a named enterprise and the alleged racketeering activity; and while section 1962(c) is not subject to these nexus limitations, cases brought under section 1962(c) cannot allege that an entity is both an enterprise and a defendant. Kehr at 1411. In establishing a pattern of racketeering activity, the prosecutor must show that racketeering predicates are related and that they amount to or pose a threat of continued criminal activity. H.J., Inc. v. Northwestern Bell Tel, Co. 492 U.S. 229, 240 (1989). This may be done in a variety of ways. Id. at 241. "A party alleging a RICO violation may demonstrate continuity over a closed period by proving a series of related predicates extending over a substantial period of time. Predicate acts extending over a few week or months and threatening no future criminal conduct do not satisfy this requirement." Id. at 242. Congress, apparently, "was concerned in RICO with longterm criminal conduct." Id. If continuity cannot be established by showing longterm activity, "liability depends on whether the threat of continuity is demonstrated." Id. (emph. in original). Because "threat of continuity" depends on the specific facts of each case, it can be sufficiently established "where the predicates can be attributed to a defendant operating as part of a long-term association that exists for criminal purposes." Id. at 242-43. The continuity requirement can also be satisfied by showing "that the predicates are a regular way of conducting defendant's ongoing legitimate business (in the sense that it is not a business that exists for criminal purposes), or of conducting or participating in an ongoing and legitimate RICO 'enterprise.'" Id. at 243. Defining an "enterprise" is therefore important. An enterprise can technically exist with only one actor to conduct it, even though it will, in most situations, be conducted by more than one person or entity. Salinas v. United States, 522 U.S. 52, 65 (1997) (dicta). The existence of a RICO enterprise is shown where
there is an ongoing organization with a decision-making framework for controlling a group that remains unchanged over time
various associates function as continuing unit, and
enterprise is separate and apart from the pattern of racketeering activity. United States v. Sanders, 928 F.2d 940, 943 (10th Cir. 1991).
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 fictionin an insightful'fairy story' entitled, 'Animal Farm.'Herevealed that totalitarianism is merely the oppressors'fiction mistaken for factby 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 existencecan 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 followedOrwell'sexample, and did some serious thinking, this is the reality-inverting nightmare they would find.
For more than 70 years, successive grinning generations of two Dutch-American families (DeVos and Van Andel) have got away with building'Amway'- a labyrinth of legally-registered corporate structures, pursuing lawful, and/or unlawful, enterprises. They have used these private companies to peddle a pernicious totalitarian fairy story entitled,'Multi-Level Marketing,’ which they, and their propagandists, have steadfastly pretended to have brought great benefit to humanity.During this shameful period, these two clans of world-class liars have become fabulously wealthy, whilst tens of millions of ill-informed individuals around the globe have quietly-continued to be churned through a dissimulated rigged-market swindle (a.k.a. pyramid scheme) and related advance fee frauds. At the same time, many of these victims have had their minds hijacked by a perversion of the ‘positive (good) versus negative (evil)’Christian belief system. Although the unpaid proselytisers for this self-perpetuating crime-wave were given the illusion that they weremaking a free-choice,they were, in fact, subjected to co-ordinated, devious techniques of social, psychological and physical persuasion designed to facilitate the shutting down of their critical, and evaluative, faculties (without their fully-informed consent). In this way, a significant minority of chronic 'Amway' victims have been deceived into dissipating all their mental, physical and financial resources to the benefit of a sanctimonious little gang of self-proclaimed ‘compassionate Christian capitalists,’ whom they continued blindly to trust and followno matter what suffering this entailed.
Major organised crime groups were supposedly identified by US legislators as a cancer that had previously been allowed to gnaw its way into the heart of the republic when, in 1970, severe criminal penalties, and powerful civil remedies, were finally provided as a defence in the form of the US federal Racketeer Influenced and Corrupt Organizations Act. Yet US federal prosecutors have (so far) done nothing to prevent the bosses of 'Amway' (the original, blame-the-victim 'MLM'racket), and their associate criminal enterprises, from maintaining control over billions of stolen dollars. Indeed, certain, corrupt senior political figures and legally-qualified law enforcement agents have enthusiastically assisted in protecting the group’s kitsch front - obstructing full-exposure of the sinister cult that has lurked behind it. Tellingly, the beneficiaries of the 'Amway' racket have invested some of their ill-gotten gains to infiltrate traditional culture to a degree which makes even the most-notoriousMafia'Wise Guys'look like a bunch of amateurs.
In the following article, Robert FitzPatrick offers his thoughts on his recent visit to 'Amway World HQ' in Ada Michigan. Readers should bear in mind that this impressive edifice (indeed, the entire bedazzling game of Utopian make-believe of which it has been a key-element), has been paid for by the unpaid labour of tens of millions of ill-informed individuals who have continued to be churned through the ranks of 'Amway' adherents over a period spanning several decades. 'Amway World HQ' remains only part of a classic information monoply which the bosses of 'Amway' (just like the bosses of any centrally-controlled totalitarian regime) have always sought to maintain. Yet in the USA, 'a deliberate scheme to obtain financial or similar gain by using false statements, misrepresentations, concealment of important information, or deceptive conduct,' is known in law as: 'criminal fraud.'
by Robert L. FitzPatrick, Author of PONZINOMICS, the Untold Story of Multi-Level Marketing
July, 2023
From the outside or if you just drive by, the enormous facility in Ada Michigan would look like any large corporate center. There is a huge globe on display by the road and a row of national flags, signifying the worldwide reach of this company, whatever it is.
Windshield View of Amway World Headquarters
There is no other indicator of the nature of the company, its products, where they could be purchased or who buys them, whatever they are.
The company offers a “self-guided” tour to visitors that walks you through a short circular hallway toward the back of the lobby area. Everywhere else is closed to the public without appointment. The “tour” offers wall displays about products that Amway apparently sells. They appear to be the most ordinary of consumer goods that one sees in grocery, convenience, health food stores, malls, or online. But most people have never heard of or would remember the brand names of any Amway products, and no one has ever seen them in a retail store of any kind.
Have you heard of “Glister” brand toothbrushes? They are highlighted on the Amway tour. A package of four of the Amway/Glister toothbrushes sells for $12.50 or $3.13 each. They look like any toothbrush. Are they special or different? The Amway website states, “Soft and medium bristles help remove plaque even between teeth, and gently massage gums. Flexible neck eases pressure on teeth and gums. Reach hard-to-brush areas with tapered head.” Yes, that’s pretty much what toothbrushes do.
A quick search on Amazon.com turns up a package of six Colgate branded toothbrushes with the typical traits of toothbrushes. It sells for $4.44, or $.74 a brush. Amway’s toothbrush cost four times (400%) more!
Okay, how about the “Atmosphere Sky” home air purifier. Heard of it? It’s the one Amway sells – for $1,590.
Shopping on Amazon, it’s hard to find an air purifier anywhere nearly this expensive. For New Yorkers in one of the most densely populated cities in America and recently suffering from thick smoke of Canadian forest fires, New York Timesrecently tested 50 different air purifiers and recommended one that sells for under $200.
So, questions normally arise: how do Amway’s extremely high priced commodities get sold? Where? In today’s hyper-competitive, globally-sourced market, why would anyone buy these unknown products over so many other well-known brands in stores and online and pay these exorbitant prices?
The largest section of the display highlights vitamin pills branded “Nutrilite”, which, despite not being sold in stores, the display claims are the most “popular” of all vitamin brands in the world – without explaining how this could be. A bottle of 60 capsules of Nutrilite Vitamin C, 500 mg., time-released sells for $20 or $.33 a pill. Taking Amway Vitamin C daily costs $120 a year. Amazon.com offers the well known and respected Nature’s Bounty Vitamin C, same mg. and time-released for $.07 a pill, $25 a year. Amway’s cost nearly 5 times (500%) more!
Perplexing Questions, No Clues, Paranoid or Real?
These product and sales questions lead to the most perplexing question of all: how could such an enormous facility exist that produces and sells ordinary products that few people have ever heard of, can’t be found in any store, and are uncompetitively priced?
The displays offer no clues to these questions. Billions are claimed in sales with no mention of retail outlets, prices, marketing strategies or product differentiation. To anyone in marketing, sales or distribution, Amway would be an economic mystery. Taking the self-guided tour would undo everything learned.
Without any background on what Amway is and with so little substantive information offered, one could even be forgiven for suspecting the entire presentation and the large buildings on the “campus” are fake, maybe an elaborate front for a giant money laundering scheme, like Madoff’s “hedge fund” operations that never did stock trades and issued fake quarterly reports.
That would not be paranoia. It is precisely what Amway is being accused of now by federal regulators in India that sued Amway. The products, the suit claims, serve as a mechanism for laundering money obtained in a giant Ponzi scheme, and all its “profits” and “commissions” are therefore illegal. Essentially, the same charges were brought against the company in the United States by the FTC in 1975 and have been brought by “distributors” in civil lawsuits.
But, if you don’t know what Amway is, that shocking information would also be unknown. So, back to the perplexing “self-guided” tour…
Founders, Famous for What?
Besides the incredibly high priced but utterly ordinary products, there is another prominent presence in the lobby and on the tour. Two men, both deceased, heralded as the founders of Amway, are depicted in life-size photos and cardboard cutouts like legendary historical figures. The lobby is almost a museum dedicated to their work, whatever it was. But, if you don’t know what Amway is, you will likely never have heard of them, any more than you would the brands of the products on display. Strangely, Amway’s current company leaders are not referenced at all.
Why would these two departed people be so exalted for a business selling such ordinary commodity products? Apparently, they did not invent anything, no breakthrough technology, no innovation that changed how we live or shop. They are not a Steve Jobs, Thomas Edison or even Bill Gates. If what they did is historically or economically significant, why does the tour not explain plainly what the company is and what it does?
Facts and Figures
The economic mysteries that the Amway tour raises are answered once some basic facts and figures about the company are discovered. As an author and researcher of “multi-level marketing” and having been contacted by countless Amway distributors over a 20-year span, and having served as expert in court cases against Amway, I am all too familiar with these facts.
I know that 99.9% of all people, all over the world who have ever invested in the Amway “business” from when it started to today, never gained a net profit. Few remain active in the business more than a year or two. I know that Amway’s “compensation” plan sends most payments, per transaction, to the top 1-5%, dooming all others. I know the Amway pay plan and business model, based on “endless chain” recruiting, and some of its products were copied directly from the previous employer of the Amway founders, called “Nutrilite”. Amway’s future founders worked there for a decade before starting a directly competitive company and taking 5,000 of Nutrilite’s distributors. Later, they acquired what was left of Nutrilite.
I know Amway settled charges and paid the largest fine to date in a criminal tax evasion case in Canada and that Amway is being sued now by regulators in India for running a multi-billion dollar Ponzi and money laundering scheme. I’ve read all the books by former Amway recruits that dramatically detail cult accusations. I have been contacted by many former Amway “distributors” who told me of their ruined families, divorces, foreclosure and bankruptcies that they say stem from being Amway “direct sellers.”
I’ve researched the history of Amway and how it turned its pyramid recruiting model, promising “unlimited income” and “infinite expansion” into a religious crusade, branding those who criticize or quit the company as “pathetic losers.” I know Amway has sued critics. I learned how Amway’s political connections in Michigan were used when the congressman of their home district became president, just when Amway was being federally prosecuted as a pyramid fraud.
As for the marketing mysteries, Amway’s products, it turns out, are mostly sold only to the contract salespeople. Some of them may convince a few family and friends to buy them for a little while. Most never sell any goods to anyone. The company is supposedly based on millions of people gaining profits from retail selling, but I have never encountered anyone who claimed sustainable profits from “direct selling” of Amway goods.
Factoring lack of consumer interest or need for personal salespeople, the tiny retail profit margin offered to Amway “resellers”, the high prices of the commodities, the lack of product differentiation, the unlimited increase of “sales” people in every area, driven by the hyped-up, recruiting-based income promises and causing excess competition, it is clear that profitable and sustainable “direct selling” of Amway goods is an economic impossibility.
Mystery Customers
Nevertheless, it is indisputable and fully documented that all Amway recruits – tens of millions of people worldwide – buy Amway products, at least for the little while they are under contract. This fundamental piece of information – that the “salespeople” are the primary “customers” – answers the question of why there is no advertising. There are, effectively, no sustainable retail customers, no stable customer base, to advertise to. Salespeople are under contract to Amway as “distributors.” No company needs to advertise to their distributors.
But if nearly all the “distributors” don’t sell and gain no net profit from the Amway “business,” why do they buy, if only for a little while? Why would they pay so much more for Amway’s commodity toothbrushes, vitamin C and air purifiers? Why wouldn’t they just go to stores or shop online like everyone else and enjoy greater choice, much lower prices and more convenience? Without advertising, how do they even find out about these unknown Amway products?
Of course, I know the answer to these questions too, but only after much research and plowing through mountains of disinformation and overcoming my own bewilderment that what I saw could be true.
For those solicited by Amway recruiters and who want to understand what Amway is or anyone who ponders the mysteries raised in the self-guided tour, the questions about the “business” always lead to another set of mysteries. The new questions are not about economics and marketing. Rather, how is it possible that millions of people are induced not only to pay to become “direct sellers” of products that are virtually unsellable on a profitable basis, but to personally buy them.
Dark Corners, Disbelief, Extreme Irony
That deeper inquiry leads inevitably into areas of criminal law and the corruption and negligence of law enforcement regarding pyramid scheme frauds. It pulls the inquirer into Amway’s origins, its true history, prosecutions, lawsuits, promises of wealth and happiness, and shocking statistics on consumer losses and personal tragedies related to the “business.” It leads into the dark corners of undue influence, Big Lie deception, intimidation, shaming and brainwashing.
The inquiry into the fates and motives of Amway’s “direct sellers”, its main “customers,” takes one into the depths of extreme irony, disbelief, and confusion. Little wonder the “tour” seeks to distract the visitor with toothbrushes and vitamin pills and strangely offers so little about the substance of the company.
To know of Amway’s cult control leading to the separation of many Amway followers from family and life-long friends and their very own identities, and to be aware of the pain and despair of the millions of Amway “losers”, one must stand and ponder in utter amazement the words displayed over the founders’ images in the lobby: Freedom, Family, Hope, and Reward.
