FTC Chairwoman, Edith Ramirez, blocks 'Herbalife' questions.

Behind all their bedazzling camouflage and mystifying mathematical presentations, the universal identifying characteristic of Ponzi schemes, pyramid frauds, money circulation games, chain-letter scams, etc., is that they have no significant, or sustainable, source of revenue other than their own participants. Thus, about 15 years ago, I coined the common-sense phrase: 'premeditated, or dissimulated, closed-market swindle,' in order to provide a definitive, generic label for all Ponzi schemes, pyramid frauds, money circulation games, chain-letter scams, etc.

Although a few commentators have used my term (sometimes without attribution), a 'closed-market swindle' is not yet defined in law. That said, it is universally accepted that lying to, or withholding key-information from, people in order to take their money, is fraud which is a form of theft. Common-sense also reveals that, by 'passing any law, but failing to enforce it, has the effect of authorizing the very crime which you are trying to prohibit.' 

The lie which is fundamental to all 'closed-market swindles' is that people can earn financial reward by first contributing their own money to participate in an (alleged) 'profitable commercial opportunity' which is secretly an economically-unviable fake, due to the fact that the (alleged) 'profitable commercial opportunity' has been rigged so that it generates no significant, or sustainable, revenue other than that deriving from its own participants.

For more than 50 years, 'MLM income opportunity' racketeers have been allowed to hide in plain sight, dissimulating some of the most-extensive closed-market swindles of all time, by offering endless-chains of victims (arbitrarily, and falsely, defined as 'Distributors, Independent Business Owners,' etc.) various banal, but effectively-valueless commodities, and/or services, in exchange for unlawful losing-investment payments (based on the false-expectation of future reward), but laundered as 'sales' (based on value and demand to 'customers and end-users'). However, since no gang of 'MLM' racketeers has ever proved that 'MLM' wampum has actually been regularly re-sold to the general public for profit in significant quantities, tens of millions of 'MLM' participants have, in fact, been peddled infinite shares of their own finite money.

The classic 'MLM' inversion of reality.

Whilst looking at the following article, readers are invited to bear in mind that, currently, there are approximately 1000 essentially identical 'MLM Income Opportunity' rackets which have been allowed to hide in plain sight (as labyrinths of legally-registered corporate structures) in the USA. Amazingly, no agency of the US federal government has ever uncovered the universally-insolvent results of 'MLM' participation which might have enabled regulators to reverse-engineer how this type of blame-the-victim, organized fraud has functioned. Consequently, American legislators have never introduced any common-sense law accurately-defining economically-viable direct selling, in which the sponsors of all so-called 'Multi-Level Marketing direct selling schemes' would be required to produce independent quantifiable evidence proving that the overwhelming majority of their declared 'direct sales' have always been authentic retail transactions (based on value and demand) to members of the general public.



Following the publication last week of Edith Ramirez' response to Senator Ed. Markey's concerns about 'Herbalife,' a reader has asked me what I would like to say to the latest (temporary) FTC Chair, if I was given the opportunity to meet with her face to face?

One of the many questions which I have tried (unsuccessfully) to put to senior FTC officials in the past, is:

Has it never crossed your minds that the failure of your agency to recognize how the instigators of the biggest 'MLM income opportunity' frauds have silenced the overwhelming majority of their victims, by convincing them that the concept of 'MLM income opportunities' is economically-viable and has already been thoroughly investigated and approved by the FTC, has made your agency a significant part of this problem and not the solution to it?

For those readers who have not read Ms. Ramirez' letter, a copy can be found by clicking on this link http://www.markey.senate.gov/imo/media/doc/2014-02-27_FTC_re_Herbalife_Markey.pdf

'Dear Senator Markey ... the FTC also takes seriously the harm illegal pyramid schemes have on consumers and has used its authority under section 5 of the FTC Act in appropriate cases. For example, since 1996, the FTC has brought 15 cases alleging that purportedly legitimate multi level marketing companies were, in fact, pyramid schemes in masquerade.' Most recently last year the FTC filed a case against Fortune Hi-Tech marketing and related entities. The FTC, amongst other things, alleged that the defendants operated an illegal pyramid scheme and falsely claimed consumers would earn extra money for selling various products and services. In reality, the FTC charged that nearly all consumers who signed up with the scheme lost more money than they ever made. The FTC further alleged that to the extent that consumers could make any income, it was mainly for recruiting other consumers.

Sincerely 

Edith Ramirez

Chairwoman (FTC)

February 27th 2014 

Judging by the content of her recent letter to Senator Markey, evidently no one at the FTC has yet dared to inform Ms. Ramirez (who is a history graduate as well as a qualified attorney) that, ignoring the insignificant minority of grinning shills, the hidden overall-loss/churn rate for so-called 'MLM Income Opportunities' (large and small) has always been effectively 100%. Indeed, according to 'Herbalife's' own declared numbers of 'distributors' and annual drop-out rates, approximately two millions ill-informed people per year are currently being churned through the 'Herbalife MLM Income Opportunity' racket (alone) around the world, but (to date) few victims have dared to complain and demand their money back, mainly because billions of dollars of unlawful losing investment payments (made on the false expectation of future reward) have been allowed to be laundered as 'lawful sales to customers and end users' (based on value and demand), and effectively-unsaleable pseudo-scientific wampum has been given in return, but also because victims have been tricked into believing that the 'Herbalife Income Opportunity' has been examined and approved by governments around the world, that only wimps and sore losers complain and that failure to make money is, therefore, always entirely the fault of individuals who quit 'Herbalife': never that of the 'Herbalife MLM Income Opportunity' or its sponsors.

The above, Orwellian 'Herbalife' propaganda video (which employs covert hypnosis, ego-destruction, Neuro-Linguistic Programming, etc. and which Edith Ramirez will probably claim she's never seen) features various exemplary 'MLM' shills acting out a fictitious scenario of control as fact, in which they once were 'dirty' and 'miserable' little rats trapped on a treadmill in a form of Hell (i.e. the world of traditional employment), but after exactly duplicating a 'Proven Step-By-Step System,' they have achieved redemption as superhumans in the miraculous 'Herbalife' Utopia, where no one works, but everyone is healthy, wealthy, happy and free....

..... and also drives a Ferrari, and/or a Hummer, and/or a Bentley, and/or a Porsche!

Meanwhile, back in the adult world of reality, 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 sight, 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.).

Furthermore, no honest observer now seriously disputes that the most-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 and limitless financial freedom,' 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. 

David Brear (copyright 2014)