'ACN' - Federal Judge blocks the Trump clan's attempt to dodge an ongoing 'MLM' (fraud) lawsuit.

Even though the damning-evidence has been there for everyone (with fully-functioning critical faculties) to see, it is still not widely-recognised how Donald Trump first learnt how to perform before large live audiences of vulnerable persons who were being controlled, and exploited, by a pernicious Utopian fiction peddled as fact.

For around 10 years (2005-2015), Donald Trump, Donald Trump Jnr., Ivanka Trump and Eric Trump were paid promoters of the 'Amway' copy-cat blame the victim 'Multi-Level Marketing' cultic racket known as 'ACN' ('American Communications Network').

During this period, the enthusiastic endorsement of Donald Trump and his children, was undoubtedly the major factor that kept bedazzling 'ACN' victims - luring them into de facto servitude, dissociating them from external reality and not only facilitating the theft of their money, but also deceiving them into unconsciously acting the role of bait to lure other unwary persons (particularly their friends and family members) into the same trap. 

Today, the Trump clan are only being sued by victims in the USA, but the 'ACN' racket has operated (and continues to operate) all around the world, including in Russia.

That said, the 'ACN' racket is just one part of what remains a largely-unrecognised, global criminogenic phenomenon of historic significance.

David Brear (copyright 2021)

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Judge Tosses Trump Family’s Attempt to Hide Pyramid Scheme Lawsuit From Public (thedailybeast.com)

Trump, children cannot arbitrate marketing scam case -U.S. appeals court | Reuters

NEW YORK, July 28 (Reuters) - A federal appeals court said former U.S. President Donald Trump and his adult children cannot move into arbitration a fraud lawsuit accusing them of exploiting their family name to promote a marketing scam targeting the poor and working class.

The 2nd U.S. Circuit Court of Appeals in Manhattan said the plaintiffs' agreements to arbitrate claims against the multi-level marketing company American Communications Network did not extend to the Trumps, who had not signed those agreements.

Lawyers for the Trump family did not immediately respond to requests for comment on Wednesday's 3-0 decision.

Four plaintiffs in the proposed class action accused Trump, his children Donald Jr., Eric and Ivanka, and an affiliate of the Trump Organization of promoting ACN in exchange for millions of dollars in secret payments from 2005 to 2015.

The plaintiffs said Donald's Trump's endorsement, including on episodes of his TV show "The Celebrity Apprentice," conned them into thinking their investments would pay off.

ACN would charge $499 to clients to sell videophones and other goods, the plaintiffs alleged.

In Wednesday's decision, Circuit Judge Robert Sack said the lack of a "close relationship" between ACN and the Trumps meant the plaintiffs had no reason to believe they agreed to arbitrate with the Trumps.

He also said "there is no unfairness" in requiring the Trumps to litigate over alleged wrongful business practices, given the plaintiffs' claim they were defrauded into thinking Donald Trump told the truth by endorsing ACN.

The Trumps claimed they had no control over ACN, that Trump's endorsement was simply his opinion and that the civil lawsuit - one of many they face - was politically motivated.

Some defendants prefer arbitration to litigation because arbitration can cost less and remain confidential, and obtaining evidence can be more difficult.

Roberta Kaplan, a lawyer for the plaintiffs, said her clients were pleased, and looked forward to gathering more evidence and beginning depositions.

The decision upheld an April 2020 ruling by U.S. District Judge Lorna Schofield in Manhattan.

The case is Doe et al v Trump Corp et al, 2nd U.S. Circuit Court of Appeals, Nos. 20-1228, 20-1278.

Reuters copyright 2021

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 'Multi-Level Marketing' Warning.

The following deconstructed analysis has been formulated to sharpen the critical and evaluative faculties of all unwary persons approaching so-called 'Multi-Level Marketing' from the dangerous (subjective) point of view that it must be a business/industry, rather than from the safe (purely-objective) point of view that they don't really know what it is.
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More than half a century of quantifiable evidence proves beyond all reasonable doubt that:

• the widely-misunderstood phenomenon that has become popularly-known as 'Multi-Level Marketing' (a.k.a. 'Network Marketing') is nothing more than an absurd, non-rational,  cultic, economic pseudo-science maliciously-designed to lure unwary persons into de facto servitude, dissociate them from external reality and not only steal their money, but also deceive them into unconsciously acting the role of bait to lure other unwary persons (particularly their friends and family members) into the same trap. 

• the impressive-sounding made-up jargon term, 'MLM,' is therefore, the misleading title for an enticing structured-scenario of control which has been developed, and constantly acted out as  reality, by the instigators, and associates, of various copy-cat, major and minor, ongoing organised crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim 'Long Cons*'  - comprising self-perpetuating rigged-market swindles**, a.k.a. pyramid scams (dressed up as 'legitimate direct selling income opportunites') and related advance-fee frauds (dressed up as 'legitimate: training and motivation, self-betterment, programs, recruitment leads, lead generation systems,' etc.).

• Apart from an insignificant minority of shills (whose leading-role in the 'Long Con' has been to pretend that anyone can achieve financial freedom simply by following their unquestioning example and exactly-duplicating a step-by-step-plan of recruitment and self-consumption), the hidden overall net-loss/churn rate for participation in so-called 'MLM income opportunities,' has always been effectively 100%.

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*A 'Long Con' is a form of fraud maliciously designed to exploit victims' existing beliefs and instinctual desires and make them falsely-believe that they are exercising a completely free-choice. 'Long Cons' comprise an enticing structured-scenario of control acted out as reality over an extended period. Like theatrical plays, 'Long Cons' are written, directed and produced. They involve leading players and supporting players as well as props, sets, extras, costumes, script, etc. The hidden objective of 'Long Cons' is to convince unwary persons that fiction is fact and fact is fiction, progressively cutting them off from external reality. In this way, victims begin unconsciously to play along with the controlling-scenario and (in the false-expectation of future reward) large sums of money or valuables can be stolen from them. Classically, the victims of 'Long Cons' can become deluded to such an extent that they will abandon their education, jobs, careers, etc., empty their bank accounts, and/or beg, steal, borrow from friends, family members, etc.

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** The enticing structured-scenario of control fundamental to all 'rigged-market swindles' is that people can earn income by first contributing their own money to participate in a profitable commercial opportunity, but which is secretly an economically-unviable fake due to the fact that the (alleged) opportunity has been rigged so that it generates no significant, or sustainable, revenue other than that deriving from its own ill-informed participants. For more than 50 years, 'Multi-Level Marketing' racketeers have been allowed to dissimulate rigged-market swindles by offering endless-chains of victims various banal, but over-priced, products, and/or services, in exchange for unlawful losing-investment payments, on the pretext that 'MLM' products/services can then be regularly re-sold for a profit in significant quantities via expanding networks of distributors. However, since 'MLM' products/services cannot be regularly re-sold to the general public for a profit in significant quantities (based on value and demand), 'MLM' participants have, in fact, been peddled infinite shares of their own finite money (in the false expectation of future reward). 

Thus, in 'MLM' rackets, the innocent looking products/sevices' function has been to hide what is really occurring - i.e The operation of an unlawful, intrinsically fraudulent, rigged-market where effectively no non-salaried (transient) participant can generate an overall net-profit, because, unknown to the non-salaried (transient) participants, the market is in a permanent state of collapse and requires its non-salaried (transient) participants to keep finding further (temporary) de facto slaves to sustain the enticing illusion of stability and viability.

Meanwhile an insignificant (permanent) minority direct the 'Long Con' - raking in vast profits by selling into the rigged-market and by controlling/withholding all key-information concerning the rigged-market's actual catastrophic, ever-shifting results from its never-ending chain of (temporary) de facto slaves.

Although cure-all pills potions and vitamin/dietary supplements, household and beauty, products have been most-prevalent, it is possible to use any product, and/or service, to dissimulate a rigged-market swindle. There are even some 'MLM' rackets that have been hidden behind well-known traditional brands (albeit offered at fixed high prices). Some 'MLM' rackets have included 'cash-back/discount shopping cards, travel products, insurance, energy/communications services' and 'crypto-currencies' in their controlling scenarios.

No matter what bedazzling product/service has been dangled as bait, in 'MLM' rackets, there has been no significant or sustainable source of revenue other than never-ending chains of persons under contract to the 'MLM' front companies. These front-companies always pretend that their products/services are high quality and reasonably-priced and that for anyone prepared to put in some effort, the products/services can be sold on for a profit via expanding networks of distributors based on value and demand. In reality, the underlying reason why it has mainly only been (transient) 'MLM' contractors who have bought the various products /services (and not the general public) is because they have been tricked into unconsciously playing along with the controlling scenario which constantly says that via regular self-consumption and the recruitment of others to do the same, etc. ad infinitum, anyone can receive a future (unlimited) reward.

I've been examining the 'MLM' phenomenon for around 20 years. During this time, I've yet to find one so-called 'MLM' company that has voluntarily made key-information available to the public concerning the quantifiable results of its so-called 'income opportunity'.

Part of the key-information that all 'MLM' bosses seek to hide concerns the overall number of persons who have signed contracts since the front companies were instigated and the retention rates of these persons. 

When rigorously investigated, the overall hidden net-loss churn rates for so-called 'MLM income opportunites' has turned out to have been effectively 100%. Thus, anyone claiming (or implying) that it is possible for anyone to make a penny of net-profit, let alone a living, in an 'MLM,' cannot be telling the truth and will not provide quantifiable evidence to back up his/her anecdotal claims.

Although a significant number of 'MLM' front-companies (like 'Vemma', 'Fortune Hi-Tech Marketing', 'Wake Up Now') have been shut-down by commercial regulators, some of the biggest 'MLM' rackets (like 'Amway' ,'Herbalife', Forever Living Products' ) have continued to hide in plain sight whilst secretly churning tens of millions of losing participants over decades

The quantifiable results of the self-perpetuating global 'Long Con' known as 'Multi Level Marketing,' have been fiendishly hidden by convincing victims that they are 'Independent Business Owners' and that any losses they incurred, must have been entirely their own fault for not working hard enough. 

Blog readers should observe how (in the above linked-videos) chronic victims of 'MLM' cults are incapable of describing what they were subjected to in accurate terms. Even though they are no longer physically playing along with the 'Long Con's' controlling-scenario, they unconsciously continue to think, and speak, using the jargon-laced 'MLM' script - illogically describing themselves as 'Distributors.' 

Chronic victims of blame-the-victim cultic rackets who have managed to escape and confront the ego-destroying reality that they’ve been systematically deceived and exploited, are invariably destitute and dissociated from all their previous social contacts. For years afterwards, recovering cult victims can suffer from psychological problems (which are also generally indicative of the victims of abuse):

depression; overwhelming feelings (guilt, grief, shame, fear, anger, embarrassment, etc.); dependency/ inability to make decisions; retarded psychological/ intellectual development; suicidal thoughts; panic/ anxiety attacks; extreme identity confusion; Post-Traumatic Stress Disorder; insomnia/ nightmares; eating disorders; psychosomatic illness, fear of forming intimate relationships; inability to trust; etc.

David Brear (copyright 2021)

Indian Consumer Affairs Ministry proposes further regulatory controls on 'Multi-Level Marketing,' but 'MLM' has already been judged as fraud in India.

About 14 years ago, the chapter of the criminogenic cult phenomenon entitled 'Multi-Level Marketing' was once recognised (by independent Indian senior law enforcement agents and judges) as fraud, but since that time, 'MLM' has mysteriously managed to survive in India.

In June 1994, representatives of the US-based ‘Amway’ crime families approached the Indian Ministry of Commerce and Industry (Dept. of Industrial Development) bearing gifts.

 

By steadfastly pretending affinity with officials (who, naturally, wanted to believe that all external investment creates employment), the ‘Amway’ crime families initially sought an agreement (renewable biannually) which simply paved the way for the creation a privately-controlled, unlimited-liability, commercial company, ‘Amway India Enterprises.’ As a subsidiary (entirely owned by its American parent company), the representatives of the ‘Amway’ racketeers meekly accepted that ‘Amway India Enterprises’ would be forbidden to manufacture or import. The proposed company would be permitted only to use its ‘Multi-Level Marketing Business Model’ to sell products sourced from local, independent, Indian manufacturers. 

 

Furthermore, ‘Amway India Enterprises’ was obliged to file a separate agreement with the Reserve Bank of India, allowing the proposed subsidiary to transfer capital to, and from, its parent and, thus, act as a de facto, foreign exchange dealer.

 

Consequently, without any informed scrutiny, officials at the Indian Ministry of Industry, Secretariat for Industrial Approval (Foreign Collaborations II Section) rubber-stamped the application for the proposed 'Amway' company (within less than two months) on August 26th 1994.

Twelve months later, 'Amway India Enterprises' was legally-registered after final approval by the Indian 'Foreign Investment Promotion Board.'

 

In this way, America’s contemporary version of the Trojan Horse was dragged unnoticed into India with the assistance of the country’s own apparently naïve (but possibly corrupt) regulators. However, it lay dormant until May 5th 1998 when a network of regional offices began to be established.

 

Six years later, the destructive contents finally began to spill out. On August 8th 2004, the (apparently safe) original (biannual) agreement was mysteriously altered (at the request of the corporate officers of ‘Amway India Enterprises’) allowing the unregulated manufacture, and/or importation, of ‘Amway’s’ own range of effectively-unsaleable household, beauty and health products.

 

At no stage did Indian officials bother to apply common-sense and ask how the so-called ‘MLM Income Opportunity’ could possibly be economically-viable, and lawful, when ‘Amway’ products were now, quite obviously, several times the price of equivalent (and often superior) merchandise widely-available in traditional Indian retail outlets? Yet, implicit to the modified agreement was the understanding that ‘Amway India Enterprises’ would respect Indian law and recruit non-salaried agents who could earn commission payments lawfully from regularly retailing products to the public.

 

That said, it is not known what other inducements (if any) these conveniently-blind civil servants received.

 

The guts of above information comes from a landmark judgement given on July 19th 2007 against ‘Amway India Enterprises’ by Chief Justice G.S. Singhvi, and Justice C.V. Nagarjuna Reddy, of the High Court of Judicature, Andhra Pradesh, Hyderabad.

 

In 2006, the Criminal Investigations Dept. of the Hyderabad police raided, and sealed, the local offices of ‘Amway India Enterprises’ arresting various employees, following a particularly detailed complaint filed by A.V.S. Satyanarayana under the ‘Prize Chits and Money Circulation (banning) Act, 1978.’ This courageous individual confessed that he had been deceived into wasting a significant amount of time and money after having been subjected to overwhelming psychological pressure to join ‘Amway’ by two dominant men in his own social circle. Within three days of the registration of this complaint, aggressive lawyers acting for ‘Amway India Enterprises’ issued two writs against the Hyderabad CID. Typically, ‘Amway’ posed as the innocent victim under attack. Ignoring all quantifiable evidence to the contrary, the lawyers steadfastly pretended that their employer’s ‘MLM Business Opportunity’ was entirely legal and that ‘Amway India Enterprises’ was acting with the full-approval of the Indian government. Therefore, the Andhra Pradesh police had neither reason nor authority to launch such a heavy-handed investigation, and, thus, damage, a legitimate business. At the same time, both the lawyers and corporate officers of ‘Amway India Enterprises’ tried to convince the world that Satyanarayana was a pathetic liar who had filed a malicious complaint only as the result of a marital/financial dispute which had, itself, resulted in his pursuing a vendetta against members of his family who were ‘Amway Distributors.’ 

 

Ironically, it was ‘Amway India Enterprise’s’ own malicious writs which brought the company under the rigorous scrutiny of the Andhra Pradesh High Court.

 

Simply by applying common-sense, Chief Justice Singhvi and Justice Reddy were immediately able to see that the ‘Amway MLM’ fairy story is far too good to be true. Then, by ignoring the scripted-lies of ‘Amway’s’ attorneys, and by concentrating on the compelling testimony of the victim (backed up by documentary evidence), they deduced that the so-called ‘MLM Income Opportunity’ is in breach of Indian legislation banning Pyramid/Money Circulation schemes. Despite the mystifying, linguistic and mathematical complexity of ‘Amway’s’ corporate camouflage, de facto agents of the company actually propagate the self-gratifying delusion that limitless prosperity can eventually be obtained without any further effort simply by regularly purchasing products and recruiting others to do the same, etc., ad infinitum. As a consequence, the two writs were dismissed, and the High Court of Andhra Pradesh ordered that the Hyderabad Criminal Investigation Dept. should be allowed to continue to follow whatever procedures are permitted by law to hold the corporate officers of ‘Amway India Enterprises’ to account.

 

Fifteen years later, despite the boss of 'Amway India Enterprises,' and two other corporate officers, being arrested for, and charged with, fraud in the Indian State of Kerala in 2013, the 'MLM Income Opportunity' plague still continues to infect India, whilst India legislators have continued to be approached by the representatives of US-based 'MLM' racketeers who, obviously, do not wish to have their real activities rigorously investigated by independent Indian law enforcement agents.

In the meantime, about six year ago, it was announced by the 'Union Consumer Affairs Ministry' that 'Guidelines' in the form of a set of proposed 'Consumer Protection Rules' had been drawn up in order to regulate the 'Direct Selling Industry' in India. 

However, at the time, I observed that, although these 'Guidelines' appeared to be a step in the right direction, ultimately, they  failed to identify the true criminogenic nature of the phenomenon they had supposedly been designed to tackle.

Yet there are a growing number of observers in India who do understand that their country has been infected by a plague of pyramid schemes in the form of 'Multi-Level Marketing' - i.e. economically-unviable rigged-market swindles and related advance fee frauds, dressed up as economically-viable and lawful 'direct selling income opportunities and training/motivation programs.' These foreign and domestic cultic rackets have been designed to lure vulnerable Indian citizens into de facto servitude controlled by the dangerous, self-perpetuating, non-rational ritual belief that anyone can earn unlimited financial rewards by duplicating a step-by- step-plan involving the regular purchase of goods/services and the recruitment of others to duplicate the same plan.  

Apparently, Indian regulators had naively imagined that the bosses of 'Multi-Level Marketing' companies operating in India were going to follow the 'Guidelines,' even though they initially risked no penalties for ignoring them.

It has now been announced that the 'Consumer Protection Rules' concerning 'MLM' companies will be enforced and that penalties for breaking them will be introduced. 

David Brear (copyright 2021)

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Govt draft norms ban direct selling companies from offering pyramid, money circulation scheme (livemint.com)

NEW DELHI : Direct selling companies like Amway and Tupperware will not be allowed to offer the pyramid and money circulation scheme, as the government has come out with a draft norms to regulate such firms and protect the interest of consumers in the country.

For the first time, the Union consumer affairs ministry has framed the Consumer Protection (Direct Selling) Rules, 2021, and sought public comments by July 21.

Earlier, in 2016, the ministry had come out with a set of guidelines for these companies which were advisory in nature. The draft rules now propose penalties for violations.

As per the draft rules, direct selling companies are banned from promoting a pyramid scheme and money circulation scheme.

A pyramid is a multi-layered network of subscribers to a scheme formed by subscribers enrolling one or more subscribers in order to receive any benefit, directly or indirectly, for enrolment of additional subscribers to the scheme.

Direct selling companies have to register themselves under relevant Indian laws and also with the Department of Promotion of Industry and Internal Trade (DPIIT) for allotment of registration number. They should have minimum one physical location as registered office in India.

The companies are required to appoint chief compliance officer, grievance redressal officer and a nodal contact person for coordination with law enforcement agencies.

The companies are required to maintain proper and updated website with all relevant details of the entity, contact information, product information, price and grievance redressal mechanism for consumers.

The companies should issue proper identity cards and documents to its direct sellers fulfilling KYC verification requirements. They should maintain a record of all direct sellers who have repeatedly offered defective or spurious goods.

"A direct selling entity and a direct seller shall not induce consumers to make a purchase based upon the representation that they can reduce or recover the price by referring prospective customers to the direct sellers for similar purchases, if such reductions or recovery are contingent upon some uncertain, future event," the draft rules said.

To regulate direct sellers, the government has proposed that they will not visit a consumer's premises without identity card and prior appointment or approval.

Direct sellers should not provide any literature to a prospect, which has not been approved by the parent direct selling entity.

Also, any person who sells any product or service of a direct selling entity through an e-commerce platform must have a prior written consent from direct selling entity.

A convicted person or bankrupt should not be engaged in the business of direct selling, the draft rules said. 

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Economic “Pandemic”, a Review by Robert FitzPatrick of a Groundbreaking New Book in India

A new and strange phenomenon emerges in one of largest countries in the world. It entered almost silently but soon millions of people are affected. From first impressions, it appears harmless and unconventional, even hopeful and positive, yet virtually all that touch it are harmed, resulting in family and social disruption, depression, even suicides. A few people, especially those who helped to bring it into the country, claim that it offers happiness, health and wealth. They say it is the wave of the future, a break from the old ways. These positive and hope-filled testimonials overshadow the tragic experiences of many others. 

Marauders of Hope is available in hard copy or e-book.

It spreads virally from one person to another. Those who contaminate others often do not realize what they have done. Others seem to know, but deny the consequences of their actions, claiming private, individual rights without personal responsibility. The harm, the denial and the lack of understanding cause widespread confusion, conflict and mistrust. 

A small number of journalists, law enforcement officers and other experts examine the phenomenon and identify it as virulent, inherently destructive and illegal. They warn that it attacks the country’s foundation. If it is allowed to spread, they warn, it will distort values and corrupt government, courts, and other institutions. They name the country it came from and call it a form of invasion.

Astonishingly, they are met with a wall of dismissal or are ignored altogether. Trusted national and state politicians inexplicably reject carefully prepared evidence and data from experts and insist there is no proof of a direct connection to harm. They argue that those who say they were harmed likely brought misfortune on themselves. They point to prominent figures who endorse it. They also note the millions of people, including some that were harmed, that do not complain. Some go further to attack the experts, as anti-social, uninformed, and possibly instigated by wicked motives.

This is not the story of the corona virus epidemic or a toxic food or cancer-causing herbicide brought into a country where corrupt leaders ignore science and make money off of illness. It is the story of how multi-level marketing (MLM) schemes, e.g., Amway, Herbalife, etc., got into India and the sad and tragic consequences to that country. It is from the remarkable new book, Marauders of Hope, by Aruna Ravikumar, a courageous Indian journalist, based in the city of Hyderabad in south central India.

Marauders of Hope is described on the cover as “A dissection of multi-level marketing companies’ web of deceit, powerful international lobbies, political patronage and the gullible consumer.” It is the first full-length book from the field of journalism anywhere in the world that addresses the multi-level marketing phenomenon. The book’s Foreword is by Sanjay Kallapur, Deputy Dean, Indian School of Business, Hyderabad. Written in February 2019, Professor Kallapur prophetically likened stopping multi-level marketing to “preventing a disease. First, individuals should take precautions just as they should wash their hands regularly and avoid places that have many infected individuals.”

It should be noted that no major book publisher in India was willing to support this book. Based on my experience seeking major publishers for my own books, False Profits in 1998 and Ponzinomics to be published this summer, I suspect rejection is based on fear of harassing lawsuits from MLMs or unfounded assessments that the subject would not produce enough sales. For some publishers rejection is shockingly due to lack of awareness of the MLM phenomenon or interest in this Main Street scourge.

Marauders of Hope was published by The Write Place, a publishing initiative of Crossword Bookstores Ltd. a chain of bookstores in India based in Mumbai.The author characterizes the book as semi-self-published. It is available in hard copy or e-book. The author dedicates it to “victims of MLM fraud all over the world.”

According to MLM promoters, in 2018 there were about 5.5 million people in India who paid more than a billion dollars (a larger dollar figure is claimed for “retail” sales, which are unverified) or around $200 per person. The median per capita income in India is $616 a year. In India, as everywhere else, 99% of all MLM participants fail to gain a net profit each year. 

Invasion and Duplication

Marauders of Hope is a comprehensive overview of how MLM came into India in the late 90’s with Amway as first invader, followed by the usual list of American copycats, Mary Kay, Herbalife, Nuskin and others. Now there are scores of India-based MLMs, all modeled exactly on the American prototypes. Many have organized into a syndicate, a chapter of the Direct Selling Association that pressures the Indian government at state and federal levels, defends MLM against law enforcement and promotes MLM as “direct selling” and a life-saving “income opportunity.” As the number of schemes is increasing, like a virus, MLM is poised to expand exponentially in India.

The primary “customers” that buy MLM products in India, as everywhere else, turn out to be the “salespeople” themselves. As an example of the bogus nature of MLM “products” Marauders of Hope describes how residents in one poor village in rural India were swept up by MLM’s prosperity promises. To gain the bonanza, illiterate recruits were induced to purchase and supposedly sell a “car wash” product. As reported in the book, “… their village could not boast of a single car. Pathetic as it is, companies amassing huge profits from recruitment couldn’t care less. They are happy as long as the distributors keep purchasing ‘promotional kits’ (training material and videos) and the monthly quota of products.”

For me personally, as an American, to read Aruna Ravikumar’s account is to experience both déjà vu and a deep sense of shame. MLM was invented in the USA. Influence-buying with corrupted American officials obtained not only immunity from law enforcement but also the active promotion and protection of the US State Dept. and Dept. of Commerce, which in turn pressure other countries’ governments to allow American-style MLMs. 

Eerily, the story line of MLM’s entry and insinuation into the fabric of India, follows the playbook of how MLM emerged within the USA. It begins with liberalizing economic movements that promised greater freedom and more economic opportunity for all. Nationally-owned industries were sold to private investors. Market solutions were promised for social problems. Poverty would be reduced not by reforms or direct action but as a consequence of business growth. Amway sold itself as one of the vehicles of opportunity, claiming it would help to lift the masses out of poverty. It leveraged American government support for admission into India and then began its American-style propaganda and recruitment. Each recruit was called a “business owner” and pyramid recruiting was described as “entrepreneurship.” Critics were called anti-business or socialistic.

Predictably, reports of losses, disappointment, deceit, and betrayal exploded. This prompted efforts by some courageous attorneys, regulators and police officials to prosecute MLMs under India’s anti-pyramid law, called the Prize Chits and Money Circulation Schemes (Banning) Act, which was passed in 1978, about a decade after similar laws were enacted in the USA in many states. The US still does not have any national statute defining and outlawing pyramid schemes but they could be covered under longstanding criminal fraud laws. India’s national law enables police raids and seizures of property from such schemes and prison for the leaders. 

The story continues along the American experience in which political lobbyists from MLM succeed in somehow exempting MLMs from the very laws intended to restrict them or they manage to shield them with ambiguous or limited court rulings. The media largely comply, spreading the notion that MLM is not a money-circulation scheme because products are “sold.” 

Unlike her journalist counterparts in the USA, author Aruna Ravikumar is unequivocal as to how it is that MLM continues in India, despite the documented deception and enormous losses. 

“Why do we see the same scams re-enacted time and again? How are old players back to their tricks under new names? To the many questions raised there is only one answer: political patronage. Regulatory institutions can do little when those in power decide to help fraudulent companies in an understanding that is mutually beneficial.” 

She also breaks ranks with journalists around the world by treating “MLM” as an overall phenomenon, making no significant distinction among them. They are all essentially the same in her analysis, no “good” MLMs.

Promoted as a legal and conventional business but, uniquely and miraculously, also able to deliver “unlimited income,” which no other business or industry could, MLM spread like a mania across India. It enrolls illiterate villagers and educated urban dwellers as well. Products purchases provide camouflage for the blatant money transfer scheme and the impossible “endless chain” (pyramid scheme) that dooms the vast majority. Half or more of the price paid by the enrollees for MLM’s inflated products is transferred up the chain, concentrating in the hands of top schemers ensconced in America and other countries. The profits to the foreign holding companies (Herbalife, for example, is chartered in the tax haven of the Cayman Islands) and the payments to top pyramid recruiters largely escape Indian taxation.

Also, as in America, India has its champions who have sought to expose the hidden and toxic truth about MLM and to halt its ruinous spread. The book pays tribute to them, including Superintendent of Police in Andhra Pradesh, Raghuram Reddy who arrested William S. Pinckney, the CEO of Amway India, for criminally operating a pyramid scheme. The action provoked an immediate political response against law enforcement. Reddy reported,

“There was enormous pressure with telephone calls being made on behalf of the US Embassy. The media carried front page stories and the entire police department of the state came into focus. I acted on the case with fool proof evidence and was doing what I was supposed to do under the circumstances.”

Among other heroes in India cited in the book is journalist Shyam Sundar, who organized Corporate Frauds Watch, which undertook a study of MLM and offered legal help to victims while also conducting awareness programs. 

“We noticed that these firms not only duped innocent people but also had the audacity to approach courts as if they were victims. In most cases they convinced legal authorities that they were on the right side of law and got a stay on police investigation,” Sundar stated.

Sundar, took special note of the court arguments made by the notorious MLM scheme called Gold Quest when it was prosecuted. (Note: I am personally very familiar with this Gold Quest MLM, aka Q-Net, which has ravaged many other countries. I was invited to deliver a seminar in the nearby country of Sri Lanka in 2005, prompted by activity of that scheme that posed a direct risk to Sri Lanka’s currency which was being siphoned out of the country with the scheme’s inflated gold coins. Attendees also included central bank representative from India.) In the India prosecution, Gold Quest’s high profile attorney was the wife of a former central minister of the Indian government. She used the rationalization so commonly heard in MLM defenses in America of “Goldquest is just like Amway (which is true), so, unless you outlaw Amway, why are you singling out my client?” 

Aruna Ravikumar called this a “brazen defense” that openly admits that all MLMs are essentially identical. It is a public taunt to the government, daring it to act against the entire MLM “industry”, knowing that it will not since it has been bought. Instead, as she explains, Indian authorities (exactly as they do in the United States) maintain “ambiguity” and “space for interpretation” which, in reality, she writes, serve as a “cloak for fraud, and a leeway for regulators and enforcement authorities to defer action.” She concludes that it is “undeniably apparent that as long as the ‘passing the buck’ game was on (in India as it is also in the United States) it was ‘party time’ for the marauders.”

The Greed Claim

Beyond consumer loss, exploitation and deception, economic piracy by the USA, cult persuasion and the further corruption of India’s political and judicial system, there is one more theme woven throughout Marauders of Hope. It is the element of human greed. The manias caused by MLM promises of wealth appear as massive outbreaks of unbridled greed.

Greed haunts all inquiries into the MLM phenomenon. It is used by corrupted legislators and regulators to justify allowing the frauds to spread. It is a key part of the blame-the-victim narrative that shames victims into silence. To identify MLM victims or to associate them, even indirectly, as paradigms of greed is a powerful form of blame. In the Christian tradition, for example, greed is one of the seven deadly sins, along with pride, lust, envy, gluttony, wrath and sloth. To brand MLM victims with this sin is to banish, castigate and separate them from the public at large. In fact, there is no “typical” MLM victim, no identifiable profile. They are us.

Aruna Ravikumar vividly captures and rejects the blanket greed labeling:

“Victims are paying for their own greed. What is so heart rending about their stories?” I overheard a well-to-do socialite say, shrugging her shoulders in disdain when this topic came up in our conversation. Her careless dismissal may seem not quite off-the-mark but with clear evidence pointing to the web of deception, ruined relationships and outright fraud on the poorest of the poor, shifting the onus onto the victims seems grossly unfair.”

From my own two-decade long experience with the MLM phenomenon, I think the greed factor deserves stronger rejection, more clarification and less emphasis. This book makes clear that greed of victims is not primary, yet, reflecting the widespread greed narrative, it opens with a quote about greed from famed social psychologist, Eric Fromm, “Greed is a bottomless pit which exhausts the person in an endless effort to satisfy the need without ever reaching satisfaction.” The first sentence of the Preface reads, “This book is about the unconcealed greed of companies and individuals who reap a rich harvest through fraudulent financial schemes that are a recipe for disaster.”

For my part, I have never found that the ordinary people lured into MLM – and I have talked or corresponded with thousands from many countries – are distinguishable by greed. It does not manifest in any other part of their lives. Far more common is the motive of merely seeking relief or escape from burdensome, sometimes desperate financial conditions. Often they are driven by higher aspirations for their families or even by a desire to make a more positive impact in the world. MLMs entered India by claiming they were bringing modern values and business models that produce profit and prosperity. To be lured by such claims, backed by trusted local authorities, in my view, does not constitute greed.

Cultic Movement

Additionally, sophisticated cult persuasion methods used by MLMs subvert critical thinking and core values. The goal is to separate victims from their own identities and to replace them with a delusional ideology, based on the “endless chain” and magical claims about creating wealth from unquestioned belief and positive thinking. It dresses up deception as “selling” and the commercialization of intimate relationships as “marketing.” When such distorted or contemptible messages are cloaked in these sophisticated disguises and then endorsed by trusted authorities, including religious leaders and admired celebrities, psychological defenses can be overwhelmed.

Individuals are not actually lured into MLM one by one. Their losses are not the personal price for a private indiscretion. MLM recruiting is a global phenomenon, a cultic movement. MLM is a cult of capitalism that has been expanding for more than 40 years. As a cult, it teaches a radical belief system that distorts and exaggerates more conventional beliefs and values that are generally accepted by most people, though likely unexamined. These are the core beliefs that underly our capitalistic system, including personal acquisitiveness, “unending growth”, private gain, supremacy of the “market”, upward mobility, protection of private ownership, etc. Most people measure their self-worth and their place in the world by these values.

MLM manipulates these beliefs and values to cover over its fraudulent pyramid structure and illicit money transfer and then also to cover up the pre-determined losses as a “business” outcome. It distorts and exaggerates the beliefs into a totalistic system with absolute dogmas, promising utopia to those who follow it without question, while claiming to be the purest, truest expression of market capitalism. Its leaders assume the authority of economic gurus. The behavior advocated by this extremist ideology can resemble that of sociopathic CEOs that pursue “return on investment” at any cost or religious extremists who seek to convert the world and permit no dissent. 

Big Lie

Far more relevant for identifying and condemning what particularly distinguishes MLM is Deception. The deceptive methods used in MLM would make Madison Avenue and Ministries of Truth blush with envy. From victims’ very first encounters with MLM when they are solicited, MLM is grossly misrepresented. It is therefore a fact that no one joins an MLM knowing what it really is. Not only are its rigged pyramid model and money-transfer plan hidden, but participation costs, inability to retail the products, and historical loss and quitting rates, are all undisclosed or misrepresented. Many of the “testimonials” about income are fabrications. Even the company names are often withheld.  Of course, the products themselves are grossly over-priced and misrepresented, often with false and dangerous medical claims. More recently, MLMs have become active in promoting ponzi-based crypto-currencies. 

Beyond the deceptions that are spread virally, there are the official false claims issued by MLM’s so called trade association, and often repeated in the news media. These include false “average incomes”, unverified claims of “retail” sales, fake “surveys”, and absurd claims that it is creating “jobs.” During the Corona Virus while people are sequestered in homes, MLM promoters are claiming it is the ideal “business” for “working from home.” During the last Great Recession, MLMs were touted as “safe havens” and a “fallback” for those who lost jobs.

Powerfully aiding the avalanche of deception are the cult methods of persuasion and domination, involving “motivation” rallies, utopian visions, rousing music, chanting, specialized terminology, and constantly repeated lies, based on the truism that a lie repeated often enough becomes accepted as true. Separating victims from objective reality is aided by alienating recruits from families or friends who question the schemes, resulting in what is aptly described as brain washing or thought control. 

The false depiction of MLM as “direct selling” and “extraordinary income opportunity” has been accurately characterized as the classic “Big Lie,” a propaganda technique described by Adolph Hitler as a lie so “colossal” that no one would believe that someone “could have the impudence to distort the truth so infamously.”

For this reason, perhaps beyond her clear-sighted illumination of MLM and her unflinching chronicle of India’s tragic experience, Aruna Ravikumar’s book deserves special acknowledgment. She confronted the Big Lie.

                                                                                    Robert L. FitzPatrick

(copyright 2020)