In February 2014, soon after this Blog was created, I posted an article about 'Boiler Room' frauds which were then being targeted by a major, UK-based, law enforcement action called 'Operation RICO.' Lately, this article has again been receiving significant numbers of page visits.
At that time, I wrote the following:
___________________________________________________________________________
The term, 'Boiler Room,' arrived during the 1970s inside American political parties to describe the practice of using a central office connected to multiple phone-lines (manned by party-activists) to seduce prospective voters across the nation. Supporters of (Republican) President Richard Nixon, are known to have employed the same practice in reverse - i.e. they cold-called thousands of known swing-voters in the middle of night in key states, and pretended to be aggressively canvassing for the democrats. The term 'Boiler Room fraud,' is thought to have been coined in the 1980s, to describe members of the American 'Mafia' who adopted similar, industrial cold-calling tactics to contact as many potential victims as possible.
'Boiler Room' gangs (so-called, because of the high-pressure techniques they use, and low-profile premises from which they habitually operate) pose as stock broking firms with hot-tips based on inside information, to deceive victims into buying valueless fake 'investments.'
'Operation RICO,' was led by City of London Police officers. Targets for investigation, were described as 'ten, tier-one criminals' suspected of being linked to organised crime and drug trafficking. Nine of them are British, one is a South African.
During the past two years, 14 'Boiler Room' gangs have secretly been targeted by a British-led coalition of law enforcement agencies, in what has been widely-described as 'an unprecedented international crackdown on fraud.'
'Operation RICO' (presumably named after the US federal Racketeer Influenced and Corrupt Organizations Act, 1970), has so-far produced 110 arrests - mostly in Spain and the UK. Ironically, there is currently no RICO-style anti-racketeering legislation in the UK. However, to-date there are 850 confirmed 'Boiler Room' victims in the UK with combined losses of approximately £50 millions, but these figures do not accurately represent the full extent of the problem, because, classically, most fraud victims remain silent out of fear, shame and embarrassment.
'Operation RICO,' involved the Spanish police and various other international law enforcement agencies, including the US Secret Service. 84 arrests were made in Spain in raids by 300 officers including 40 officers from the UK. A further 20 persons were arrested in the UK, 2 in the USA and 4 in Serbia. A number of luxury vehicles and properties were seized.
UK Police have said that typical British 'Boiler Room' victims have lost from £2,000 to £500,000. However, the 'Financial Conduct Authority' has admitted that a least £200 million is being taken from UK citizens in 'Boiler Room' frauds each year, and that the largest individual loss recorded by UK police, is a staggering £6 millions.
Those caught by 'Boiler Room' gangs are generally vulnerable, commercially-inexperienced individuals aged 40 and over, but many are in their 70s and 80s. Police admit that a significant number of destitute victims have already committed suicide.
The criminals cold-call their prey, using classic, coercive behaviour modification techniques - pretending affinity with potential victims - tricking them into parting with their money whilst giving them the illusion that they are always making free-choices. Victims are initially told of attractive returns of 10 to 20% per year. They are then pointed to fake commercial Websites and brochures and told that, if they hurry, they can still invest in secure bonds backed by famous legally-registered companies. Some victims have been paid 'dividends,' to lure them further into the trap.
One British woman, Joan Mayer (aged 78), courageously admits to being tricked (over a period of two and a half years) into handing over £23,000 in exchange for valueless fake carbon credits, and shares in anti-malaria products and rare earth metals. She was then coerced by another crook, posing as 'a salesman,' into borrowing £140,000 to buy valueless fake 'shares in a gold mine.'
The UK police acknowledge that they cannot eradicate 'Boiler Room' fraud, and that by forcing the gangs behind it, out of Spain, they are probably only shifting the centres of operations (that have been targeting UK citizens), to non-European countries like Thailand, Indonesia and the United Arab Emirates. The cultic aspect of 'Boiler Room' fraud also seems to have begun to register with the press and police, because they already accept that the cold-callers are both perpetrators and victims, and that they are not the main beneficiaries.
In brief, due to its scale, 'Boiler Room' fraud is a form of industrialised psychological, and economic, warfare, and the generals directing it, have almost unlimited resources available to them.
David Brear (copyright 2014) ___________________________________________________________________________
The above article received a comment from a retired television researcher who had 'been involved in the investigation of a type of fraud known as 'Vanity Publishing.' The commentator wrote the following:
___________________________________________________________________________
'The fraudsters registered publishing companies and then advertised in national newspapers and magazines for new authors to send in manuscripts. No matter what rubbish was sent, the companies immediately said it would sell and they agreed to publish it, but the authors had to pay. Once victims were hooked, more and more money was extracted. In the end, all the victims got were boxes full of tatty remaindered books. In some cases, victims threw away tens of thousands of pounds. Vanity publishing victims were too embarrassed to complain.'
__________________________________________________________________________
'Vanity Publishing' frauds are based on the fact that the world is full of ill-equipped people who dream of becoming full-time writers, just as the world is now full of ill-equipped people who dream of becoming full-time investors and business owners.
Criminals simply act like mirrors, and reflect back their victims' own existing beliefs and instinctual desires as reality.
Due to a lack of complaint, fraudulent 'Vanity Publishing' companies were permitted to exist and multiply for decades in the UK, before the worst offenders were successfully challenged by civil regulators, who claimed back all the money they had taken illegally by filing public interest bankruptcy petitions against them in the High Court. These civil prosecutions took place in the 1990s. 'Minerva', 'Pentland' and 'Serendipity' were three of the biggest 'Vanity Publishing' scams busted in Britain. Without checking, I can't remember whether any individuals behind these fake 'publishing' companies, were ever charged with criminal fraud in Britain.
In 2007, again after decades of ignoring the problem, UK civil regulators tried the same bankruptcy petition tactics on 'Amway UK Ltd,' a legally registered company that had been peddling hundreds of thousands of people vanity 'direct selling businesses,' but only part of the scam was presented in court, and the bankruptcy petition did not succeed.
Currently, there are numerous vanity 'business' frauds operating in plain sight in the UK, some of these, like 'Amway UK Ltd.,' have been legally-registered for decades.
Again, due to an absense of mainstream media interest and resulting lack of complaint, regulators and law enforcement agents, do nothing to stop vanity 'business' frauds.
In brief, for decades, criminals have hidden behind, legally-registered, but fake, 'direct selling' companies and offered endless chains of ill-informed individuals there 'very own home-based businesses,' which they insist are based on 'selling exclusive good-value products, and/or services' and on recruiting networks of further 'business-owning' sales agents or 'distributors'.
These corporate structures style themselves as 'Multi-Level Marketing' ('MLM') companies, but they have been a front for a form of major racketeering activity: comprising blame the victim rigged-market swindles or pyramid frauds, and related advance fee frauds.
In reality, once victims have signed up, they have been told by charismatic persons claiming to have made millions that they can only achieve 'financial freedom' in 'MLM' by 'exactly duplicating a proven plan.'
The 'plan' comprises, buying a fixed quota of effectively-unsaleable, banal, over-priced products, and/or services, each month, and recruiting others to duplicate the same plan, etc. ad infinitum. In other words, in 'MLM' rackets, little or no money has come from authentic sales to the general public (based on value and demand); it has mostly come from unlawful losing investment payments (based on the false expectation of future reward), but laundered as lawful sales (based on value and demand).
Victims have been told that in order to achieve 'financial freedom' they must also exactly duplicate the behaviour and attitudes of the most successful 'multi-millionaire MLM Distributors'.
In the majority of cases, 'MLM' victims waste a relatively small quantity of time and money, and quit after discovering that it is effectively impossible to recruit and maintain further active recruiters. Few have ever complained, because that would involve admitting that they were duped, and many have been recruited by their own friends and relatives.
In a significant minority of cases, victims (with access to independent funds, and/or credit) have continued for years as de facto slave recruiters, programmed to ignore their mounting losses and to exclude from their lives anyone challenging the authenticity of the 'MLM' Utopia. Like chronic gambling addicts, some victims have gone massivey into debt falsely-believing that one day 'MLM' will work for them and all their 'dreams' will be achieved. Some victims have fallen for several 'MLM' frauds. In the very worst cases, destitute 'MLM' victims have killed themselves.
Over the decades, the bosses of the front companies of this type of dissimulated organized crime, have grown so rich and powerful, that they have effectively bought immunity from prosecution in the USA and elsewhere. Furthermore, the mainstream media has never really tackled this problem and the reality-controlling term 'MLM' is now often used by the press as though the financially sucidal theory of 'endless chain recruitment + endless payments by the recruits = endless prosperity for the recruits,' is perfectly viable and lawful.
Apart from their monthly purchases of effectively-unsaleable 'MLM' products, and/or services (usually totalling two or three thousands £ per year), chronic 'MLM' adherents, have to pay all their considerable sart up and operating costs. They are also led to believe that they should buy 'training an motivation' programs: comprising endless publications, recordings, tickets to meetings, etc., on the pretext that these 'optional' materials 'contain secrets vital to achieving success in MLM.'
The worst 'MLM' victims I've encountered in Britain have wasted up to £20 000 annually and have persisted for periods in excess of 15 years.
David Brear (copyright 2026)
The Big 'Multi-Level Marketing' Lie.
Introduction
January 2006, a UK government regulatory agency, the ‘Company
Investigation Branch’ of the ‘Dept. of Trade and Industry,’ launched a major law
enforcement action against ‘Amway UK Ltd.’ However, in reality, this
privately owned British company, first registered in 1973, was just one out of dozens
of subsidiaries of a gigantic, American-based, privately owned, multinational, parent
corporation, which first appeared in 1959 as, ‘Ja-Ri Inc.,’ then
in 1963 becoming, ‘The American Way Association Inc.’ or ‘Amway
Inc.,’ but since 1999 also known as, ‘Alticor Inc.’.
Fifteen months later, April 2007, John Hutton, the
Business Secretary (trade minister) in the Labour government of Gordon Brown,
filed a ‘public interest bankruptcy petition’ in the UK High Court, seeking the
compulsory closure of ‘Amway UK Ltd.’ In brief, the company stood
accused of peddling ‘an inherently objectionable dream-selling scheme’ in
contravention of the ‘UK Fair Trading Act 1973,’ and the ‘UK Lotteries and
Amusements Act 1976.’ At this time, two more, privately owned British companies,
‘Britt World Wide UK Ltd.’ and ‘Network
TwentyOne UK Ltd.,’ ostensibly run by persons described as, ‘Amway
Diamond Distributors,’ were included on the same bankruptcy petition.
Again, these were subsidiaries of American-based, privately owned,
multinational parent corporations. Yet soon afterwards, these two companies were
quietly removed from the petition when, as a result of some behind-the-scenes
negotiations with the regulators, ‘Britt World Wide UK’ ceased ‘trading,’
and the legal representatives of ‘Network TwentyOne UK’ apparently agreed
that their corporate client would immediately follow suit should the petition
against ‘Amway UK’ be granted.
Eight months later, the UK government’s isolated civil
prosecution of ‘Amway UK’ came to court in a hearing which the
regulators said would be ‘closed to the public.’ These proceedings were
spread over eight days at the end of November and beginning of December 2007. Sadly,
although the basic facts of this case were reported by some media outlets, no
journalist bothered to dig deeper into what was far from being an ordinary story.
For privately, the regulators described this civil prosecution as being the
result of ‘the largest ever investigation of a British company.’ Indeed, truckloads
of documentary evidence had been seized at ‘Amway UK’s’ head office in
the Buckinghamshire city of Milton Keynes by a team of specialist CIB agents
led by Peter Bott. However, after looking beyond a wall of mind-numbing
mathematical, and linguistic, hocus-pocus, the regulators had initially been
faced with an enigma. During the thirty+ years of ‘Amway UK’s’ existence,
the company’s independent auditors had never once signed off on an annual net trading
profit. In fact, in just the period 2000-2006, ‘Amway UK’ had officially
chalked up accumulated net trading losses of approximately fifteen million £. Although
this disastrous company had always been haemorrhaging financially, for some obscure
reason, its American bosses had been keeping it alive with cash transfusions
declared as deriving from various other ‘Amway’ subsidiaries in Europe and
Asia.
Yet for decades, ‘Amway UK’ had been allowed to pose
as ‘Britain’s most successful direct selling company, offering ordinary
people an entirely legal, government approved, Multi-Level Marketing income/business
opportunity.’ However, completely contrary to its nonspecific,
jargon-laced ‘commercial’ cover-story, prior to 2006, there had never
been the slightest official attempt to determine what was the real function of
this apparently pointless corporate structure. For whilst ‘Amway UK’s’ own
exciting comic-book narrative had eventually boasted of fifty+ million £
of ‘annual sales,’ via an expanding ‘salesforce’ rapidly approaching one
hundred thousand UK and Irish ‘distributors,’ the regulators had now discovered
that, in the adult world of quantifiable reality, ‘Amway UK’ had lately been
declaring ‘annual sales’ of only around ten million £, whilst the average
churn rate for participants in the company’s scheme had always exceeded 50% per
year. Consequently, it was possible to extrapolate from the available data that
around one million recruits had in fact gradually passed through ‘Amway
UK’s’ so-called ‘distributor’ ranks 1973-2006. Indeed, all these
people had signed take-it-or-leave-it contracts which had also falsely labelled
them as ‘Independent Business Owners (IBOs),’ thereby obliging
them not only to accept responsibility for their considerable start up and
operating costs, but also, on pain of unilateral termination of their
contracts, to obey an additional thick book of ‘rules’ and abide
by ‘Amway’s’ own, loaded, internal system of ‘dispute resolution.’
Yet, after the deduction of all their costs, not one of this expanding flock of
transient would-be entrepreneurs had managed to generate so much as a penny of overall
net-income lawfully by regularly retailing fixed-priced ‘Amway’-supplied
products, and/or services, to persons who were not fellow so-called ‘IBOs.’
Thus, since there had never been a significant and sustainable source of
revenue other than that deriving internally from the purchases of ‘Amway
UK’s’ own contractually bound so-called ‘salesforce,’ the
hidden overall net-loss churn rate in this so-called ‘income / business opportunity,’
was effectively 100%, and by design. However, the fact that virtually no one had
been complaining, indicated that something extremely sinister must have been occurring
here.
Although it was never reported, the decision to prosecute
‘Amway UK’ had in fact been made, when (after receiving guidance) UK regulators
had finally woken up and deduced that the hidden function of this mysterious, chronically
insolvent British company, had been to act as bait in a heavily disguised human
trap. Sadly, whilst the UK national media had failed to identify it and, and by
doing nothing to stop it, the authorities had effectively authorized it,
year upon year, this insidious criminal mechanism had been permitted to pump
out a steady stream of bedazzling propaganda, and thus, keep luring and exploiting
an endless chain of fresh UK and Irish recruits. However, although the
overwhelming majority of ‘Amway’s’ unwitting human quarry had
remained for less than a couple of years and wasted a few thousand £, a
significant minority (around 5%) with access to enough independent funds,
and/or credit, had been able to remain in the trap for extended periods, recklessly
wasting many thousands of £ and isolating themselves from anyone trying to
reason with them. For even though they had no chance of establishing a viable
business, just like chronic gambling addicts, chronic losers in ‘Amway’s’ rigged,
pay-to-play game of ‘commercial’ make-believe were totally convinced
that they would ‘soon become winners,’ because they had ‘discovered a
sure-fire way to make all your dreams come true.’
Despite the somewhat obvious reality that the so-called ‘income
/ business opportunity’ peddled by ‘Amway,’ had always been a cruel fake,
in the spring of 2008, it was reported in ‘The Times’ that 'Amway
UK' had been ‘cleared at the High Court of dream selling, of operating an
unlawful lottery and of being an unlawful trading scheme.' This,
however, did not even come close to being an accurate summary of what was
contained in the lengthy, ambiguous and astonishingly naïve ruling handed down
by one High Court Judge, Mr. Alastair Justice Norris, and which was
subsequently upheld by two out of three Appeal Court Judges. For although Judge
Norris accepted that the government’s case against ‘Amway UK’ had been
brought on valid grounds, he then concluded that 'the public interest
bankruptcy petition' should be 'declined,' and no other penalty imposed. Regrettably,
in his ruling the judge completely failed to spot the far reaching implications
contained in some truly jaw-dropping ‘defence evidence’ provided by Richard
Berry, the senior corporate officer of another, apparently ‘independent,’ privately-owned
company, the so-called ‘UK Direct Selling Association,’ of which ‘Amway
UK’ had been the leading member and significant source of revenue. For
Berry confessed to the court, albeit in the form of a foolish boast, that 'Amway
operated its Multi-Level Marketing scheme in eighty other countries
around the world,’ and that, ‘for two decades, the overwhelming majority
of direct selling companies operating in the UK had also been running Multi-Level
Marketing schemes.’ Yet although it was staring him in the face, the truth
that ‘Amway’ is by no means unique, and that ‘Amway’s’ entire
multinational operation has always been a textbook example of a criminal racket,
disguised as a ‘legitimate commercial activity,’ and set up
behind a mystifying labyrinth of legally ‘independent,’ but in fact
interdependent, centrally controlled, corporate structures, designed to
prevent, and/or divert, investigation and insulate its real bosses from
liability, was evidently unthinkable to Judge Norris.
Consequently, Judge Norris’ decision to reject the UK
government’s public interest bankruptcy petition was made on the convoluted and
highly improbable grounds that, although ‘Amway UK’s’ unlawful scheme had
‘remained unaltered for more than thirty years,’ in order to comply with UK
legislation, ‘Amway UK’s’ current legal representatives and senior company
officers had now (only when faced with civil prosecution) given
solemn undertakings to the court that their 'business model' had been ‘voluntarily’
paused and then ‘significantly revised in October 2007,’ and that certain
of the company's ‘network leaders’ contracts’ had been terminated, because
they’d ‘broken Amway’s own rules.’ Thus, Judge Norris’
ruling (in which he compared ‘Amway’s’ so-called ‘network leaders’ to
‘gang masters,’ but avoided terms like: ‘fraud, withholding of key-information,
swindle, exploitation, de facto slavery, deception, money laundering, tax
evasion,’ etc.) was based on the demonstrable falsehood that it was just a
few British ‘Amway Diamond Distributors’ whose own ‘legally independent
companies, like Britt World Wide UK and Network TwentyOne UK,’ had been responsible
for making ‘unobtainable earnings claims’ and peddling the unlawful ‘dream
selling scheme,’ and that these were ‘unauthorized activities’
that ‘Amway UK’s’ company officers had remained unaware of, but had now identified
and taken steps to prohibit.
However, even Judge Norris felt obliged to place on
record his own doubts that ‘Amway UK’s’ latest, heavily modified version
of its thirty-three-year-old ‘commercial’ cover-story was true. Nonetheless,
his complete lack of curiosity as to how much money had been stolen by fraud during
all these years of ‘unauthorized activities,’ and who in the USA had
ultimately controlled the British portion of ‘Amway’s’ gigantic, multinational
labyrinth of legally ‘independent,’ but in fact interdependent companies,
and received the lion’s share of the mountain of cash thieved and laundered by this
insidious criminal mechanism, has never been explained. For Judge Norris did
not call for Jerry and Mandy Scriven and Pat and Greta Gregory (the ‘leaders’
of the British subsection of another, gigantic, worldwide so-called ‘Amway Network’
known as ‘International Business Systems’), to be investigated
and held to account for the catalogue of abusive crimes which, in his own ruling,
he indirectly acknowledged that they and other ‘Amway gang masters’ had been
committing. Yet for many years, these two smiling couples had starred in ‘Amway
UK’s’ reality-controlling propaganda as, exemplary ‘Diamond Distributors
and Top Earners’ who could ‘teach others the secrets of success,’ but
in 2006, they had suddenly been air-brushed out the company’s comic-book narrative,
after being sacked from their so-called ‘Independent Businesses’ and
made convenient scapegoats. Indeed, as far as I’m aware, not one excommunicated
‘Amway UK’ scapegoat was ever interviewed by law UK enforcement agents,
or tax compliance officials, demanding to know where the bulk of money they had
stolen had gone and how much they had kept themselves.
Subsequently, knowing that they risked nothing from the
authorities, the Scrivens and the Gregorys spent years on the Net screaming
their innocence and declaring that, far from being ‘unauthorized,’
the activities for which they had been kicked out of ‘Amway,’ had always
been pursued with the full knowledge, and enthusiastic participation, of 'Amway
UK's' senior company officers. Yet, mysteriously, neither the Scrivens nor the
Gregorys were called as witnesses to perjury by the prosecutors during the High
Court proceedings, whilst the dispute resolution clause attached to their
so-called ‘distributor’ contracts prevented them from going to law.
However, again for reasons that were never explained, the regulators did not bother
to tell Judge Norris, that they already knew damn-well where most of the stolen
cash had gone and even approximately how much it totalled. They also knew that
there was plenty of evidence, as well as other far more reliable witnesses,
proving that ‘Amway’s’ senior company officers had simply pretended
affinity with the judge and fed him a pack of lies. Again, mysteriously, this
evidence was not produced, and these people were never called to testify. The
reason why I know all this, is because I am one of the witnesses who, in 1997, was
even threatened in writing with a lawsuit by ‘Amway UK’s’ legal
representatives, for speaking out about the very same unlawful activities that ‘Amway
UK’s’ senior company officers were allowed to deny all previous knowledge
of in court, and claim to be opposed to themselves. I am also the person
whose persistent complaint (and guidance) finally triggered the civil prosecution
of ‘Amway UK’ in the first place. However, I had called for a rigorous
criminal inquiry into the wider ‘MLM’ phenomenon in the UK, hopefully
leading to the re-establishment of the rule of law, but the regulators had assured
me that this would only take place after the compulsory closure of ‘Amway UK
Ltd.’ using standard civil bankruptcy procedures. Tellingly, they made sure
never to put any of this in writing.
In this way, not only was the luring and exploitation of literally
hundreds of thousands of unwitting UK and Irish victims, resulting in the theft
by deception and laundering of hundreds of millions of £, by the real bosses of
the ‘Amway’ racket quietly brushed under the carpet, but also,
following this isolated and ill-conceived civil prosecution, the bosses of
various, mainly American controlled, ‘Amway’ copycat ‘MLM’
rackets were, by default, given the green light to keep their own corporate
Trojan Horses registered in Britain and continue hiding their real criminal
function. For today, no UK or Irish law enforcement agency (civil or criminal)
is trying to stop them, but then after all these years, it would be highly
embarrassing for the authorities to admit to their ongoing gross negligence,
and significant share of responsibility, in these shameful matters. Furthermore,
some of the unwitting individuals to have proved the most susceptible to ‘MLM’
recruitment have been disgruntled police officers.
So, how can a pile of money be made from a financially
suicidal ‘business model’ that has been deliberately rigged to fail?
In 1967, an American satirical movie offered a memorable
answer to this conundrum. I am of course referring to ‘The Producers,’
written and directed by Mel Brooks. Whilst this movie went over the heads
of certain humourless critics who described it as ‘controversial,’ in 1968 it won
its author an Academy Award for best original screenplay. Indeed by 1996, ‘The
Producers’ had long-since achieved a ‘cult’ status and was deemed to be of such
‘cultural, historic and aesthetic significance,’ that it was selected by the
Library of Congress to be preserved in the United States National Film Registry.
For Mel Brooks’ had presented the world with a classic comedy double act - Max
Bialystock, an outrageous caricature of a once successful, but now failing, New
York Jewish theatrical producer (evidently suffering from Narcissistic Personality
Disorder) played by Zero Mostel, and Leo Bloom, a deeply insecure Jewish
accountant (evidently suffering from Social Anxiety Disorder) played by Gene
Wilder. In the movie, this pair of physically and psychologically opposite
characters come together and perpetrate an absurd swindle - identified by the
accountant and peddled by the producer. By first building a bedazzling fantasy
of boundless future prosperity, happiness and freedom in his
mind, Bialystock overwhelms an initially reluctant Bloom, and persuades him to
become his partner in crime. He then sets to work seducing a flock of wealthy,
but lonely and vulnerable, old ladies. One by one, Bialystock persuades them to
buy a staggering total of ‘25 000% of the projected profits’ from, what
he assures them will be, ‘a sure-fire hit stage musical’ which he and
Bloom are producing on Broadway. However, he doesn’t tell them that the show has
been written by a deranged devotee of Adolf Hitler, Franz Liebkind, or that it will
venerate the ‘führer’ and the ‘Nazis.’ For the show,
‘Springtime for Hitler,’ has been carefully selected by its producers with
the hidden criminal motive of offending a sophisticated New York theatre audience
to such an extent, that it will be doomed to close after only one disastrous
performance. Just to make certain that it will immediately bomb, Bialystock and
Bloom recruit an aggressively kitsch transvestite, Roger DeBris, to direct the show,
and they find a drug-fuelled pacifist-hippie, Lorenzo Saint DuBois (LSD), to play Hitler. On opening
night, Bialystock even makes an enemy of the New York Times theatre critic, by
offering him a bribe.
The devious plan being that, seeing as ‘Springtime for
Hitler’ has cost Bialystock and Bloom only a mere fraction of their available
financing to stage, when inevitably it sinks without a trace, the Internal Revenue
Service will have no reason to investigate Bloom’s fraudulent declaration that ‘no
profit was made.’ Moreover, the old ladies who collectively have vastly
over-financed the show, will believe that they simply made a bad investment.
As ill-informed and isolated individuals, they too will have no reason to
suspect fraud. Thus, Bialystock and Bloom will be able quietly to keep
the large pile of excess finance. However, when despite all their sabotage efforts,
‘Springtime for Hitler’ turns out to be a smash hit predicted to ‘run
and run,’ the producers, along with the show’s author, wind up behind bars. Ultimately,
they are seen duplicating the same fraud on their fellow inmates and the prison
warden, with Bialystock and Liebkind directing rehearsals and Bloom
over-selling ‘shares’ in their latest ‘sure-fire hit production,
Prisoners of Love.’
Now most people would automatically assume that, in the
real world, it wouldn’t be quite so easy to perpetrate essentially the same absurd,
blame-the-victim swindle, albeit hidden behind a far more convoluted and confusing
‘sure fire business model,’ but again one designed to fail. A swindle not
just based on the same, one-off, financially suicidal modus operandi as
described above, but now expanded and duplicated on an industrial scale and
baited to keep ensnaring a much wider range of unwitting victims. Indeed, to
the average person, the idea that numerous gangs of copycat charlatans have
been allowed to keep peddling the same rigged game of ‘commercial’ make-believe
as reality, steadily luring, exploiting, isolating and silencing many
millions of losing investors around the world over a period spanning several
decades, and thereby get away with stealing a veritable mountain of money, would
seem to be beyond the bounds of possibility. However, it should be remembered that
‘the best way of hiding something, is to place it in plain sight and make as
big as you possibly can.’
Thus, I managed to live more than three decades
without ever hearing the made-up technical-sounding phrase, 'Multi-Level
Marketing,’ or its catchy abbreviation, ‘MLM.’ Today, I wish this contagious
nonsense had never entered my life, but unfortunately, I had no choice in the
matter. Whilst reading the history of my own nightmare encounter with the
original 'MLM commercial' cult known as 'Amway' (corruption of 'The
American Way'), bear in mind that, when these disturbing events first started
to unfold, I had no idea of the extraordinary level of danger my family was in,
or of the true nature, extent and power of the phenomenon I was confronted
with. As yet, there was no plain language, comprehensive explanation of 'MLM
commercial' cultism readily available. That’s why I began the thankless
task of compiling one as long ago the late 1990s. However, at that time, I was
still trying to find the right words to identify it accurately. Even when I did
find the right words, I discovered that the ugly, but ultimately absurd, truth
about the 'MLM commercial' cult phenomenon was still totally unthinkable
to most people. The truth being, that what has become commonly referred to as, 'the
MLM business model,’ has been nothing more than a classic example of the
notorious, reality-controlling, totalitarian propaganda tactic known as the
'Big Lie.' That is to say, ‘the spreading of a falsehood which is so colossal
and outrageous that the average person cannot even begin to conceive that
anyone would have the audacity to invent it.’ Indeed, when I first began
to challenge the Big 'MLM' Lie, I was faced with the daunting situation
where it had been repeated, largely unchallenged, so often and for so many
years, that a remarkable number of apparently sophisticated and rational people
had come to accept it as the truth. Thus, rendering them incapable
of admitting to their embarrassing mistake.
The situation is still daunting, but lately it has begun
to change in that, mainly due to the Internet, an increasing number of
courageous 'MLM commercial' cult survivors have found accurate information,
as well as mutual support, enabling them to come forward and describe their
essentially identical, nightmare experiences. Also, whereas in the past many 'MLM'
converts were men, who naturally found it hard to admit to the world that
they'd been duped, lately the majority of persons being lured into, and
exploited by, these pernicious groups, have been women. Furthermore, in 2019,
my American associate, Robert FitzPatrick, published 'Ponzinomics.' In this book,
Robert not only goes a long way towards identifying the true criminogenic nature
of the 'MLM commercial' cult phenomenon, but he also traces the origins and
evolution of the Big 'MLM' Lie and explains how a pair of its earliest creators
managed to obtain the highest-level of protection in the USA. As a result, politically
appointed senior Federal Trade Commission officials effectively raised the
white flag of surrender to predatory criminals, albeit dressed up as respectable
Christian businessmen, when, starting in the 1970s and despite rising
levels of complaint across the USA, they set aside an established, common-sense
legal precedent which had automatically identified and banned all economically
unviable, endless-chain (infinite level) recruitment frauds, previously labelled
as, 'pyramid selling schemes.' For, even though it had been under investigation
for years and was facing civil prosecution, these senior FTC officials eventually
latched onto a convenient pretext not to go ahead and shut-down the
corporate-front for the original 'MLM commercial' cult, upon which all
subsequent versions have been, and continue to be, modelled. This dubious
decision was evidently made, in part, because the bosses of the 'Amway
Corporation,' Messrs. Jay Van Andel and Richard DeVos, with a Bible in one
hand and the Stars and Stripes in the other, had purchased association with
their local congressman (fifth Michigan district) with significant quantities
of stolen money. The beneficiary of these ill-gotten gains was none other than
Gerald Rudolph Ford Jnr. - a politician not exactly noted for his intellectual
capacity, but nonetheless someone of great influence.
For those readers who are perhaps too young to remember
him, Gerald Ford was leader of the Republican party in the House of
Representatives 1965-1973, becoming US vice-president under Richard Nixon when,
in 1973, Spiro Agnew (who was under investigation for corruption), pled guilty to
a minor felony charge and was obliged to resign. Ford went on to become US
president 1974-1976 after Nixon himself was obliged to resign rather than face
certain impeachment over the Watergate scandal. Thus, Ford remains the only
person to have held both the office of US vice-president and US president,
without being elected to either. He is also the president who granted a pardon
to Nixon for the crimes he'd committed whilst in office.
However, the co-opting of Gerald Ford to play the role of
‘Amway’s’ useful idiot was only one step in DeVos and Van Andel’s
well-financed infiltration, and subversion, of the US legislative process and justice
system. Indeed, there can be absolutely no doubt that, culminating in 1979, the
chiefs of an important civil regulatory agency of the US federal government
played politics, and in so doing, completely failed in their appointed task of
protecting the American public. As a direct consequence, the FTC brought about
the birth of the essentially meaningless phrase, 'Multi-Level Marketing is
legal.' In this way, a ridiculous, but nonetheless insidious, endless-chain
(infinite level) recruitment fraud was effectively authorized in the USA
by an unaccountable little clique of self-serving bureaucrats. Furthermore,
this major American regulatory lapse permitted the profitable racket of 'MLM
commercial' cultism not only to be extensively reproduced in the USA, but
also to be exported around the world, now hidden behind the pretence that ‘the
MLM business model (as developed by the founders of the Amway Corporation)’ had
been ‘examined, regulated and approved by the US government… So, anyone calling
it a fraud must be a deranged, hate-filled anti-capitalist or crazy conspiracy
theorist.' Not surprisingly, subsequent generations of politically
appointed senior FTC officials have all refused to admit publicly to their
predecessors' catastrophic failure and their own gross (and in some cases
criminal) negligence; for which, one day, a sitting American government might
find itself liable. In this way, the Big ‘MLM’ Lie was permitted to
transform and expand into a well-oiled machine for stealing and laundering
money on a global scale; each year bringing billions of dollars into the USA,
and all right under the noses of complacent officials who have continued to
allow much of this plunder to be falsely declared, with the paid-compliance of
some of the world's largest accountancy firms, as 'retail sales revenue.'
However, plenty of senior FTC types, as well as high-ranking US politicians, including
a certain Donald John Trump, have all had their snouts planted in this almost
bottomless trough of foreign and domestic loot, set before them by the bosses
of a multiplication of 'Amway' copy-cat 'MLM' cultic rackets
whose essentially identical, camouflaged criminal activities they have
conveniently refused to identify. Indeed, the number of senior FTC officials
who have sold their souls and signed lucrative employment contracts with 'MLM'
front-companies, or law and accountancy firms, co-opted to hear no evil,
see no evil and speak no evil, whilst playing along with the Big 'MLM' Lie,
is truly astonishing.
All this begs the not unreasonable question: other than
enabling a growing number of unoriginal gangs of devious con artists to get
away with thieving from the entire planet for the best part of half a century,
what exactly has been the point of having such a spineless, easily-corrupted
and, therefore useless government agency as the FTC?, when in 'Ponzinomics,' simply
by telling the truth, one independent American does far-more to protect his
fellow citizens from the Big 'MLM' Lie, than the entire one thousand
five hundred+ FTC staff (including more than five hundred attorneys and seventy
economists, with an annual budget of hundreds of millions of dollars) have ever
done. In fact, Robert explains in great detail why, completely contrary to the
ambiguous official message broadcast by the FTC for decades, it has not just
been ‘a few bad apples,’ but all 'Amway' copy-cat so-called 'MLM
income/business opportunities' that have been centrally controlled ‘rigged-market
swindles,’ hiding their inevitable, effectively 100%, overall net-loss/churn
rates of endless-chains of transient losing investors. For the crack-pot
pseudo-economic theory which has been falsely-labelled the 'MLM business
model,' was maliciously designed to be flawed-financially, to the point
where it would be impossible for any so-called 'MLM' company to derive
the majority of its revenue lawfully from persons who are not unwitting
contractors of it, motivated by the false expectation of a future reward.
In even more accurate terms, 'MLM commercial' cults have all comprised groups,
and sub-groups, of susceptible individuals who have been subjected to identifiable,
co-ordinated devious techniques of social, psychological and physical
persuasion designed to shut down their critical and evaluative faculties, and thereby
convert them, without their fully informed consent, to the self-perpetuating
and self-gratifying, but ultimately self-destructive, delusional belief that: endless
recruitment + endless purchases by the recruits = endless prosperity for the
recruits. For this reason, Robert FitzPatrick coined the word,
'Ponzinomics,' in an attempt to place an appropriate label on the financially suicidal
activity that, to their eternal shame, generations of senior FTC officials,
their advisers and political masters, have permitted to be passed off and
normalized around the world as, ‘a viable and legal part of the direct
selling industry.'
Thus, 'Ponzinomics' can be briefly defined as the
dark art of peddling unwitting persons infinite shares of their own
finite money, because what the FTC has consistently refused to acknowledge
publicly, is the undeniable fact that any claim, or implication, that one
penny of extra net-income, let alone life-changing sums
of money, can be generated lawfully by participating in an 'MLM income
opportunity,' is dangerous comic-book nonsense designed to entice and deceive.
Indeed, it should be glaringly obvious that the Big ‘MLM’ Lie is
far-too-good to be true, whilst it's no secret that what used to be the
traditional direct selling industry (once known as ‘door-to-door peddling’),
has long-since died out. Its demise being due to many evolving social and
economic factors; not least the arrival of supermarkets, hard-discount stores
and online shopping. Furthermore, 'MLM' products/services have been
offered at fixed, often exorbitant, prices, rendering them effectively
unsaleable on the open market to persons with fully functioning critical and
evaluative faculties; whilst no so-called 'MLM' company has ever set
common-sense limits on the number of contractors being recruited, or on the
areas of population where these so-called 'distributors/direct sellers'
are supposed to find customers. Just imagine what would happen if the
bosses of McDonalds fixed the price of their company’s hamburgers at twice that
of their competitors and set no limits on the number of franchises they sold,
or any restrictions on the locations where all these demonstrably unviable catering
establishments were supposed to operate shoulder to shoulder?
Once the utter absurdity of the so-called 'MLM
business model' is fully understood, anyone with a modicum of common-sense,
and/or the most-rudimentary hands-on experience of commerce, ought to be
immediately able to deduce that no ‘Amway’ copy-cat front company can
ever have been, or will ever be, found by the FTC (or any other civil, or
criminal, law enforcement agency for that matter) voluntarily disclosing the
true results of its economically incestuous activities and operating lawfully.
Indeed, this ongoing situation is beyond farcical, because when asked the most
obvious of questions, it goes without saying that American regulators and their
academic advisers, have never been able to come up with one solitary example of
a so-called 'MLM' company that would be able pass independent rigorous
inspection. Yet despite the lengthy list of common-sense reasons proving that
there can be no such thing as ‘a viable and lawful MLM income opportunity,' FTC
officials, guided by a cabal of smug dunces with diplomas, came up with a truly
pointless and stupid ‘test.’ This boils down to them throwing
common-sense out of the window whilst laboriously trying, on rare occasions and
on a case-by-case basis, to prove that a so-called 'MLM' company, suspected
of being a pyramid scheme, has not been deriving the majority of its income
lawfully from authentic retail sales (based entirely on value and demand) to
members of the general public (persons who were not unwitting believers of the Big
‘MLM’ Lie motivated by the false expectation of a future reward).
Today, the failure of American regulators to do their job
and protect the public, has brought about a tragicomic situation where, since
1979, less than forty ‘Amway’ copycats have been investigated and shut
down by the FTC as dissimulated pyramid schemes, whilst hundreds more have
continued to appear, but without the slightest attempt to stop them. Laughably,
FTC officials have listed other ‘pyramid scheme red flags' for the public to
look out for, and the agency has even posted warnings that 'MLM companies
have caused, and are still causing, extensive damage to consumers, because some
MLM income opportunities are pyramid schemes in disguise.' At the same
time, American regulators, without the slightest concern for the extensive
damage they themselves have caused and are still causing, have continued bleating
the Big Lie, by insisting that 'MLM is a legal branch of the
direct selling industry.' Yet no one at the FTC has ever seen a
shred of quantifiable evidence proving that this ridiculous adult fairy
story can be true. In fact, when asked in the most specific of terms, if they
have ever seen such evidence, like income-tax payment receipts, it has been
impossible to get any meaningful, let alone the only truthful, response to this
simple ‘yes/no’ question. Another highly revealing question that FTC types have
obviously shied away from answering, is: what would be your own reaction if a vulnerable
individual you care about suddenly underwent a radical personality
transformation, and declared that he/she had signed up for a so-called 'MLM income
/ business opportunity?'
Consequently, in respect of their Orwellian refusal to
tell the truth publicly, and identify this text book example of a Big Lie,
Robert FitzPatrick has compared the inflexible attitude of FTC officials, and
their advisers, to a body of humourless scientists who have been paid to investigate
the manifestly preposterous claim that 'pigs might fly,' but
after decades of examining an assortment of wingless swine, they still insist
on continuing their futile, but financially profitable, quest whilst
systematically refusing to consider even the suggestion that there can be no
such mythical creature.
At this point, I should perhaps declare that, although I
am an 'MLM commercial' cult survivor, I was never an adherent of one of
these pernicious groups. Unfortunately, I found myself shackled financially to
a person, my only brother, who at a time of vulnerability, had fallen completely
under the spell of the Big 'MLM' Lie. Again, when these disturbing events
started to unfold, I did not fully understand that my brother was perfect prey
to be lured and defrauded, then used as bedazzled-bait to lure and defraud
others; all for the benefit of a little gang of sanctimonious American
billionaire-charlatans posing as 'Compassionate Capitalists,' and whom
he had never met. Yet my brother was an ideal subject to be deceived, for the
simple reason that he was completely convinced that he was far too smart to
be deceived. Sadly, once enslaved inside the ‘MLM’ trap, the most
powerful weapon in the hands of the manipulative criminals exploiting him, was
my brother’s own mind. However, initially I failed to grasp just how dangerously
deluded and devious 'MLM commercial' cult adherents can be. That said,
like many people whom they approach, I immediately realised that they are
living in a parallel reality, completely obsessed with trying to recruit you
into what is quite clearly a pyramid scheme, but which they insist is 'part
of the legal MLM direct selling industry and definitely not a pyramid scheme.'
What took me much longer to fathom, is that core-'MLM commercial' cult
adherents are also living by a parallel, and perverted, code of morality. Their
destructive behaviour is controlled by the self-righteous guided-delusion that,
by recruiting you, and even by lying to you, they are ultimately helping both
themselves and you to achieve future redemption in a secure Utopian existence -
a form of Capitalist Paradise on Earth - where no one has a job, but
everyone is his/her ‘own boss’ - a happy, healthy, prosperous and free 'MLM
business owner.'
Thus, it should always be remembered that chronic 'MLM'
adherents' belief can be quite genuine, but what they believe in, and have
bought into body and soul, is a colossal and bedazzling fake. The irony of all
this being, that the Big 'MLM' Lie has continued to thrive, because its most-fanatical
adherents have been tricked into wasting their own time and money spreading it
and hiding the truth about it, combined with legislators’, law enforcement
agents’, prosecutors’ and judges’ catastrophic failure to identify it
accurately. Although they have no idea what they are really involved in, active
'MLM' adherents are, in fact, proselytising-evangelists for a camouflaged,
non-rational, ritual belief system (call it a 'perverted religion' if you like)
which has been maliciously designed not only to spread like a contagion - enticing,
deceiving, robbing, exploiting and abusing susceptible individuals and their
friends and families - but also to load its victims with shame and guilt for
their inevitable failure to succeed, and thus, prevent them from facing reality
and complaining. Consequently, whilst they remain under the control of the Big 'MLM'
Lie, its most-dangerous adherents should be seen for what they
really are - the deluded deployable agents of a de facto syndicate comprising
the bosses of some the most widespread, socially, psychologically and
financially destructive organized cultic crime groups to have emerged in recent
history.
David Brear (copyright 2026)
So, if criminals hide behind legally registered companies, fraud gets treated as a civil matter?
ReplyDelete