'Multi-Level Marketing (MLM)' - What happened when Bill Ackman challenged 'Herbalife.'

Around the world during the past several decades, it has been regularly observed that, as a result of unprotected exposure to one of an ever-growing number of copycat companies all offering what their bosses have labelled ‘Multi-Level Marketing income/business opportunities,’ almost anyone can suddenly start behaving in a strange, but remarkably uniform, way. It’s as if they have fallen head over heels in love or even taken some sort of drug. Although this initial euphoric state is often short-lived, a significant minority (those with access to sufficient funds and/or credit) will undergo a prolonged, radical personality transformation; recklessly committing all their resources (mental, physical, social and financial) to the benefit of persons previously unknown to them, whom they continue to trust and follow no matter what suffering this entails. It has also been regularly observed that individuals whose bodies and souls have been taken over in this way, but who have eventually managed to break with these so-called ‘Multi-Level Marketing’ companies and confront the painful reality that they’ve been systematically deceived and exploited, are not only destitute and dissociated from their previous social contacts, but they can also exhibit chronic psychological deterioration symptoms, generally indicative of the victims of abuse. These include depression and overwhelming feelings (guilt, grief, shame, fear, anger, embarrassment, etc.), inability to make decisions, suicidal thoughts, panic/anxiety attacks, extreme identity confusion, inability to trust, etc. However, the number of broken relationships, actual suicides and premature deaths resulting from unprotected exposure to so-called ‘Multi-Level Marketing’ companies, has never been accurately evaluated.

Bill Ackman

Recently I was asked by a journalist if I could help him to understand what happened when Bill Ackman challenged the so-called 'MLM' company known as 'Herbalife,' and particularly why the Federal Trade Commission refused to prosecute and close this company as a pyramid scheme.

These videos linked above begin to explain Bill Ackman's involvement in the ongoing saga of the Big 'MLM income/business opportunity' Lie. However, Ackman's spectacular late arrival on, and much quieter subsequent departure from, this tragicomic scene, came as a complete surprise to many seasoned observers. Not least myself.

In reality, despite what is implied in the first video, this was not Ackman's idea. He was sold the idea of short-selling 'Herbalife' by two ex-Bloomberg journalists who ran a company called 'Indigo Research.' However, prior to Ackman's involvement, the two so-called 'Indigo Girls' had been in contact with various observers of the 'MLM' phenomenon, including me, but they never disclosed who they were working for. Thus, the research and analysis they passed to Ackman was far from being original and entirely their own intellectual property.

In the week that Ackman announced his trade in 2012, I called his office and spoke to him at length, but for obvious reasons, prior to this conversation, he had never heard of me. It was my opinion at that time, that he was making a fundamental mistake by challenging only 'Herbalife,' rather than the entirety of the Big 'MLM income/business opportunity' Lie. However, Ackman told me that he was following the instructions of his attorneys.

Ackman was convinced that the Federal Trade Commission was now filled with honest agents who would face reality and close 'Herbalife' as an obvious pyramid scheme, and that he would easily win his 1.3 billion $ short-selling bet. He was completely unaware of what had happened in the UK, when civil trade regulators had attempted to close 'Amway UK Ltd.' 

At this time, Ackman was oblivious of the fact that the so-called 'MLM business model,’ has been nothing more than a textbook example of the notorious, reality-controlling, authoritarian/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.’

Interestingly, after briefly engaging with me, in subsequent media interviews, Ackman began referring to the 'Nazi' concept of the Big Lie, in his attempts to explain how 'Herbalife's' bosses maintain control of their adherents' reality. Yet laughably, during these same interviews, Ackman kept thoughtlessly repeating elements of the 'commercial' cover story which hides all 'MLM' cultic rackets. Thus, without detailed qualification or irony, he still kept calling 'MLM' a 'business' and 'MLM' de facto slave recruiters, 'distributors.'

The explanation of why Ackman's confidence in the FTC was naive and misplaced, and therefore, why he had zero chance of winning his 1.3 billion $ short-selling bet, is contained in the following text.

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The Big 'Multi-Level Marketing' Lie.

(Once an absurd American swindle: now a contagious global delusion)

Introduction

In January 2006, a UK government regulatory agency, the ‘Company Investigation Branch’ of the ‘Dept. of Trade and Industry,’ launched what was described as, ‘a major law enforcement action’ against ‘Amway UK Ltd.’ However, this privately owned British company, first registered as long ago as 1973, was just one of multiple, expendable ‘affiliates’ of an American-based, privately owned, multinational, parent corporation. The UK regulators were, in fact, about to challenge (albeit indirectly) the legality, and indeed the very nature, of a colossal corporate edifice of mind-numbing structural complexity. The architects, and self-appointed rulers, of which have comprised the members of two families, DeVos and Van Andel. Indeed, the UK regulators had been made aware that this pair of Dutch Protestant American dynasties have counted their wealth in billions of $, enabling them to buy the protection of not only an army of attorneys and accountants, but also that of the highest ranks of the US political establishment. Furthermore, before any investigation began, the regulators had also been explicitly warned that behind its kitsch ‘commercial’ camouflage, the organization they would be challenging was neither original nor unique, so therefore, it could not be fully understood in isolation. The deceptive foundations of all this were first laid in the USA back in the 1950s when it was known as, the ‘Ja-Ri Corporation.’ By the 1960s it had become the ‘American Way Association’ then the ‘Amway Corporation,’ and since 1999 also known as, ‘Alticor,’ but it has usually been referred to just as, ‘Amway.’

In April 2007, after fifteen months of investigations, John Hutton, the Business Secretary (trade minister) in the Labour government of Gordon Brown (Tony Blair’s successor), 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 contravening the ‘UK Fair Trading Act 1973’ and the ‘UK Lotteries and Amusements Act 1976,’ by running what was described as, ‘an inherently objectionable dream-selling scheme… targeting vulnerable, gullible and deluded persons.’ However, this was far from being an appropriate official response to, what had been discovered. For this standard civil ‘insolvency’ procedure covered up the embarrassing reality that, for more than thirty years, a highly organized, foreign controlled, criminal racket had been allowed to operate in Britain and Ireland, masquerading as a ‘legitimate commercial enterprise,’ whilst every domestic law enforcement agency (civil and criminal) had ignored it.

At the pre-trial stage, two more, privately owned British companies, ‘Britt World Wide UK Ltd.’ and ‘Network TwentyOne UK Ltd.,’ ostensibly run by persons styled as, ‘Amway Diamond Distributors,’ were included on the bankruptcy petition accused of being an integral part of the same civil offences. Again, these were expendable ‘affiliates’ of wealthy, American-based, family 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 follow suit, should the petition against ‘Amway UK’ be granted. Another British company, ‘International Business Systems UK Ltd.’ (again, ostensibly run by persons styled as, ‘Amway Diamond Distributors,’ and an expendable ‘affiliate’ of a wealthy, American-based, family owned, multinational parent corporation), had also been a prime target for investigation, but since this corporate structure had quickly ceased ‘trading,’ it never even made it onto the petition.

Eight months later, the UK government’s isolated civil prosecution of ‘Amway UK’ came to court in a hearing which the regulators insisted ‘would not be open to the public.’ These proceedings took place over eight days at the end of November and beginning of December 2007. The government was represented by barristers, Mark Cunningham QC (Queen’s Counsel) and Andrew Westwood, instructed by the Treasury Solicitor. ‘Amway UK’ was represented by David Chivers QC and Philip Gillyon instructed by Eversheds LLP. Sadly, although some of the shocking superficial facts of the government’s case were reported by certain media outlets, including ‘The Times,’ no journalist bothered to dig deeper into what was far from being an ordinary story. For it never came out in court that America’s celebrated leading authority on racketeering, professor of law George Robert Blakey (who was still alive in 2007), had previously drafted a report in which he identified ‘Amway’s business’ as, being ‘run in a manner that is parallel to that of major organized crime groups, in particular the Mafia.’ Whilst the UK regulators (who had been supplied with a copy of Prof. Blakey’s expert opinion) privately acknowledged the prosecution to be the result of ‘the largest ever investigation of a British company.’ Indeed, several 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 ‘Company Investigation Branch’ agents led by Peter Bott. However, after looking beyond a wall of mind-numbing mathematical, and linguistic, hocus-pocus, Bott and his colleagues 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 British company had always been haemorrhaging financially, for some obscure reason, its billionaire American bosses had been keeping it alive with regular cash transfusions declared in its accounts as, deriving from ‘Amway’ subsidiaries in Europe and Asia. In fact, a lot more external funding was now urgently required just to cover ‘Amway UK’s’ mounting legal costs. Obviously, the UK regulators were powerless to establish the full truth of where all this magical money originated, because they did not have access to the independently audited, financial records of foreign registered companies. Yet for decades, ‘Amway UK’s’ corporate officers had been allowed to use this opaque, endless supply of cash to create and maintain the enticing illusion that they were running ‘Britain’s most successful direct selling company, offering ordinary people a perfectly 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 previously boasted of fifty+ million £ of ‘annual sales of products and services,’ via an expanding ‘salesforce’ rapidly approaching one hundred thousand persons in the UK and Ireland, the regulators had now discovered that, in the adult world of quantifiable reality, at any given moment during 2005 and 2006, ‘Amway UK’ had counted less than forty thousand so-called ‘distributorships’ registered on its books, whilst the company had lately been declaring ‘annual (net-loss) sales’ of around ten million £.

Meanwhile, behind all these misleading, and ultimately meaningless, labels and snapshot figures, an astonishing truth was lurking. For ‘Amway’s’ unremarkable merchandise was found to have always been priced (even before any profit margin was added) at a level which made it effectively unsaleable on the open market. Whilst the average churn rate for participants in ‘Amway’s’ scheme, had always exceeded 50% per year. Consequently, it was possible to extrapolate from the available data that (since many of these temporary so-called ‘distributorships’ were formed by couples) around one million recruits had, in fact, gradually passed through ‘Amway UK’s’ lowest ranks 1973-2006. Indeed, without their fully-informed consent, all these people had been persuaded to sign 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, pay-to-access, internal system of dispute resolution. Yet, for obvious reasons, after the deduction of all their inevitable costs, not one of this endlessly expanding flock of would-be entrepreneurs had managed to generate so much as a penny of overall net-income lawfully by regularly retailing fixed-priced, ‘Amway’-supplied merchandise for a profit to persons who were not fellow so-called ‘Independent Business Owners.’ 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 for unwitting investors in this dissimulated rigged-market, had been effectively 100%. However, the fact that ‘Amway’s’ crackpot scheme was, by design, a financially suicidal swindle, but few people had come forward to complain about it, 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 external 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 enticing bait in a heavily disguised human trap. Yet, 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, foreign-controlled mechanism had been permitted to pump out a steady stream of fraudulent (‘anyone can start his/her own independent business and achieve financial freedom’) 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 the equivalent of no more than a few thousand $, a significant minority (around 5%) had been able to remain in the trap for extended periods, recklessly wasting the equivalent of tens of 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 ‘Amway’s’ so-called ‘income/business opportunity,’ had always been a pernicious fake (designed not only to relieve its victims of their time and money, but also to trick the most vulnerable of them into becoming chronically deluded de facto slave recruiters), 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 a full and accurate summary of what was contained in the lengthy, ambiguous and impossibly naïve, jargon-laced 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 initially seemed to be acting in the interest of the public, by applying common-sense and accepting that the government’s case against ‘Amway UK’ had been brought on valid grounds, he then got lost in the mind-numbing labyrinth of legally ‘independent’ companies and mathematical, and linguistic, hocus-pocus, and somehow managed to conclude that, 'on balance,’ the public interest bankruptcy petition could be declined, and no other penalty imposed.

Regrettably, in his ruling the judge also completely failed to spot the far-reaching implications contained in some truly jaw-dropping evidence provided by Richard Berry, the senior corporate officer of another legally ‘independent,’ privately-owned company, the so-called ‘UK Direct Selling Association,’ of which ‘Amway UK’ had, in fact, been the leading member and significant source of funding. 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.’ Furthermore, at this moment time, the ‘Amway Corporation’s’ fraudulent propaganda claimed ‘three million independent businesses’ worldwide. Whilst the so-called ‘UKDSA’s’ own fraudulent propaganda claimed four hundred thousand+ ‘direct sellers’ under contract to ‘Amway UK’ and its other (mainly ‘MLM’) member companies. However, to maintain the enticing illusion of legitimacy, viability and sustainability, the key data required to extrapolate the hidden, overall, effectively 100%, net-loss/churn rate for ‘MLM’ participation, did not feature in either of these essentially identical, nonspecific, comic-book narratives.

Yet although it was staring him in the face, the truth that ‘Amway’ is by no means unique, and that (just as Prof. Blakey had once attempted to explain) ‘Amway’s’ entire multinational operation has always been a textbook example of a Mafia-style criminal racket - a mass-deception disguised as a ‘legitimate commercial activity’ and organized behind a colossal, and deliberately confusing, protective front of legally ‘independent,’ but in fact interdependent, centrally controlled, corporate structures, maliciously designed to prevent, and/or divert, investigation and insulate its billionaire crime-family bosses from liability, was evidently unthinkable to Judge Norris. Consequently, his dubious decision to reject the UK government’s public interest bankruptcy petition, rested on his first swallowing the defence’s preposterous argument that, although ‘Amway UK’s’ unlawful ‘business model’ had ‘remained more or less unaltered for over thirty years,’ in order to comply with UK trading scheme and lotteries legislation, ‘Amway UK’s’ current company officers had now (only when finally faced with civil investigation and prosecution) given solemn ‘undertakings’ to the High Court that the previous '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 actually compared ‘Amway’s’ so-called ‘network leaders’ to ‘gang masters,’ and even observed that due to price-fixing and an emphasis on recruitment rather than selling, ‘Multi-Level Marketing schemes risk being exploited as pyramid schemes’) was ultimately based, not on the abundance of quantifiable evidence proving beyond all reasonable doubt that, by design, it had always been impossible to generate an overall net-income lawfully in ‘Amway UK’s’ financially suicidal, endless-chain (infinite level) recruitment fraud, but on the false-assumption that because they have existed for so many years and are so widespread, ‘Multi-Level Marketing schemes’ must be a legitimate form of commercial enterprise.

This fundamental gaffe then enabled Judge Norris to swallow the resulting 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 largely responsible for making ‘unobtainable earnings claims’ and running the ‘inherently objectionable dream selling scheme,’ and that these were ‘unauthorized activities’ that ‘Amway UK’s’ company officers had claimed to be opposed to, albeit unaware of, but had now (with the guidance of the regulators) identified and taken steps to prohibit. However, even the wide-eyed Judge Norris felt obliged to place on record his own lingering doubts that ‘Amway UK’s’ modified version of its commercial cover-story was entirely 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’ colossal labyrinth of legally ‘independent,’ but in fact interdependent front companies, and received the lion’s share of the mountain of cash thieved and laundered by this highly organized Mafia-style 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 the 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 a handful of other British ‘Amway gang masters’ had been committing. Yet for years, these smiling charlatan-couples had starred in ‘Amway UK’s’ fraudulent propaganda and had been worshipped and revered by the bedazzled ‘Amway’ faithful, as prosperous ‘Diamond Distributors’ and ‘Top Earners’ who had ‘discovered the secrets of how to achieve unlimited wealth and success.’ Furthermore, the Scrivens and the Gregorys had also been portrayed by ‘Amway UK’ as selfless ‘positive thinking’ role models prepared to share their life-transforming secret knowledge with others (for a price), in the form of ‘a proven two-to-five-year plan to achieve total financial freedom.’ However, 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 UK law enforcement agents, or tax compliance officials, demanding to know where the bulk of the 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' corporate officers. Yet, mysteriously, neither the Scrivens nor the Gregorys were called as witnesses to perjury 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 apparently 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 - hundreds of millions of £. They also knew that there was plenty of documentary evidence, as well as other far more reliable witnesses, proving that ‘Amway UKs’ company officers had simply pretended affinity with the regulators and recited established passages from their billionaire bosses’ Mafia-style play book.

In fact, some of the most damning documents recovered by the regulators, were contracts, dating back to the 1990s, proving that the corporate officers of ‘Amway UK’ had paid ‘consultancy’ fees to the directors of two so-called ‘UK cult advice charities.’ The regulators knew that, over the years, this pair of self-styled ‘cult experts,’ Ian Haworth and Graham Baldwin, had been approached by a significant number of distressed ‘Amway’ victims seeking guidance. Rather than directing these vulnerable people to the authorities and journalists, or to their political representatives, Haworth and Baldwin had taken them back to ‘Amway’ where they had been persuaded to accept ‘refunds’ in return for signing gagging agreements. Thus, preventing, a significant number of witnesses from coming to light in the UK. Yet, mysteriously, none this evidence was produced and, as far as I’m aware, neither Haworth nor Baldwin were interviewed by UK law enforcement agents, wanting to know how many ‘Amway’ victims had been silenced in this devious manner, or how they could now be contacted.

The reason why I know all this, is because I am someone who, in 1997, was libelled in two poisonous letters circulated by ‘Amway UK’s’ legal representatives. These documents, which the regulators were aware of, sought to destroy my credibility by falsely portraying me as a deranged fantasist motivated by money, and threatened me with a nonspecific lawsuit, for speaking out about the very same abusive criminal activities which, ten years later, ‘Amway UK’s’ senior company officers were allowed to deny all previous knowledge of and pretend to be opposed to themselves. Indeed, the regulators also knew that this was by no means the only attempt to silence me and hide the truth. For 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 commercial’ cult phenomenon in the UK, hopefully leading to the protection of the public and the re-establishment of the rule of law, but the most-senior regulator involved, the UK’s ‘Deputy Inspector of Companies,’ Cliff Callaghan, had personally assured me that this would take years and cost millions of £, and could, therefore, only happen after the compulsory closure of ‘Amway UK Ltd.’ using relatively inexpensive, standard civil bankruptcy procedures. Tellingly, he 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 citizens over a period spanning several decades, resulting in the theft by deception and laundering of hundreds of millions of £, by the billionaire bosses of the ‘Amway’ cultic racket quietly brushed under the carpet, but also, following this isolated and ill-conceived, low level, civil prosecution, the wealthy bosses of various, mainly American controlled, ‘Amway’ copycat, ‘MLM’ cultic rackets were, by default, given the green light to keep their own corporate Trojan Horses registered in Britain and continue hiding their insidious criminal function. For today, no UK or Irish law enforcement agency (civil or criminal) is trying to stop them, but then it would be more than just embarrassing for the authorities to admit to their gross negligence, and share of responsibility, in enabling this shameful situation to develop and persist. Indeed, some of the unwitting individuals to have proved the most susceptible to recruitment into deluded de facto ‘MLM’ slavery have been disgruntled police officers. Furthermore, various gullible politicians have apparently believed that the UK has been deriving a considerable financial benefit from what is clearly foreign controlled, ongoing major racketeering activity. For, starting with ‘Amway UK,’ various, copycat, UK registered, ‘MLM’ front companies have been collecting ‘Value Added (sales) Tax’ on the internal purchases of their own adherents, making these losing investment payments (motivated by a false expectation of a future reward) appear to be retail transactions (based entirely on value and demand). This partly explains why, in 1997, the UK’s new Prime Minister, Tony Blair, was persuaded to make a highly misleading video of ‘support’ for ‘Amway UK’ and the other (mostly ‘MLM’) member companies of the so-called ‘UKDSA,’ in which (avoiding the term ‘MLM’ and any individual company name) he confidently stated that: ‘We’ve got something like thirteen percent of the entire home market, which is done by direct selling, and almost half a million people involved in direct selling, forty thousand of those doing it full time… we as a government recognize the tremendous contribution that people who are taking up these opportunities can make to the overall prosperity of the economy.’ Yet, apparently under the illusion that he was telling the truth, Blair was merely reciting an absurd cocktail of outrageous lies and ambiguous, nonspecific, scripted nonsense, designed not only to promote a form of pernicious mass-deception, which has caused (and continues to cause) extensive damage to the UK economy, but also to make it appear that ‘MLM’ schemes cannot possibly be frauds. Thus, Prime Minister Blair was playing the role of useful idiot.

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 confusing, and ultimately incomprehensible, ‘sure fire business model,’ but again one controlled by crooks who have deliberately designed it to fail. A swindle not just based on the same, relatively simple, one-off 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, essentially identical gangs of 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 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 formulating one as long ago the late 1990s. However, at that time, I was still struggling 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 textbook example of the notorious, reality-controlling, authoritarian/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 have accepted it as the truth. Thus, rendering them incapable of admitting to their embarrassing gaffe - Alastair Norris and Tony Blair, being perfect examples. For unfortunately, it is human nature for us to try to justify our previous behaviour, no matter how gullible and foolish we might have been.

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 of the most-fanatical 'MLM' converts were men, who naturally found it hard to admit to the world that they'd been duped, lately the majority of unwitting 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, almost by chance, a pair of its earliest preachers 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 concern across the USA, they set aside an established, common-sense legal precedent which had automatically identified and banned all commercially 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, and convoluted, 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 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 not only developed the devious tactic of pretending affinity with the regulators, but they’d also 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 be the first high ranking US politician to act 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 other high-ranking US politicians, including a certain Donald John Trump, have all had their greedy snouts planted in this almost bottomless trough of foreign and domestic loot, set before them by the wealthy 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 cultic 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 the temporary 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 coercive, 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 (‘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, contrary to all commercial logic, unremarkable (and in some case useless) 'MLM' products 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’ copycat 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, ever-shifting, 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 commercially viable and lawful MLM income/business 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 running a commercially unviable, dissimulated pyramid scheme (‘rigged market swindle’), has not been deriving the overwhelming 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, temporary adherents of the Big ‘MLM’ Lie motivated by the false expectation of a future reward).

Today (2026) with notorious ‘MLM’ promoter, Donald Trump, still sat in the White House and in control of the FTC and Dept. of Justice, the ongoing chronic failure of American regulators to do their job and protect the public, has resulted in the 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 textbook example of a Big Lie, Robert FitzPatrick and I have openly ridiculed these inflexible FTC officials, and their equally inflexible advisers, by comparing them to a body of humourless scientists who have been paid to investigate the manifestly preposterous claim that 'pigs might fly.' However, after decades of examining an assortment of wingless swine, all labelled as ‘flying pigs,’ they still insist on continuing their futile, but financially profitable, quest whilst systematically rejecting any 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 exploited adherent of one of these pernicious groups. I was, however, an indirect victim. For regrettably, 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 chronically 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 totally 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 criminals exploiting him, was my brother’s own mind. However, initially I failed to grasp just how dangerously deluded '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 ridiculous 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, financially suicidal 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, dualistic 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 2021)