The 'Direct Selling Association (DSA)' is a big lie.

I have been asked to re-post this article from 2013.

Today in the USA and elsewhere, due to many factors (not least supermarkets, discount stores and the Internet) virtually no one buys consumer goods on the door-step.

Historically, door-to-door selling (or what used to be known as peddling) was a very common way of doing business in the USA, but at the start of the 20th century, its image was blighted by fly-by-night quacks and charlatans. In an age when most women did not go to work, and even the middle-class had servants to cook, clean and receive visitors, door-step products were invariably cheap and cheerful, and aimed at ordinary housewives. 

From just before WWI until the 1960s, the 'Direct Selling Association' was a national trade association in the USA that represented (and was only financed by) a number of generally-reputable commercial companies of various sizes. These used to generate profits by regularly selling everyday goods (usually perfumes, cosmetics, costume jewellery, household products, books, etc.) directly to the general public through salaried, and/or non-salaried, commission agents. Although unethical, high-pressure sales tactics were increasingly used by new, and less reputable, DSA members, in their traditional format, direct retail transactions were authentic and lawful, because they were mostly-based on value and demand. Furthermore, the DSA members originally tried to keep fly-by-night quacks and charlatans at bay, and, at one time, they agreed that, like political constituencies, commission agencies for any particular company, should be limited in given geographical/population areas. This prevented counter-productive internal disputes amongst the sales-force and enabled individual sellers to have a fair chance of finding sufficient loyal customers to make a decent living. 

Today, when examined in splendid isolation by casual observers, the self-proclaimed activities of the corporate structures still known as 'Direct Selling Associations' can appear to be the same as above, and entirely lawful. However, when the wider-evidence is rigorously examined, during the second half of the 20th century (as door-to-door selling gradually died out in the USA and elsewhere) the membership of 'DSAs' came largely to comprise an ever-growing number of so-called 'Multi-Level Marketing' companies ('Amway', 'Herbalife', 'Nu Skin', 'Forever Living Products', etc.) which have been used to dissimulate vast closed-market swindles or pyramid schemes. The manipulative criminals behind these legally-registered counterfeit commercial companies, have acquired their wealth by steadfastly pretending moral and intellectual authority, whilst deceiving an endless-chain of victims (now comprising many millions of individuals around the globe) into making regular losing-investment payments in exchange for effectively-unsaleable wampum (i.e. banal, but grossly-overpriced products, often of a dubious pseudo-scientific nature with highly-exaggerated, and/or miraculous, claimed benefits which cannot be quantified). These unlawful transactions, already totalling many billions of stolen dollars, because they were actually based on the false-expectation of future reward, have been laundered as lawful retail sales based only on value and demand. 

The outrageous 'MLM direct selling' lie, has been hiding in plain sight for so long: that many people now not only accept it as the truth, but they will laugh out loud at rational persons suggesting that, in reality, so-called 'MLM recruiters' are adherents of the crackpot, but nonetheless economically-suicidal fairy story that  endless recruitment + endless payments by the recruits = endless profits for the recruits. 

It is, however, important for readers to distinguish between short-term and chronic, core-believers in the 'MLM income opportunity' myth. The overwhelming majority of people who have been taken-in by 'MLM,' quit within a short time, usually because they find it impossible to convert, and/or maintain, other contributing recruits, and/or they have no cash, or credit, to continue contributing themselves. Since they were invariably recruited by a friend or relative, they have little reason to complain, and they wouldn't know exactly what to say, or where to complain, anyway. 

The hidden annual roll-over rate in groups like 'Amway', 'Herbalife', etc., has always been well in excess of 50% and lately, around 90%. Those who have persisted for more than 3 years, is certainly no more than 5%. However, if you ignore the insignificant number of charismatic, grinning shills at the top of the pyramids, the overall hidden churn/loss rate in so-called  'MLM income opportunities,' has always been effectively 100%. Thus, the constant public-proclamations by the leaders of the largest, long-established groups like 'Amway'  that their sales-force has always been expanding for decades and lately comprise 'millions of Independent Business Owners,' is a grotesque, criminal distortion of ever-shifting reality. 

There has been a significant minority of chronic 'MLM' proselytizers, with access to cash or credit, who continue as de facto slaves to the lie, sometimes for more than 10 years. In many cases, these dangerously-deluded, self-righteous persons will do, or say, anything to sign-up, and/or maintain, recruits - convinced that they will only achieve total financial freedom by helping others to achieve it. They are indoctrinated to ignore their mounting losses/debts and to commit everything they can get their hands on. Some even steal from their friends and families, and/or deprive themselves, and/or their families, of food, heating, etc. In the very worst cases, gung-ho 'MLM' adherents known as 'Road Warriors' have been indoctrinated to go without sleep and have ended up dead at the wheels of their cars - crashing whilst en route to late-night recruitment meetings. Fanatical 'MLM' addicts have generally been compared to chronic gamblers, but I have called them 'financial anorexics.'  When finally such persons have confronted external reality, they have have exhibited chronic psychological deterioration symptoms.

Once the relatively-simple, underlying modus operandi of blame-the-victim 'MLM income opportunity' fraud is clearly understood, the tightly-scripted, reality-inverting activities of the 'DSAs' form part of an overall pattern of ongoing, major racketeering activity (as defined by the US federal Racketeer Influenced and Corrupt Organizations Act 1970). Tellingly, the 'DSAs' (which pose as rigorous and ethical self-regulators vehemently opposed to pyramid schemes), have long-since ceased to set, let alone enforce, any common-sense limit on the numbers of commission agencies being created by members.

http://www.youtube.com/watch?v=hh6z1hP4H0o

The corporate officers of the American 'DSA,' like Joe Mariano (whose salaries have been paid with stolen money), are, in fact, committing wire fraud and attempting to obstruct justice when they make the following, demonstrably false, and/or selective, and/or essentially meaningless, statements on their own Website; for even their use of the term, 'Direct Selling,' is a monstrous hoax:

'Washington, D.C. (Jan. 29, 2013) - Following the Jan. 28 announcement that an enforcement action against Fortune Hi-Tech Marketing (FHTM) is being initiated by the Federal Trade Commission (FTC) and several attorneys general for allegedly operating a pyramid scheme, the Direct Selling Association (DSA) has received numerous inquiries regarding whether FHTM is a member of the Association. "FHTM is not a member of DSA,” confirmed President Joe Mariano. Additionally, he stated that “the Association’s membership application process is rigorous, and is designed to ensure that only legitimate direct selling companies become members of the direct selling industry's trade association."

FHTM had applied for DSA membership, but withdrew its application in 2011. A rigorous review of each applicant’s marketing and compensation plan is conducted to ensure compliance with DSA’s self-regulatory Code of Ethics. DSA works with applicant companies to address any deficiencies in policies and procedures prior to recommending to the Board of Directors that the company be approved for full membership. Mr. Mariano explained that "the membership review process serves to identify pyramid schemes that are masquerading as legitimate direct selling companies." Mr. Mariano also stated "that well over half of the companies that apply for membership in the Association withdraw their applications for a variety of reasons including failure to come into full compliance with the requirements of the DSA Code of Ethics," thus making the company ineligible for membership. Pyramid schemes and other fraudulent scams are ineligible for DSA membership.

While DSA cannot comment on the specific allegations regarding FHTM, Mr. Mariano commended the FTC and state attorneys general "for their comprehensive, ongoing efforts to identify and prosecute illegal and fraudulent pyramid schemes, an approach that is consistent with concerns raised by DSA through its membership application process and its long-established self-regulatory efforts....."

.... The Direct Selling Association is a 102-year-old national trade association that represents companies who distribute products to customers through or with the assistance of independent salespersons who personally demonstrate and explain those products to the consumer, usually in the home or work place. Direct sellers are perhaps best known to the public as person-to-person, door-to-door, or home party plan sellers. Through the efforts of direct salespersons that provide personal demonstration, home delivery, and a variety of other sales-related services, direct-selling companies can offer quality products to consumers without substantial advertising or other barriers to entry found in other distribution systems, like brick-and-mortar stores. In 2011 there were approximately 15.6 million direct sellers in the U.S. with retail sales of nearly $30 billion.'

http://www.dsa.org/press/press_releases/?fa=view&docID=5448

If readers just stop and think for a moment, then this is obviously a fairy story; for the above document conveniently ignores the key-fact that another so-called 'Direct Selling' company, 'YourTravel Biz.com (YTB),' was a 'DSA' member that had just been 'approved as legal and ethical' only months before being successfully-prosecuted as a 'massive pyramid scheme' and shut down by the California Attorney General. In this particular case, it was found that 340,000 persons had been deceived by 'YTB' including a significant number who had bought effectively-valueless shares in it. 

Furthermore, if there really were 15.6 millions direct sellers in the USA in 2011, then how many of them remained in 2012 and where are all their customers? Readers will note that nowhere in any material published by any so-called  'DSA' anywhere in the world, is to be found a common-sense, accurate and unambiguous definition of what used to be considered a lawful direct selling company. 

i.e. a corporate structure which can prove that its revenue has largely-derived from the regular selling of significant quantities of products, and/or services, directly to the general public via commission agents: rather than from purchases made by a never-ending chain of its own losing, commission agents. 

Tellingly, in all material published by so-called 'DSAs,' instead of  'the general public,' we always find the vague, and ambiguous, terms: 'customers' and 'consumers' which obviously can be (and are) taken to mean absolutely anyone, including the commission agents themselves. Indeed, the so-called 'DSA's' own so-called 'Codes of Ethics' specifically allow so-called 'self-consumption by Direct Sellers' to 'qualify' as so-called 'Sales.'

Thus, heading the list of common-sense questions which should long-since have been put to the officers of the so-called 'Direct Selling Association' in the USA, is:

'Of your members' claimed '$ multi-billion retail sales,' exactly what percentage have been authentic, external, retail sales to the general public rather than internal transactions between your members and the millions of so-called 'direct sellers' themselves, arbitrarily, and falsely, defined as 'retail sales?'

Obviously, the officers of the so-called 'DSA' have painted themselves into the same absurd corner as the bosses of 'Herbalife', and their standard escape will be first to smile-sweetly, and steadfastly pretend that they can't be expected to have a ready answer to the above question, when the direct selling companies themselves don't monitor, or publish, this information. However, if put under pressure, they will then be obliged to claim that the questioner doesn't understand how direct selling functions, because many of the millions of persons who have always been described as 'direct sellers in the USA,' weren't actually 'direct sellers' at all, they were 'discount customers.'

Thus, I will confidently predict that, when challenged, the branch of the 'MLM' Ministry of Truth known as the 'Direct Selling Association' will cease to put forward the limp defence of ignorance. Instead, they will mount exactly the same arrogant, Orwellian offensive as the bosses of 'Herbalife (HLF).' 

In effect, they will say:  

Read the word 'seller' as 'buyer,' stupid! Then fraud  is lawful.'

David Brear (copyright 2016)

Stephen Butterfield - 'Amway: The Cult of Free Enterprise.'

I was recently reminded of Stephen Butterfield's book about the 'MLM' phenomenon which, although published more than 30 years ago, is just as relevant today.

https://books.google.fr/books?id=9qotsZxS_B4C&pg=PP9&source=gbs_selected_pages&cad=3#v=onepage&q&f=false

Amway: The Cult of Free Enterprise. Steve Butterfield, South End Press, 1985. 

Recruits are given special monikers within the organization and are promised salvation. Soon they find themselves sitting for 12 hours at a stretch at mass rallies, chanting thanks to the Leader for "teaching us to be free.' Contacts with parents and friends who aren't in the circle of the elect are cut off. Lectures, speeches, tapes and books indoctrinate them and incite them to fight for the Free World against Communism. They do not second-guess their superiors. They work long hours for little or no pay for the leaders who "love' them. 

Moonies? Close. These are the shock troops of Amway. 

Steve Butterfield, a Vermont English professor and onetime distributor for the mammoth corporation, tells how the peddling of laundry soap and breath freshener has been turned into a religious quest for half a million Americans. 

His tale is a chilling one. Amway somehow devised a method for brainwashing its eager legions into sacrificing their lives to line the company's pocket, all the while convincing them that they're crusading for something much different. 

Take the work ethic, for example. Once recruits are drawn into Amway, they enlist their own distributors through a pyramid scheme, much like a chain letter. You get rich by convincing those below you to give you money in the belief that by doing so they can get rich. So to make enough money through Amway to be able to quit your regular job, you have to dupe 100 others into becoming independent distributors on their own and buying overpriced Amway motivational tapes and books every week to "learn' how to earn a million dollars. While ostensibly pushing the work ethic, Amway lecturers teach you that the aim of the job is to retire and take ocean cruises while others do your work for you. 

The mind control is fearsome. Amway and the right-wing preachers and celebrities who address its seminars tell you that you're working to preserve family values while warning you away from friends and relatives who reject your sales pitch. Such losers, they say, do not deserve to get rich. 

The company maintains motivation through intimidation. Superiors visit your house unannounced to ensure that your family uses only Amway products. They check to see that you've cut out and taped to your refrigerator magazine photos of the items you dream of buying when your Amway fortune is made--Cadillacs and mobile homes are the icons of this gospel of wealth. Distributors who question the company's methods are cut off, and all "negative' books are trimmed from the Amway reading list. Mix in copious quantities of the rhetoric of free enterprise and competitive business and you have perhaps the grossest of caricatures of the American Way. 

But Amway didn't invent this extraordinary materialism. And it certainly is not the first to create such a herd mentality. Butterfield's book, like exposes of the Moonies and other cults, serves a valuable purpose in reminding us of how those instincts can be manipulated. Exposers of cults frequently aim to ignite crusades against individual cults. A more beneficial, though unlikely, effect would be to ignite a revolt against the misplaced values which provide the ready-made sales force for an Amway in the first place.

COPYRIGHT 1985 Washington Monthly Company
No portion of this article can be reproduced without the express written permission from the copyright holder.

Copyright 1985, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

'Utility Warehouse' - is a dissimulated rigged-market swindle.

(Perhaps it's just a coincidence, but since this article was first posted, certain details of the 'Utility Warehouse' narrative have been modified: - the approximately £200 'Distributor/Partner' sign-up fee has apparently been reduced to around £100 for persons already under contract to the company as 'Members').

Recently, I've been asked for my opinion of 'Utility Warehouse', a UK registered company which claims to have '40 000 Independent Distributors' selling to 500 000 customers.'

https://en.wikipedia.org/wiki/Utility_Warehouse

Even the briefest examination of 'Utility Warehouse' reveals some enormous red flags. For a start, it costs approximately £200 to sign up as a 'Distributor' for 'Utility Warehouse.' The sign-up fee is then refunded if 'Utility Warehouse' contractees manage to sign up 12 more contractees within 90 days, and additional payments are also offered to the contractees for each recruit they sign up, and for the recruits of their recruits, etc. ad infinitum.

Wes Linden is a blame-the-victim 'MLM income opportunity' cultic racketeer. i.e. Mr. Linden, and his criminal associates, steal money by peddling vulnerable persons the pernicious fairy story that they have access to a proven step-by-step 'Positive Mindset' plan which can enable anyone to achieve financial freedom in 'Multi-Level/Network Marketing,' and that they are willing to share this plan with anyone (for a price). 

  

Wes Linden has been a pitchman/shill for 'Utility Warehouse,' and any organisation with links to the likes of Mr. Linden, should be avoided like the plague.

'Utility Warehouse' exhibits the identifying characteristics of a dissimulated closed-market swindle, in that this legally-registered company doesn't seem to have any significant, or sustainable, source of revenue other than persons who have been under contract to it, and who have been giving their time and money to it, in the false-expectation of future reward. However, the bosses of 'Utility Warehouse', seem to have been following the classic tactic of labelling the majority of their contractees (who are unable to sign up more recruits), as 'Discount Customers.'

 

In reality, behind all the unsubstantiated success testimonies, celebrity endorsements, thought-stopping 'business' jargon and mystifying mathematics, the so-called 'Utility Warehouse Multi-level /Network Marketing Income Opportunity' has been based on the crackpot pseudo-economic theory that endless-chain recruitment + endless payments by the recruits = endless profits for the recruits.


David Brear (copyright 2016)

Charlie Munger, and perhaps Warren Buffett, says 'Herbalife (HLF)' is a fraud

Three years ago, I published an article (re posted below) explaining Warren-Buffett's alarming connections with 'MLM income opportunity' cultic racketeering, and his even more-alarming refusal to face reality. 

Berkshire Hathaway Vice-President, Charlie Munger.

http://blogs.wsj.com/moneybeat/2016/05/02/munger-throws-ackman-an-herbalife-bone/

Recently, I began to receive hundreds of page visits to this article from 2013, because Warren Buffett's closest associate and investment partner, Charlie Munger (an attorney), has finally made a public statement concerning 'Herbalife.'

http://www.forbes.com/profile/charles-munger/

https://en.wikipedia.org/wiki/Charlie_Munger

  
https://www.youtube.com/watch?v=yxMZM_63Fpk

At 1 minute 40 seconds in this interview clip, the Vice-President of Berkshire Hathaway, Charlie Munger, now says that Bill Ackman is 'totally right' (in judging 'Herbalife' to be the effectively-valueless, legally-registered, corporate front for a fraud). Presumably, Warren Buffett (who was sat right next to Charlie Munger) concurs with his friend's (legally-qualified) opinion?

_________________________________________________________________________

In almost all business matters, I would not be so presumptuous as to claim more experience than Warren Buffett. However, the pernicious fairy story entitled 'MLM Income Opportunity' (which I have been studying for many years), has precious little to do with 'business' (in the traditional sense of the word) and, unfortunately, Warren Buffett still has lots of green reasons at risk preventing him from facing this reality.

Warren Buffett (b. 1930) is an agnostic businessman from Omaha, Nebraska, who reportedly is worth $58.5 billions, but who likes to portray himself as just an average guy living modestly on his $100 000 annual salary as chairman and CEO of  'Berkshire Hathaway.'

As a little boy (aged just 6), Buffett (the son of a Republican Representative) already displayed a marked aptitude for making, but not spending, money. He went door to door peddling: chewing gum (at a 2 cents profit per pack), Coca Cola (at 5 cents per bottle, making a profit of 5 cents on a 25 cent pack of 6 bottles) and weekly magazines. 

However, young Buffett was not acting entirely independently, because his wholesale supplier was, in fact, his grandfather, Ernest P. Buffett, who owned a long-established grocery store in Omaha. During his high school years, Warren Buffett continued to make money in his holidays and spare time by delivering newspapers, selling golf balls and stamps, and from various other traditional commercial enterprises.

When Buffett filed his first income tax return in 1944 (aged just 13), he deducted $35 for the expenses of a bicycle and a watch - by claiming that these were items he needed to operate his paper round. 

In 1947, Buffett (aged 17) and a young associate, Donald Danly, started a company called 'Wilson Coin Operated Machines.' They bought a secondhand pinball machine for $25 which they installed in the local barber's shop. Their initial investment immediately generated a steady net-profit of $50 per week. Within a few months, Buffett and Danly had bought, and installed, a total of 3 secondhand pinball machines in barber's shops, but, in 1948, the pair sold 'Wilson Coin Operated Machines' for $1200.

Today, Warren Buffett is generally recognised as one of the most-influential people in the world. He has recently been treated (successfully) for prostate cancer. He has pledged to give away 99% of his personal fortune to philanthropic causes. 

How many times have I read thoughtless comments insisting  that 'Multi-Level Marketing' can't be a fraud because Warren Buffett owns an 'MLM' company? In fact, I once received a particularly absurd comment from a deluded 'Amway' adherent who was completely convinced that Warren Buffett owns at least 10 'MLM' companies and that he recommends 'MLM' as 'the best way for anyone to become a millionaire.'


 
 


It is a matter of public record that Warren Buffett's company, 'Berkshire Hathaway,' owns a kitsch, but apparently innocent, 'party plan direct sales' company known as 'The Pampered Chef (PC)' which has sold the public (mainly women) a so-called 'MLM income opportunity.'  However (as far as I am aware), 'The Pampered Chef' has not exhibited the universal identifying characteristics of a cult. Recently, the corporate officers of 'The Pampered Chef' were boasting annual sales of $400 millions via a sales-force of 60 000 persons. 



Even if the above, precisely-worded, passage of the 'MLM Income Opportunity' fairy story was entirely accurate, 'Pampered Chef' would still be a far-from-ethical enterprise, in that its officers have been deliberately withholding key-information from the public in order to continue to exploit large numbers of non-salaried commission agents whilst, at the same time, requiring these ill-informed people to exploit their own ill-informed friends and relatives.

In theory:

participants in 'The Pampered Chef MLM Income Opportunity'  (i.e. persons who have signed a take-it-or-leave-it annually-renewable, contract in which they were arbitrarily-defined as  'Independent Consultants', and who have paid the $155 fixed price for the so-called  'Business Starter Kit'), can choose to make money via:

regularly organising 'Cooking Parties' at which they can sell banal products (kitchen appliances, utensils, etc.) to their friends, neighbours, relatives, etc., for a straight percentage profit (20-31%).
or: 

an escalating system of percentage commission payments on the sales of further 'Independent Consultants' whom they have recruited, and on the sales of the recruits of their recruits, etc., ad infinitum.

In practise: 

'Pampered Chef' participants are obliged to invest their time and to pay all the considerable, allied, operational expenses, but exactly how much of their own resources this will inevitably involve, is not disclosed to new recruits.

most participants are generally able to organise one or two 'Cooking Parties' and use their existing relationships (based on love and trust) to sell some 'Pampered Chef' products to a few supportive friends and relatives, but no participant could be reasonably expected to generate a significant, and sustainable, net-income by paying to organise these kitsch sales meetings time after time, for many years.

no common-sense limit has been set on the number of 'Pampered Chef' participants operating in any given area, whilst the participants are clearly offered incentives to be their own best customers and to recruit any other customers as competitors. 

equivalent, or better quality, products to those offered by 'Pampered Chef' can be easily bought in all-manner of traditional retail outlets and On line.

all any free-thinking person (so desiring) has to do to obtain unused 'Pampered Chef' products, is go to the Internet, where there is always an unwanted mountain of the stuff going begging. (We are talking about many thousands of items listed on popular auction-Sites like e-bay each day, and at a substantial discount compared to their original fixed-price).


http://www.ebay.com/csc/i.html?_lncat=0&_sacat=0&_from=R40&_nkw=pampered+chef&LH_Complete=1&rt=nc

http://www.ebay.com/sch/i.html?_from=R40&_sacat=0&_nkw=pampered+chef&_lncat=0&_arm=1&_armm=94&_ruu=http%3A%2F%2Fwww.ebay.com%2Fsch%2FUnited-States-%2F261%2Fi.html%3F_from%3DR40%26_nkw%3Dpampered%2Bchef%26_arr%3D1&_armi=United+States

Thus, it seems that just as in 'Amway', 'Herbalife' , 'NuSkin', etc., a significant number of so-called 'MLM customers' have not been buying products from 'The Pampered Chef' in order to use them. On the contrary, the products might as well not have existed, because they appear to have been the classic 'MLM' wampum; the real function of which has been to launder unlawful investment payments made on the false-expectation of future reward.




http://blogs.wsj.com/moneybeat/2013/05/06/herbalife-makes-cameo-during-berkshire-hathaway-weekend/

Finally, the vital question of what distinguishes lawful direct selling from an unlawful pyramid scheme, was raised last weekend in public at 'Berkshire Hathaway's' annual shareholder meeting. 




Warren Buffett was asked by a concerned 'Berkshire Hathaway' shareholder if Bill Ackman’s $1.2 billions short-selling bet that 'Herbalife' is an effectively-valueless company hiding a cruel fraud, will have a detrimental effect on 'The Pampered Chef?,' and if Warren Buffett considers Bill Ackman's analysis of 'Herbalife' as a fraud, to be accurate?






Given his iconic status as the shrewdest investor in the world, and considering the irrefutable facts that:

the 'Herbalife' racketeers have steadfastly pretended that their business is based on selling products to thousands and thousands and thousands of 'end users,' 

'Herbalife' and 'The Pampered Chef' have been linked via the so-called 'Direct Selling Association,' and via an extensive, and precisely-worded, thought-stopping 'commercial' jargon (including the term 'MLM'),

the bosses of various other members of the so-called 'DSA' (which were subsequently closed-down by the FTC as pyramid frauds) also shared the same extensive, and precisely-worded, thought stopping 'commercial' jargon which they employed steadfastly to pretend that their 'businesses' were based on 'selling products' to thousands and thousands and thousands of 'end users,'

Warren Buffett's strangely-familiar and precisely-worded, responses to his shareholder's questions, demonstrate a staggering lack of knowledge of what actually constitutes economically-viable (and therefore, lawful) direct selling, and reveals the considerable risk he has taken (in this state of blissful ignorance) with his shareholders' money. Self-evidently, when the 'Herbalife' racket is finally closed-down as a pyramid fraud, whomsoever is left holding 'The Pampered Chef,' will also be in deep trouble.

Warren Buffett said:

'I have never looked at a Herbalife annual report and I do not know about its operation... Pampered Chef’s business is based on selling to the end user, and we have thousands and thousands and thousands of parties every week where people who are actually going to use the product buy from somebody. We are not making the money by loading up people and then having them leave the sales force…That should be the distinguishing characteristic if I were regulating the industry.'

Readers will observe that Warren Buffett very pointedly did not say that according to FTC guidelines, for any direct selling income opportunity to be lawful, it must involve its participants regularly retailing an overwhelming majority of products which they have bought from the sponsors (at least 70%) to the general public.

Warren Buffett merely repeated part of the so-called 'Direct Selling Association's' effectively-meaningless'definition of direct selling,' i.e.  'selling to end users,' which has been specifically worded in such a vague way, that it can be taken to mean participants in 'MLM' schemes themselves. 

WARREN BUFFET'S NAME HAS BEEN HABITUALLY USED TO COMMIT WIRE FRAUD, because, for decades, effectively 100% of so-called 'Multi-Level Marketing Distributors' have been unable regularly to retail a significant quantity of fixed-price products, and/or services, to the general public for a profit, and have failed to generate an overall net-income from their so-called 'home-based businesses.'  

 I have some common-sense questions for Warren Buffett:

• What percentage of 'Pampered Chef ' recruits have actually remained with your company for more than: 1 year?  3 years?  5 years?

• What has been the average annual drop-out rate for 'Pampered Chef' recruits?

• Apart from the $155 'Business Starter-Kit,' what is the approximate amount of additional money that 'Pampered Chef' recruits have been required to find, to finance their first 12 months, non-salaried activities on behalf of your company.  

• 'Pampered Chef's' corporate officers have recently claimed 'a sales-force of 60 000,' but since your company's instigation, how many different persons in total have bought their own 'Pampered Chef Independent Consultancy' from it, and, by extrapolation, what is the overall vanishing-rate for these so-called 'Businesses?'

• What lawful, and/or ethical,  reason can you put forward to explain why the key-information contained in the answers to the above questions has been withheld by your company from prospective 'Pampered Chef' recruits?

• Why is the Internet loaded with unused 'Pampered Chef ' inventory for sale?' 

• Hand on heart, would you personally recommend joining any so-called 'MLM income opportunity' (including 'The Pampered Chef'), as a viable and ethical means for ordinary people to earn extra income?

• Again, hand on heart, what would be your personal reaction if a member of your own family announced that he/she had signed up with 'Herbalife?'

• When you made your public statements relating to 'Pampered Chef' and 'Herbalife' at the recent 'Berkshire Hathaway' shareholders' meeting, were you aware that numerous, unsecured, Micro-Finance loans have been made to immigrants, and other poor persons, in the USA, via the'Grameen Bank' (an institution which you were responsible for bringing to Omaha), in order that these vulnerable borrowers could start so-called 'MLM Businesses?'

• Before you made your investment in 'The Pampered Chef', had you actually seen any quantifiable evidence proving that more than 70% of 'Pampered Chef's' claimed 'multi-million dollar sale's' have been authentic external retail sales to members of the general public (based on value and demand)?

• Even if, as you claim, the (demonstrably-unethical) activities of the 'The Pampered Chef' are not (technically) unlawful in the USA, are you aware that, due to your acquisition of this member of the so-called 'Direct Selling Association,' your name and iconic status have been habitually-used by 'MLM Income Opportunity' racketeers, and their propagandists, in order to commit fraud and to obstruct justice all over the globe? 

I look forward to the day when, if asked for his opinion of 'Herbalife' by a 'Berkshire Hathaway' shareholder, Warren Buffett replies:

Based on my knowledge of the fundamental characteristic which identifies: Ponzi schemes, pyramid scams, money circulation games, chain letters, etc.  - namely, that all these frauds have no sustainable or significant source of revenue other than their own contributing participants - any so-called 'MLM direct selling income opportunity' in which the overwhelming majority of its declared annual revenue has not been derived from authentic retail sales to members of the general public (based on value and demand), but rather from the participants' purchases themselves (based on the false expectation of future reward), is a dissimulated closed-market employing endless-chain recruitment and, according to the FTC's own (70% retail) guidelines, fraudulent. Therefore, unless the corporate officers of 'Herbalife' can produce solid independent evidence that their so-called 'MLM direct selling income opportunity' really has had a significant and sustainable source of external revenue, no honest observer would be able to arrive at any other logical conclusion other than the bosses of 'Herbalife' are economic alchemists who, just like Charles Ponzi and Bernie Madoff, have been secretly peddling ill-informed people infinite shares of their own finite money.

I sincerely hope that Warren Buffett's own view of himself, combined with his financial involvement with 'The Pampered Chef', will not prevent him from facing wider reality.

David Brear (copyright 2016)