Guest post by Pyramid Scheme Alert
In a letter to a Director of Pyramid Scheme Alert, the chief of police in one of India’s largest states, Andhra Pradesh, wrote that a criminal case has been booked by the government’s Criminal Investigation Division against Amway India for promoting a “Money Circulation Scheme” in the disguise of Direct Selling. He stated, “Now the case has been charge sheeted and it is proved that Amway is nothing but Money Circulation Scheme. Andhra Pradesh Government now has issued a G.O. against Amway under sections 8 of the Prize Chits & Money Circulation Schemes (Banning) Act, 1978.”
India’s “Prize Chits & Money Circulation Schemes” law is equivalent to anti-pyramid scheme or anti “endless chain” statutes of many US states. At the federal level, such scams are covered in America under Section 5 of the FTC Act outlawing “unfair and deceptive trade practices.”
The criminal charge against Amway has been reported in the Indian news media, but not in America. One online news account reported, “the state government banned the controversial multi-level marketing company Amway India Enterprises from publishing any material and advertisements violating the Prize Chits and Money Circulation Schemes (Banning) Act.
“The crime investigation department booked cases against Amway alleging it is just a money circulation scheme. The home department has asked Amway not to publicize their schemes in violation with the Act.”
The report noted that Indian authorities also brought criminal charges against another MLM, GoldQuest, which has operated in many other countries. Famous film personalities in India are said to be involved with GoldQuest, according to the reports, and police booked “cases against some senior health department officials and prominent doctors” who were promoting the MLM scam.
The report stated that the “managing director of GoldQuest, Ms Pushpam Appala Naidu, who was remanded to the judicial custody two months ago is currently in Chennai prison.”
The police action against Amway follows a police raid on nine Amway offices in 2006. Amway India, in turn, had appealed to Andhra Pradesh High Court challenging the police raids and sought suspension of the probe into its business model. But the high court dismissed its petition on July 7, 2007, saying that the company’s scheme was merely to enroll members for earning quick money.
For a full and graphic picture of how Amway operates in India – especially if you live in India – read WITH SOAP IN THEIR HANDS & HOPE IN THEIR HEARTS by Ramjee Chandran from The Bangalore Monthly Magazine in July, 1998. Chandran characterizes Amway as a cause of “economic evil” and describes the pitiful scene of uninformed and low income Indians investing their life savings in the “non-retailing” sales scheme in which 99% are doomed to lose.
In 2005, PSA’s President spoke at a seminar in Sri Lanka of Central Bankers from five South Asian countries, including India. The representatives from India reported many complaints against Amway but also said various states differed in regulation and that, despite complaints and largescale losses among consumers, the courts had been allowing Amway to operate.
Didn’t Amway recently complain to the Indian Government that regulations be invoked against their competitors for operating chain letter type scams that were competing unfairly against their supposedly legit business? Couldn’t happen to a better bunch of schemers and scammers. Bwuhahahahahahahahaha!
Since the original police investigation of Amway in Andhra Pradesh became public knowledge, David Steadson (a.k.a. Insider a.k.a. IBOFightback etc.) has been steadfastly pretending on his multiple Websites that it was purely the result of a malicious complaint made by a vindictive individual involved in a marital dispute.
Since the criminal charge against Amway India was confirmed, which blows this sinister lie out of the water, Steadson/Insider/IBOFightback has been posting comments on numerous Websites in which he now pretends that ‘it’s business as usual for Amway in India.’
In reality, Amway’s Indian agents are abandoning the organization in droves, whilst the corporate officers of Amway India now risk prison sentences. Meanwhile, the American authors of the Amway myth cannot be touched by the Indian authorities.
Dave…
Obviously this IbendOverFORbuddies fellow can not be trusted on any point of fact involving the Amway business. It seems like so much of what goes on in the Asian MLM market is like a black hole. Hopefully there are some Indian citizens that might read this blog post and keep us up to date on what exactly is going on over there with Amway. Sounds like Amway has been put out of business, at least in this one State.
Amway likes to portray itself as being something so much more superior than the run of the meal “money circulating” and “Ponzi” schemes that seem to be popular in Asia. Amway always tries to differentiate their product based pyramid schemes from other scams and schemes. Obviously at least the regulatory authorities do not buy their arguments, at least not yet. Maybe regulatory oversight isn’t for sale in India as it is in the US?
The terms: ‘money circulating’ and ‘Prize Chit’ are used in Indian law to identify what should be more accurately described as a ‘Premeditated Closed-Market Swindle’. In Boston in the 1920s, Carlo Ponzi sold bonds printed in denominations up to $50 000. These promised a 50% profit in 12 months. Ponzi claimed that he could take the investors money and buy international postal coupons in countries with weak economies and then ship them to the USA to be exchanged for 4 times what they’d cost. This was a lie. There were no external profits. Ponzi retained absolute control of the means of exchAmway’s instigators
Ponzi retained absolute control of the means of exchange in a premeditated closed-market. Amway’s instigators have made this type of swindle even more complex, but, essentially, it remains the same. There are no external profits, because Amway’s products have always been deliberately priced too high. Amway’s instigators have retained absolute control over not only the means of exchange, but also the means of production and distribution in a premeditated closed-market.
What lies behind Amway’s closed-market swindle is a secondary, much larger, ‘advanced fee fraud’ using essentially the same tactics as the Nigerian bank scam. This has been operated behind a labyrinth of (apparently independent) corporate structures in order to prevent, and/or divert, investigation and isolate Amway’s instigators from liability. If you read the written statement given to the High Court by a senior company officer of Amway UK, she pretended that she had no idea what was occuring and anyway Amway UK could not be held responsible for the illegal activities of other companies (IBS, etc.) and the individuals who run them. This was Perjury. I made the company officers of Amway UK fully aware of what was occuring as long ago as the mid 1990s. At that time, Amway’s UK lawyers described my accusations as ‘foolish notions’ and circulated a letter which pretended that I’d invented everything as a result of a family dispute.
In the UK in the early 1990s, Amway also pretended to be opposed to pyramid scams and money circulating schemes. The company employed a Conservative UK member of parliament, Andrew Rowe, as a consultant ($20 000 annually). Rowe made several misleading statements in the House of Commons (concerning Multilevel Marketing in general and Amway in particular) when changes to the UK law concerning pyramid scams were being debated. At the same time, hoards of deluded UK Amway adherents contacted their members of parliament. Since the early 1990s, Amway UK has also also employed the directors of two (apparently independent) UK charities (Ian howarth, ‘Cult Information Centre’, and Graham Baldwin, ‘Catalyst’) as consultants. These charities pretend to offer advice and accurate information to members of the public, journalists, academics about cultic groups. Both directors have never openly declared their connections to Amway, but they have openly refused to categorize Amway as a cult. It is certain that Amway has followed similar information monopoly tactics in India.
David…
Why not say that Amway operates a monopoly product based pyramid scheme? Seems so much easier. Recently I’ve taken to calling Amway a monopoly business since their products do not really compete against similar products in a fair and free market.
Distributors are taught to be product loyal customers and consumers of their own wares and therefore the products generally only compete against other products in the Amway catalog. When “negative” products are excluded from consideration, then high priced monopoly products are the obvious end result. For evidence we can turn to the Amway catalog prices which–even with the distributor discount–are priced exorbitantly higher than brick and mortar store products of similar value. ($78 retail for a one month’s supply of Double X vitamins. Even at distributor cost, this is a total money extracting ripoff!)
Since regulators refuse to recognize the obvious pyramid scheme aspects of Amway, they should then investigate the monopoly product aspects of the Amway scheme. The secondary tool and function business should be investigated in like fashion.
Amway has provided cash cow handouts to Congressmen who then stand in the shadows behind regulators, whom we all know to be asleep at the controls, allowing thousands upon thousands of American citizens along with citizens of the World to be victimized by this worst of all American Scams! Amway is a clearing house for political payoffs much the same way Al Capone was a clearing house for graft in Chicago in days of old.
Amway’s tactics of complaining about other pyramid, Ponzi, money circulating, prize chit scams is a cover to separate themselves from the pack of other predators chasing the same wildebeests! It just boggles my imagination that countries, states, courts, and regulative bodies haven’t stepped in and put an end to these criminal activities before now. Amway has deep pockets to buy hordes of lawyers and special interest lobbyists to keep the scheme rolling forward.
Politicians accept MLM money in a shameless manner. Even Presidents schedule sit down visits to the Ada, Michigan Amway Pooh Bah, Rich Devos, to accept political donations. What a shame for the Grand Old Party! To even consider accepting money that has been extracted by massive consumer fraud makes the magnitude of Amway corruption of insane proportions!
The same lack of regulative oversight which lead to the current fiscal nightmare currently allows any number of MLM pyramid schemes (to include Amway) to continue in operation long after they should have been shut down. The Federal Trade Commission does not enforce its own rules and allows Amway distributors to disregard retail selling rules which the FTC had imposed to insure that Amway does not operate as a pyramid scam.
The term ‘monopoly-based pyramid scheme’ is not sufficiently accurate. Even the more-accurate term, ‘Premeditated Closed Market Swindle’, only begins to explain the problem. In reality, what ‘Amway’ offers is a form of economic pseudo-science, but presented using a constant repetition of reality-inverting ‘commercial’ words and images. What ‘Amway’s’ deluded core-adherents actually believe is that a finite amount of their own money can be infinite. Since they are effectively unsaleable on the open market, ‘Amway’ products are irrelevant. In the final analysis, all closed-market swindles are based on shutting down victims’ critical and evaluative faculties in order to create a belief in essentially the same puerile fiction. Although blief in a ‘Ponzi scheme’ can be temporarily sustained by using the later victims’ cash to pay out the earlier victims, classically, the perpetrators are forced to abscond with the cash when the authenticity of their fictitious claims are challenged and too many victims re-enter reality and demand their fictitious profits.
The perpetrators of the ‘Amway’ fraud have sought to avoid this problem and sustain their activities by arbitrarily defining their victims as ‘Independent Business owners’. To casual observers it then appears that the victims are reponsible when they fail to make money. Victims are also conditioned to accept unconciously that they can only achieve prosperity, happiness and freedom if they believe totally in ‘Amway’. Consequently, when inevitably they fail most can be easily persuded that it was their own fault. This form of closed-logic trap is classic of many cultic movements and totalitarian regimes. Long-term adherents of the ‘Amway’ myth are, in reality, insolvent de facto slaves, but their own egos will not allow them to accept this. Core adherents who manage to break with ‘Amway’ and to confront the ego-destroying reality that they have been deceived and exploited are invariably destitute and dissociated from all their previous social contacts.
Cognitive dissonance either does one of two things. Allows victims of MLM schemes to continue on in the “Closed Market Swindle” (as you call it) or eventually see through the deception, blame themselves and flush themselves out of the scheme. I follow your reasoning and description of how it works very well. Adherents are conditioned to blame themselves for the failures of the system. Heavy mind manipulation must go on to keep people paying to play in a game so heavily stacked against them.
I have pointed out the deception of calling oneself an “Independent Business Owner” as well. There is nearly zero independence involved in signing a contract with Amway. They have carefully constructed these contracts to place themselves in nearly complete control of “their” business. To think one is operating their own independent business if a sign of insanity. Amway controls almost every aspect of the business arrangement to include product, pricing, and promotion. An independent businessman makes the rules, doesn’t abide by rules set in stone by another. Being an IBO is the biggest joke on the duped group of suckers that get fleeced by this scheme.
Quixtarisacult. You demonstrate a high-level of understanding how the trick is pulled. The essence of mental manipulation is gradually to take control of its individual subject’s means of thought (i.e. his/her words and images) shutting down their critical and evaluative faculties whilst giving them the illusion that they are making free-choices. The great paradox of cultic movements is that their core-adherents are totally convinced that no one is coercing or controlling them. However, the term ‘Amway’ (corruption of the American Way) is itself an inversion of reality. The mere fact that ‘Amway’ is still being dealt with by commercial regulators is already a victory for its instigators. In order to understand and expose any cammouflaged totalitarian movement it is vital to use accurate deconstructed terms at all times. Any commentator who repeats the reality-inverting shielding-terminology of any cultic group, but without detailed qualification (or heavy irony) demonstrates that he/she remains at a pitifully low level of understanding. sadly, it is impossible for many former cult adherents to describe their experieces using terms other than those which they were conditioned to use in their group. ‘The most powerful weapon in the hands of the oppressor is the mind of the oppressed’.
David, would you consider being a guest poster on my Blog: Quixtar Cult Intervention I’d love to use some of your thoughts in my blog post today? Would that be okay with you? My email is [email protected] . I’m sure that Tracy appreciates your thoughtful comments on her blog as well.
Perfect4U and One-Vision is the latest name for this fraud that is heading to India to rip off and steal from the poor there.
Here are only, Press Articles, TV News Reports, Court Rulings, Government Statements and Warnings, on Perfect4U / One-Vision and the management.
The Press and Government are accountable and would have been sued, if these statements and articles, were not true and in any way propaganda.
I will work backwards in a logical order, so you can see in the links. Fitzpatrick and/or Singh are nearly always mentioned, but sometimes used front people. Either way, they were 100% involved and it was always the same, just change of name and location.
British newspaper article: Perfect4U and One-Vision
The http://www.perfect4ucashback.com is forced to close down due to false advertising and claims to affiliates that had never heard of them and swiftly disowned them, when told:
http://www.thisismoney.co.uk/news/columnists/article.html?in_article_id=440837&in_page_id=19&in_author_id=5
British newspaper article: Perfect4U and One-Vision
More company’s investigating, why they are affiliates without their knowledge and the Perfect4U / One-Visions lawyers in Gibraltar drop them, with immediate effect:
http://www.thisismoney.co.uk/news/columnists/article.html?in_article_id=440571&in_page_id=19&in_author_id=5
Botswana newspaper article: C – Lifestyle Management Group
The Botswana Police Serious Crime Squad and the Bank of Botswana launch an investigation into a pair of global financial gangsters, Fitzpatrick and Singh:
http://sundaystandard.info/search/search_item.php?NewsID=1969
South African newspaper article: Lifestyle Membership Management
Whole emphasis is laid on recruiting new members, not enjoying the supposed benefits. “We used to be called Millennium Leisure International, but try not to tell anyone”:
http://www.itinews.co.za/newsletters/pdf/ED42F8DC-F4AC-45A1-BF0E-CCE88971FF86.pdf
South African newspaper article: Millennium Leisure International
Reverse Bank orders MLI’s account to be frozen. Investigations into money laundering and fraud. The are not even registered correctly and operating illegally:
http://www.int.iol.co.za/index.php?click_id=79&art_id=vn20060715080339293C972830&set_id=1
South African newspaper article: Leisure Marketing International
Many companies, including Mastercard, are”horrified” to know MLI was advertising affiliation on its website. Target pensioners, but make sure they have the money!
http://www.iol.co.za/index.php?set_id=1&click_id=13&art_id=vn20060624084405154C724150
British Newspaper article: VIP club
“I was constantly led to believe I would make £10,000 within two weeks of joining”
“I am now left in huge debt”“scam that just won’t go away”
http://blogs.mirror.co.uk/investigations/2006/03/truth-behind-the-vip-pyramid-s.html
British Newspaper article: VIP Club
“Don’t worry, this isn’t a cult,” Fraudulently offering holidays on Necker Island.
Anyway its not about the holidays. Its about recruiting more into the pyramid scheme.
http://blogs.mirror.co.uk/investigations/2005/10/inside-the-vile-vip-pyramid-sc.html
British newspaper article: OMI Club
Invitations by word of mouth only! “Make a fortune – but give us £1,700 first”
‘giving you the lifestyle you deserve’. “The atmosphere is almost cult-like”
http://www.metro.co.uk/home/article.html?in_article_id=7511&in_page_id=1
British newspaper article: VIP Club
“We’d heard their patter before, including “get the lifestyle you deserve” and “don’t worry, this isn’t a cult”. – Mugs of the world, you have been warned!
http://blogs.mirror.co.uk/investigations/2006/08/pyramid-scammer-ketan-hiranis.html
BBC news article: OMI and VIP Club
The claims made about both the OMI and VIP Clubs were misleading. These clubs use slick, high pressure sales presentations to deceive the public.
http://news.bbc.co.uk/1/hi/business/4543264.stm
British newspaper article: Alpha Club
Joining involves attending an invitation-only recruiting meeting. Harrods says their name was used without their knowledge and approval, we would have said no anyway.
http://www.guardian.co.uk/theguardian/1999/jul/31/features.jobsmoney7
New Zealand newspaper article: Net Guard and World4Vision
Net Guard recruited “agents” through invitation-only presentations. paid $6800 to become members and received $1200 for each new recruit they brought to the organization.
http://www.nzherald.co.nz/technology/news/article.cfm?c_id=5&objectid=2050786
Australia Government Warning: Futuregen
Aside from incurring these fines, you are likely to lose your money and your friends you recruit into the scheme. Fitzpatrick launches Futuregen in Canada.
http://www.fairtrading.nsw.gov.au/Co…d_schemes.html
British Government Disqualified Directors Ruling for Robert Fitzpatrick:
Fitzpatrick is banned from running companies in the UK for 11 years. Because of fraudulent and deceitful practices. A ruling which he has clearly violated.
http://www.companieshouse.gov.uk/ddir/dqdet.cgi?P=0482753102
British Government Disqualified Directors Ruling for Gurdeep Singh:
Singh (including aliases) is banned from running companies in the UK for 12 years. Because of fraudulent and deceitful practices.A ruling which he has clearly violated.
http://www.companieshouse.gov.uk/ddir/dqdet.cgi?P=1160734901
British newspaper article: Freedom International
Fitzpatrick and his wife Michelle were using religious-style meetings, with chanting, clapping and loud music, to recruit members. Same system as Titan pyramid scheme.
http://archive.asianimage.co.uk/1996/12/23/838143.html
British newspaper article: Igennex
Investigated by the Inland Revenue after it emerged that it owed creditors, including former members, nearly £4 million. Closed down in New Zealand
http://icbirmingham.icnetwork.co.uk/0100news/mercury/content_objectid=13902711_method=full_siteid=50002 _headline=-Pyramid-brothers-may-face-fraud-charges-name_page.html#story_continue
Irish Television News video clip: Ignite Leisure
A once in a lifetime opputunity – Brainwashing presenations at a luxury hotel. Pressure put on getting people to join.
http://www.rte.ie/news/2005/1006/6news_av.html?2080453,null,200
New Zealand Government Communiqué: Infinity Concierge
Buy into an exclusive concierge service (heard that before?) Guilty of
breaching the Fair Trading Act. Bank accounts are frozen.
http://www.comcom.govt.nz/Publications/ContentFiles/Documents/Communique%20March%202003.PDF
British newspaper article: Infinity Lifestyles Limited
Fitzpatrick claims to be a millionaire, (don’t they all?) but is a bankrupt. Yet he lives a lavish lifestyle, while owing money to everyone.
http://www.thisismoney.co.uk/news/article.html?in_article_id=341979&in_page_id=19
Scottish newspaper article on: Scotia Leisure
Called for great opportunity. 3 hour presentation on Closed User Group Benefits. At luxury hotel, £10 entry, £1700 join, Sign up your friends “It’s bound to cause heartbreak”
http://www.sundaymail.co.uk/news/tm_objectid=16444433&method=full&siteid=64736&headline=sunday-mail-investigates–curseof-the-pyramids–name_page.html
Black listed by the Time Share Council:
Scotia Leisure is placed on a Black List of Corrupt companies. Have a search through and you will find that most of Fitzpatrick and Singh’s, other failed ventures are listed.
http://www.timesharecouncil.eu/#S
British newspaper article: Guardearly
British High Court Judge said he felt Mr Fitzpatrick was ‘playing with the law’
Case involving the exploitation of his own elderly sick Aunt!
http://archive.burytimes.co.uk/2001/4/10/684203.html
British newspaper article: Guardearly
Fitzpatrick’s attitude: “At the end of the day, people new what they were doing, if they go into a betting shop and blow £2,500 on a bet, they can. It’s up to them, you decide”
http://archive.thisislancashire.co.uk/2000/1/31/742926.html
British newspaper article: Titan
It follows the winding up of the third version of the money swindling operation.
So I guess it had two more different names even before this.
http://archive.thisislancashire.co.uk/1997/7/25/822350.html
As you can see, these serial confidence tricksters: Fitzpatrick and Singh have been running this exact same operation globally, since 1994? Not really a new and unique business opportunity then is it. If it was so fantastic, as claimed each time around, then those original companies would still be going and multi billion dollar entities by now.
Now if you also want to check the 1,000´s of blog entries about these scammers. Just Google their name next to any of the above companies!!!
1,000´s ripped off globally and really funny but the same worded arguments are used defending each time!!!
A few years ago an article by Ramjee Chandran opened my eyes to a scam called Amway. He wrote the article “With Soaps in their Hands and Hopes in their Hearts” more than a decade ago but still Amway is able to thrive and survive here in India. Is it because India is full of suckers? No, obviously not. Then what are the reasons of Amway’s continued weedish existence.
The fundamental reason is the addictive cult philosophy of Amway which brainwashes a susceptible soul in believing that he becomes smart by thinking in a criminally selfish way. His greed of material objects and pleasures is sanctified and he is asked to nurture this greed. The greed takes over his life and relations. Anyone who is not “profitable” is “flushed down the drain”.
Another reason is promotion of Amway produced food supplements (Nutilite etc.) by greedy medical practitioners and private health clinics. Just look around and you can easily find their posters adorning the walls of your neighbourhood pharmacies and dispensaries. These supplements are a luxury but patients who cannot buy two proper square meals are asked to use them. In many cases they are handed out at a discount and the seller uses his own black money to cover the difference. The seller gets to the next more disgusting level of the pyramid. Of course the discount is better than dumping the soaps in the gutter to keep the ratings.
Finally, the strongest reason of Amway’s success in India is the good old black money. You will be surprised to note a high proportion of spouses of government and public service employees of all levels involved in this scam. They achieve two objectives. Firstly, a fake self esteem is achieved by calling themselves entrepreneurs. Secondly, dollops of black money are put into fair-money circulation. Many times, instead of a wife it could be a not-so-bright-and-previously-unemployed brother-in-law, or a next-to-kin or anyone who could keep mum about the source of the money.
It is sad and frustrating that Amway still exists in India and shamelessly brags its success.
The booking of criminal charges keep alive the hope that these scamsters will be shown their right place one day like others. Remember Ponzi, Goldquest….
How a person can be a story maker that he saw posters of nutrilite on walls. he must use nutrilite to correct his or her vision correct. I think all the comments are from those who are frustated or failures in their life. As far as other businesses are concerned who is getting more richer, the manufacturer or the distributor. Name me a single person who is not involved in any practice which is beneficial to him. In a country like India where the Government is not able to control the scam in education system, where all the corrupt leaders are not able to save lives of their citizens, are free to disqualify the idea of Amway.
In India where people cannot buy two proper square meals are asked forced to watch and use high luxurious cars or buildings. How erratical or funny?
I THINK GRAPES ARE SOUR FOR THEM
I couldn’t have said it better myself, Ritesh.
In addition to violation of Prize Chit Money Circulation Banning act, they are also giving U a bundle of goods, alongwith membership, which also covered as monopolistic and restrictive trade practice.
Further, they do not return the sales tax, it shud be investigated, and there may be a tax fraud too ?