Pyramid Scheme Alert (PSA) provides current and historical news items that are of interest to our members and visitors. None of the reports or commentaries is intended to imply that any of the referenced companies have been charged or convicted as illegal pyramid schemes.
Amway/Quixtar Pyramid in Collapse
Amway, the oldest, largest and most politically connected MLM the company that effectively created "multi-level marketing" appears to be shaking and possibly on the verge of collapse. After millions of victims have lost billions in dollars, after millions of poor people in Third World countries were misled and ruined by Amway's dream machine, and millions in ill-gotten Amway money were poured into the campaign coffers of politicians to prevent federal investigations, the full truth about the Amway/Quixtar scheme is being revealed. Regulators in India, China and England are taking action. Investigations by US regulators cannot be far away.
-- A group of Amway/Quixtar's largest and most senior distributors have charged in a class action lawsuit that Amway is a fraud, a pyramid scheme, a worldwide scam.
Top Gun Distributors vs. Quixtar:
-- A class action lawsuit has also been filed against Quixtar (Amway) by plaintiffs who are at the bottom of the Amway/Quixtar pyramid. These charges against Amway/Quixtar go to the very heart of the company's business practices and most other multi-level marketing (MLM) schemes', that there is no retail "direct selling" opportunity, only an endless chain recruitment program. The suit was brought by Boies, Schiller and Flexner. David Boies of this firm represented Vice-President Al Gore in front of the US Supreme Court in the world famous case, Gore vs. Bush that contested the vote counting in Florida after the 2000 election.
-- Amway has effectively been shut down in England and Ireland pending a government investigation. The charges in the UK concern Amway's recruitment tactics and the practice of selling new recruits bogus" tools for success" that are distributed through a related pyramid scheme.
-- Police officials in India raided offices of Amway in the largest state in the South of India. The police are charging that Amway is deceiving Indian citizens and causing large-scale financial losses by perpetrating a pyramid scheme.
-- Amway's scheme churns over 70% of all new recruits each year. (70% of the new recruits quit each year.) To continue Amway/Quixtar must relentlessly find new victims. This requires constant expansion to new countries. But, China, the largest market in the world, has effectively shut Amway out of that country. The government of China allowed Amway to gain a licence but strictly prohibited Amway from using its pyramid recruitment pay plan. No Amway distributor can earn money from purchases of others in a downline. Without the false lure of the endless chain, Amway's sales will wither in China.
-- Amway founders and top guns have contributed millions to Republican congress members and to President Bush. This was rewarded in 2001 with Pres. Bush's appointment of Timothy Muris, an attorney that worked for Amway, as chairman of the FTC. Muris has since left the FTC and several key Amway protectors in Congress (e.g. Rich Santorum in PA and Tom Delay in TX) were defeated. Dick Devos, the son of Amway founder Richard Devos, ran for governor of Michigan but was defeated.
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