Amway/Quixtar Is Exposed and Crumbling, as Are the Defenders of One of Their Frontmen

UPDATE, 11 PM — “Quixtar court case in Judge’s hands.” This would be the A/Q case in Michigan against the “Kingpins” (see the text of this post for a full description). A ruling is coming down on Friday morning. Video is at the link (but I couldn’t get it to work).

_________________________________

Wow — I am truly amazed at how quiet this story has been; as of 1:45 PM today, a Google News search on “Quixtar” had only 20-plus results, mostly in Michigan, and none of them in national Old Media outlets.

Amway/Quixtar’s highest-level distributors — excuse me, “independent business owners” (IBOs) aka “Kingpins” — are going after A/Q with all the legal and other weapons at their disposal, including absolutely no shyness about “almost” completely and thoroughly discrediting the entire enterprise.

I got updated in an e-mail from pyramidschemealert.org, which has a web page on the litigation:

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.

….. 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. The charges – which are effectively confessions – come from Amway’s ultimate insiders, its “top guns”, wealthy distributors with downlines that span the world and have worked with Amway’s founders for decades. The distributors have filed a class action lawsuit.

A big PDF (all scans) of the lawsuit is here. If you want to see the initial dueling press releases, here’s the plaintiffs’ (”Amway Sister Company, Quixtar Inc., Sued by Distributor Group”), and here’s A/Q’s response (”Quixtar Takes Swift Action to Protect Its Business”).

I said “almost” in quotes in an earlier paragraph, because I am reluctant to assign any kind of noble thoughts to the “Kingpins,” especially after reading this from their press release:

“We are not seeking damages against Quixtar, or to shut Quixtar down,” stated Billy Florence of Athens, Georgia, a distributor since 1974, who noted recent regulatory inquiries into Amway in India and the U.K. “Rather, we merely seek a judicial declaration that the non-competition and non-solicitation provisions are unenforceable, so distributors who choose to do so can extricate themselves from continued forced participation in Quixtar’s illegal pyramid scheme and pursue legitimate business opportunities instead.”

I’m speculating a bit, but I would not be surprised that the following is what is really happening:

• The “Kingpin” IBOs have had a great racket for years — not from A/Q’s product business, but from the “tools.” The “tools” are Kingpin-generated selling and motivational tapes, CDs, books, and other items that lower-level distributors are expected (i.e., highly pressured) to buy, as well as Kingpin-run, profit-generating “pep rally” seminars and workshops low-levelers are “expected” to attend. These enterprises, which are essentially shakedowns that are mostly, if not totally, separate from A/Q, are more profitable, and probably far more profitable, for the Kingpins than the A/Q product business.
• Amway (then without the Quixtar) was on record many years ago as having a big problem with the “tools” businesses the Kingpins were developing, but then mysteriously backed off.
• A/Q’s discomfort over the “tools” business has returned, with the help of a class-action lawsuit filed by smaller IBOs, but the Kingpin monster A/Q allowed to grow has become unmanageable, and is on the verge of eating its parent.
• The Kingpins appear to feel than they can get by on their own without A/Q and build their own replacement businesses. Not going after damages makes them appear more noble, but the people involved are multimillionaires (just ask them) who don’t need the money as much as they need to wash their hands of A/Q. So instead of just one A/Q stealing peoples’ dreams, what the Kingpins apparently hope for is that, absent government interest in doing something to stop this madness, the USA ends up having a dozen or more A/Q equivalents. Grrrreat.

Regardless of whether my theory is accurate:

• The fact is that the Kingpins have officially called A/Q an illegal pyramid scheme.
• The little guys further down the food chain have sued A/Q over many things, including the Kingpins’ “tools” businesses. In the process, the little guys have called the A/Q setup, in combination with the “tools” business, an illegal pyramid scheme.
• The only people left in the whole enterprise who haven’t called it an illegal pyramid scheme are the owners of A/Q.
• The Federal Trade Commission badly needs to get off its butt immediately.
• The Republican Party needs to purge itself of any and all officeholders (no matter who they are) and campaign operatives associated with A/Q and/or the Kingpins, and, to the extent possible, refuse to accept any future political contributions from any of them.

Oh, and one more thing….

A lot of people gave me grief when I objected to being represented in Congress by a man who has profited from the Kingpins’ “tools” business as a “pep rally” speaker, internal infomercial host (fifth reason at link), and CD/tape seller; who kept his A/Q involvement, as well as his many years of lobbying, out of his campaign bio; and who (along with all too many others) has helped give the sleazy A/Q and Kingpin operations veneers of respectability they never deserved.

Regardless of how the legal wrangling turns out, those people owe me a big, fat “I was wrong. I am sorry.”