International Association to Expose, Study and Prevent Pyramid Schemes |
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September, 2022
From: Robert L. FitzPatrick
Is there Such a Thing as a Legal Pyramid Scheme?
Dear PONZINOMICS Readers, Colleagues and Friends,
It is my experience that one factor, above all others, confuses and defeats consumer efforts to expose MLM fraudulence and for millions of individuals to avoid loss caused by MLM.
This factor is the belief and the claim that MLM is "legal." On the internet and in news story after news story, MLMs are ominously described as "pyramid scheme" or "pyramid structured" or "pyramid-like", but in the same sentence MLM is also called "legal." Could there be such a thing as a legal pyramid scheme?
Confusion deepens when government agencies announce that "some" MLMs are "illegal pyramid schemes." But the few that are prosecuted as "illegal" operated for years "legally" and they appear identical to those that continue recruiting. The agencies never explain how to know which MLMs are crooked or why those few were prosecuted over all the others.
In Ponzinomics, the devious political methods used by MLM to secure a de facto "legality" – by preventing regulators from enforcing anti-fraud laws – are presented in painstaking detail.
Whether or not an MLM "pyramid scheme" is somehow treated as "legal" or de facto legal through dereliction of law enforcement, the following simple questions never go away:
- Is it legal to solicit money while concealing or withholding losses suffered by previous participant/investors year after year?
- Is it legal to make financial propositions – promising income – based on money being continuously transferred from future participant/investors on an "endless" investor/recruiting chain?
- Is it legal to call a financial proposition "direct selling" when the promised income is based on recruiting new investors, not personal sales?
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Is it legal to call a proposition an "income opportunity", even urging people to quit their jobs, when 99%, (effectively 100% of the newest investors) always lose?
- Is it legal to sell "distributorships" that have no intrinsic commercial value – unless the "distributor" recruits many others to buy the same "distributorships"?
It does not require a law degree to know the answer to all those questions is no, it isn't legal. Pyramid schemes can never be lawful, whether the law is enforced or not. To operate, a pyramid scheme must lie, cheat and steal.
So, how to explain MLM "legality"?
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How to Explain MLM "Legality" to Students when They Realize It's All a Scam?
In the upcoming Episode #5 of the educational podcast series, Ponzinomics101, veteran educator and teacher advocate, Melissa Milner, and Robert FitzPatrick face the question of how MLMs are "legal."
Episodes #1-4 clarify what real direct selling is and why MLM is not direct selling. They go on show how MLM and pyramid schemes have exactly the same basic traits and produce the same devastating consequences, and episode #4 sweeps away disguises and myths about what a pyramid scheme is.
Despite schools offering no courses about pyramid schemes and MLMs, many students hear that MLM is a big scam. But students do not know about "regulatory capture," political payoffs, and revolving doors. MLM's claim to "legality" therefore makes them especially vulnerable to MLM's disguise of "products", hype about "unlimited income", and claims to be career opportunities. "Legality" lends credence to what otherwise would be viewed as BS.
Episode #5 moves beyond business, pyramids and sales into real life Civics. It confronts, in plain language, hard truths about "lobbying", influence-buying and "revolving doors" between regulators and MLM.
It also examines the cruel convenience to politicians of letting the public think that MLM is a real business, its promise of "extraordinary income" is "legitimate" and that the American Dream is still available to all who seize the "opportunity."
When citizens are struggling with low pay, inflation, unstable jobs, debt, and can't afford healthcare, childcare, housing, higher education, or maybe even food, the podcast looks at the brutal benefit to politicians for the citizens to believe it's only their own fault.
That is exactly the (convenient for politicians) message "legal" MLMs spread to millions each year.
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PONZINOMICS OFFERED IN ALL FORMATS
Paperback and Kindle Versions from: Amazon
Narrated by the author, the audiobook is offered through:
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PONZINOMICS in the Media …
Anti-MLM Gets Its First Popular Novel!
Only in recent years have the real life effects of the MLM phenomenon shown up in popular culture. For years before, MLM was everywhere, yet invisible. In the disguise of "direct selling" MLM aggressively attacked critics and whistle-blowers with threats and frivolous lawsuits. I was subjected to one of these SLAPP suits. It took 5 years and a half-million dollars in legal costs to successfully defend myself.
The truth started breaking through not from news, universities, courts or regulators but in pop culture and civil society – stand-up comedy, sitcoms, social media documentaries and CableTV series. An explosion of independent "anti-MLM" podcasts emerged chronicling the lies and losses. The first non-fiction book to critically examine MLM comprehensively, Ponzinomics, was published in 2021,
Now anti-MLM is front and center in a popular novel. Author Donna Fernandez has published an engaging, entertaining, relatable, and informative novel of a young woman's life experience with MLM and how it affects her relationships, family, career, and self-worth. Ponzinomics is acknowledged by the author for helping her tell the story accurately and plausibly as it describes MLM.
Broke Georgia Goes Multi-Level is a story that millions have experienced. It's a modern tale, in the language of 30s-something adults grappling with the big issues of life where MLM insinuates itself – workplace, friendship, family, marriage, and social network.
E. Robert Smith wrote a previous novel, Downline, (2014) a courageous work of historical fiction in which the legality and political influence of MLM and efforts to outlaw it are central to the story. Donna Fernandez' novel is the first to place MLM in its daily life context -- diverting, dominating and disrupting lives and relationships with false hope, fake friends, delusional beliefs and pseudo-business claims. A central theme of Broke Georgia Goes Multi-Level is personal integrity, abuse of relationships, debt, financial struggles and the search for meaningful work, the real life challenges facing millions whom MLM seeks to con and exploit.
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Sincerely,
Robert L. FitzPatrick
Twitter: @pyramidalert
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