Pyramid Schemes
Brother suing brother
Lawsuit Summary
"TEAM" vs Quixtar (AMWAY)
Headline: VETERAN INSIDERS CHARGE AMWAY/QUIXTAR IS A PYRAMID RECRUITMENT SCAM Aug ‘07
"A group of Amway/Quixtar's largest and most senior distributors have confirmed what whistle blowers, attorneys and some journalists and business analysts have been reporting for years -- 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. More…link
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. More…link
LAWSUIT'S PRELIMINARY STATEMENT: "Quixtar knows its products are priced so high they cannot be sold yet it continues to recruit distributors in a concerted effort to enrich the founding families at the expense of the rank and file simply trying to earn a living. Quixtar holds itself out as legitimate, multi-level home-based business opportunity, but in fact operates as an illegal pyramid recruiting scheme. Quixtar leads participants to believe they can build a viable business retailing Quixtar products; but once the participants sign up and their initial investment into the pyramid, it quickly becomes evident that Quixtar's products cannot be retailed because they are hopelessly overpriced. Quixtar knows its products are nearly impossible to sell, and that its business opportunity is not viable except as an illegal recruitment pyramid. Nevertheless, Quixtar imposes and enforces on its distributors (termed "indep bus operators") a strict noncompetition agreement that effectively prevents the IBO's from leaving Quixtar to pursue other, legitimate business opportunities. Quixtar thereby traps its IBO's into its illegal pyramid. So long as Quixtar is able to enforce the noncompete, these IBO's have no choice but to continue purchasing and consuming overpriced Quixtar products and recruiting new victims into the pyramid scheme, since that is the only way to make money with the Quixtar business opportunity."
"Small Distributors" vs Quixtar
Class Action Complaint (FL; 01/07)
David Boies (Al Gore's "hanging chad" atty in Florida) representing the people
Nature of Action "This is an action to recover damages caused by defendants' operation of a pyramid scheme. This pyramid scheme is fraudulent because it induces individuals to invest in products and marketing tools and to recruit new victims into the scheme with the false promise of enourmous profits. The pyramid scheme here consistsof 2 separate, but related businesses: Quixtar, Inc., a multilevel marketing business, and the "Kingpin Corporations," (of which TEAM is part of) which are a group of businesses that sell purported motivational materials and services to distributors of Quixtar's products. New entrants into the pyramid scheme are effectively required to invest money to buy products from Quixtar and "tools and functions" from the "Kingpin Corporations," (of which TEAM is part of). Because Quixtar distributors (euphemistically referred to as "independent business operators" (IBO's)) most often do not sell products to consumers who are also not distributors, they can obtain a return on their investment in the Quixtar program only by recruiting new distributors who will then buy products (and recruit more distributors who will buy their products), which purchases result in "bonuses" to the recruiting distributor." Link
This is what Chris Brady (top exec with TEAM & recent IBOIA board member) stated in a sworn affidavit in regards to the class action lawsuit: "A Class action suit was filed against Quixtar. The plaintiffs provided detailed allegations in relation to Quixtar's operation as being a pyramid scheme. I realize that many of the allegations will likely prove to be true, and I do not wish to associated with a company that operates in such a fashion"
If that's the way you felt... then
why keep selling the business, Chris?
