NOTE: For obvious reasons, the individuals who have sent us letters such as these are often reticent to identify their names or addresses. Many have suffered great losses or have family members who are still suffering but are in denial about the fraud perpetrated upon them. These particular letters were selected because they powerfully express problems with MLM participation of which many in law enforcement officials may not be aware. Victims of MLM abuse seldom file reports with law enforcement officials for reasons outlined in this chapter. However, they will write us because we do understand and can advise them on what actions they might take. Such actions will be discussed in Chapter11.

Impact of MLM on individuals and families

“Fancy Free” escapes the madness

       Everything on your website has been going through my mind in the past month.  About 2 months ago, I started on my “MLM mission” in Arbonne.  I was completely head over heels with the thought of “residual income” just for “sharing” with others how they could make “residual” income.   Now I am just sick about the whole thing, especially because a close friend of mine signed up under me.

       Every night I would cry just THINKING about having to go talk to people about the “opportunity.”  I was being forced by the whole MLM thinking to talk to friends I haven’t been in touch with and pester them or “drip” on them as my upline told me.

       I was continually told by my upline that I was feeling down because I was getting out of my “comfort” zone or because it was building my character. . . I was more stressed out then I have been in my whole life!!

       I had so much money into it that my husband didn’t want me to quit.  We even had to put MORE money into it at the end of the month so we didn’t “lose” our qualification quota.  The night I spent another $450 on our credit card to keep our “district qualification,” I broke out in hives. I have never been allergic to anything in my life, and I don’t think it was a coincidence. 

       So, after crying every night for a month and being completely sick about life I have decided to stop the madness!  Now I feel like I am FREE!  It’s amazing, I can talk to people without feeling the weight of “did you talk to them about ARBONNE??” on my shoulder.   I can’t tell you the relief I feel!  

       I regret that I got my very good friend involved and I am afraid of the rift it may have put in an otherwise great friendship.  I am not sure how I ever got talked into this or how anyone stays in it!  I appreciate your insight and humor. .

Thanks,  Fancy Free! (Erica)

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Family torn apart by various MLMs over the years

    Thank you so much for providing the truth regarding MLMs. Pyramid schemes have torn my family apart on many different occasions. My dad was involved in Dare to Be Great in the late 60s/early 70s. Now several of my family members are involved in LifeMax. It hurts more than you can imagine. Seeing everything get taken from us as children and now seeing the potential for it to happen again to my younger sister who has a 10 month old baby.

    Perhaps what’s worse is knowing so many people who are hurting in this bad economy are desperate and are turning to this. And how the scammers use God and “the chance to help starving people around the world”! It’s AWFUL!!!
Just a quick question, I noticed now when I Google ” LifeMax and pyramid schemes” that I can no longer find articles about people who’ve been burned (I know they’re out there). Seems that Lifemax has purchased all the key words and used Search Engine Maximization to continue to sell their “lifestyle” and silence the truth. They’re deceiving people even more than ever with articles that are disguised as legitimate reviews.  So, sadly, people will have a hard time getting the facts. Is there any solution or recourse?

    I’m lucky to have found your web site. I will keep it in my files for backup when I need it.

 – Paige B.

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more-f3

Daughter of Amway dealer who lost much of her childhood is still haunted by Amway.

       My parents were involved with Amway – the leading MLM – for 20 years. The costs to my family for their participation have been devastating. I and my six other siblings were robbed of my parents’ time, attention, and relationships because they spent most of their waking hours dreaming about their Amway business, going to rallies, seminars and functions that continued to fuel this fire but which eventually cost them their self-respect, their children’s and many friends’ trust, and tens of thousands of dollars.

       It also cost my father his college education because as he was beginning plans for attending school, he decided to join the Amway system because it promised to be a short cut to financial freedom. Now, after 20+ years of financial, relationship, physical and emotional loss, he struggles to find work that can support his family and pay off his gargantuan debt.

       I grew up with the secret that my parents were in Amway – I couldn’t tell friends what my father did for a living.  I only said he had his own business. 

       I couldn’t bring friends to my house because I was embarrassed that they may find out I didn’t have any bedroom furniture or that my siblings slept on mattresses on the floor. Not only have we as children had to pay for our own college educations and weddings, but we had to pay for our own school clothes, school supplies and other basics growing up; except for the time they received welfare.

       Even now I am not comfortable leaving my own daughter in her grandparents’ home because of its depressing state of disrepair. You may be thinking, well maybe my father was just lazy. But I am here to testify that my father and my mother worked the Amway business [with total dedication].

       When we went without the basics year after year we believed as children that if we were patient a little longer while my parents were gone showing the plan or attending meetings, they would one day “go Diamond” and it would all be worth it. We were going to be rich someday and then we would get our parents back; then we would have clothes and furniture and security. But the promise couldn’t be kept because the compensation plan for MLMs don’t make good on their word that it is an opportunity of a lifetime.

       If working hard and sacrificing your every waking moment for the dream was what it took, my parents should be at the top. They wouldn’t quit, no matter how much they and we suffered, they believed it was just around the corner so they kept working the business for 20+ years. The suffering created from belief in the lie and scheme of MLM will continue to haunt my family.        

– Daughter of Amway victim

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Woman wastes half her life and thousands of dollars on the false promises of 60 MLMs[1]

I stumbled upon your article on a complaint board about Arbonne and some others recently and someone mentioned that we should all read your article.[2]  So, I downloaded your audio and listened and everything was all too familiar with my own experience in direct selling and party plans I have been involved in. You will be getting the Readers Digest version because my story would be way too lengthy here.

I have been with so many companies over my lifetime, thinking the next best thing was just around the corner.  I signed up with my first party plan direct sales co. When I turned 18.  It was Mary Kay.  I loved the products and the neighbor who recruited me was just like family.  She became very successful and to this very day some long years later she is still selling as a director with the company. I always wanted to be like her and be successful and follow in her footsteps.  I went to college and sold part time.  I went to all the meetings and even their seminar in Dallas some years later. I was in and out over  a period of about 20 years.  I never showed a profit that I can remember.  Long story short, I had sent a large inventory back to the company as I was losing money and did not want my credit to go bad.  I could never sell Mary Kay again.  It was a very sad experience.  I have not heard from my director In years.

I kept going back to direct sales because I have always wanted my own business where I could work from home.   They make it sound so easy.   They would say, “Work part time hours, flexibility, vacations, trips, prizes, jewelry, a free car!  ” Wow, I wanted in!  I went from one company to another.  I would say at least 60 or so over the years.  I am now 40 and I feel I have wasted half my life on the promises made to me by others.  My accountant had advised me that rarely does he ever file taxes for direct sellers who actually ever show a profit from them.[3]  It is rare I guess.  I kept thinking if I just tried harder, if I just did it different this time, if I just had the right product to sell, I would make it.  I have spent thousands of dollars over a long period of time thinking things would turn around for me.  It becomes almost like an addiction to find the next best thing.  Now, I am both physically and mentally exhausted.  I read where someone said , “The definition of insanity is doing the same thing over and over expecting different results.”  Things that make you go, hmmm…..

I now have to move on and it is already feeling like I am out of my comfort zone because direct sales are all I have known most of my life. Heck, my mom even sold Avon when I was little. I wanted to be just like her too!  By the way, she quit, never made any money from it though.  She said she didn’t have enough time to sell it with us three kids and all. The supply costs were eating up her profits, especially the gas money running around making deliveries.

I hope to be able to still have my own home based business someday.  A legitimate one.  One that makes me feel good about myself. I don’t want to feel like a failure the rest of my life, because direct sales failed me, and not the other way around! Wow, 99 percent of people fail! So, now I have validation that I have been part of that 99 percentile all along.  And now I KNOW the truth from reading your article. . . Karla

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Get a real job at McD’s and make honest money.

       MLMs? Stay away from them and those that promote them. The pressure to join is intense and subtle. The guilt that can be applied is terrible.

My wife and I were in 7 different systems – Nu Skin, Amway, through to ACN and Usana. Each held the carrot of success and leisure before our eyes, and we could taste our prize. The tricks to get us hooked were ingenious, the pressure to conform was enormous and at times brought my wife to tears because we just couldn’t afford to attend a certain ”Function.” This of course showed that we were NOT committed to our success and would hold up our advancement in the organization.

       We made just enough money to entice us to try a little harder, spend a little bit more money on a NEW and BETTER lead generating system. Any profit you might make for that month would be swallowed by the next system that was sure to make finding your next downline a snap. Did we make any profit after all those years of chasing our dream? NO! Did we spend our grandchildren’s inheritance? No, but if we had continued, who knows?
The functions, weekly meetings, the phone calls from and to your all-knowing upline, the books, the seminars and the constant search for the ‘BEST’ lead generating system with their set-up fees and monthly lead expenses and your monthly commitment of product purchases finally broke our back and our spirit, and we quit.

       Where are all those upline ‘friends and supporters”? Nowhere in sight.

       Anyone looking to make money in MLM had better start by selling third rate used cars and get skin as thick as a rhino. Better yet get a real second job at a Mc D’s and make some honest money.

– George

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Girlfriend threatens relationship and dumps almost $50,000 into two MLMs.

       I am a Chiropractor in PA.  My girlfriend is pulled into MLM / Pyramid schemes “businesses.  She was deeply involved in Market America.

Brainwashed into spending her own money (Credit Cards!), purchasing products and working toward false “LEVELS” of achievement. Now reaching “Executive Coordinator’ and was almost pulled into the DEEP recruiting part of the business.

       She spent over $30,000 purchasing products, going to seminars and buying marketing strategies to “success”.  They had her brainwashed telling her she must put family, friends, relationships, work, everything second for the next few years to accomplish her “Financial Freedom”.  She almost left me.

       She finally left MA and saw that they were all cons and stopped spending full force, only because someone from another MLM, “UNIVERA” told her that their program was much better and easier to make money.  She admits she understands that it is the same “PYRAMID” scam as MARKET AMERICA, but tries to reassure me that she knows they are sharks, but she can work it “smart” and not get scammed.

       She believes the products are actually HELPING people, and justifies that is why UNIVERA is “ETHICAL”.  I managed to get her out of credit card debt (almost $50,000) and refinance that debt into her house payment and close all of the credit cards to stop the temptation of dumping money (22% interest) into this new MLM.

       It is destroying our relationship.  How can you get someone to completely stop involvement in these organizations?  When it comes from myself or family, she defends the programs and pushes away.  Could you please send emails to her, or to me warning of MLM/Pyramid scams?  How they are illegal and unethical, no matter how “good” the product is for people. Thank you,

 – Jonathan

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MBA grad sucked into 3rd MLM in seven years, sinks into depression

       My son lives in California, has an MBA and has been involved in network marketing for about seven years.  At one point he had a six-figure income and thought the sky was the limit (Cyberwize).  When his upline decided to change network marketing companies due to a disagreement and pending lawsuit, my son followed with financially unfortunate results.
Now he and the same upline are in a third company.  My wife and I have been pretty much supporting him for the past nine months.  He keeps thinking that he will experience a ‘break-through’ and be on top again, but he seems very depressed some of the time.  We are very worried about him.
Do you know of anyone who might help him to see the reality of the MLM lie?  I have tried to reason with him, asking him to discuss his situation with a job counselor on several occasions and offering to pay for the counseling.  No luck.  It seems to me that MLM is very much like a religious cult and that victims like my son will require deprogramming by a professional. I’m sure he won’t listen to me and has a pretty closed mind at this point.

– Anonymous victim with MBA

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Mom turns irrational regarding MLM

       For just some quick introductory back story of my relationship to MLM, my mother began playing the game with Excel telecommunications when I was about 12 years old. It was more than bizarre. She put 500 dollars on a credit card to buy miniature phone magnets, while I had to be on the free lunch program at school.

     But at age 12, it’s hard to tell your mom that she’s being scammed. And of course I wasn’t as equipped to do the research as I am today. Then flash-forward about 10 years, where she divorces and moves in with her mom. For a while she works normal jobs, and seems more happy than I’ve ever seen her. We all laugh to ourselves in relief that she has dropped the cultish Excel, but don’t bring it up, assuming that she herself is embarrassed about her participation.

     Then one day she drops all that, and relapses into Xango. When we finally confronted her about MLM, she had already spent all of the money she had gained in the divorce, lost a house, and went into what we are estimating is around $150,000 in debt.
I know you’re not going to believe this, but in almost every other facet of her life she is an especially rational person, but this one sector has her so brainwashed we don’t know what to do.

     Being as how you are one of the primary – or at least most visible – specialists on decoded MLM rhetoric and practice, I KNOW that you must get these emails often, so let me also say upfront that I’m not writing to beg you to fly here and deprogram my mom, though we (my brother and I) are desperately attempting to do so.

     In all my years of education, I never researched something as intensely – and neurotically – as this company and its mode of operation, mostly because no grade has ever been as important as the mental health and well-being of my mother.
In a frantic couple of months, I had compiled my research (beginning with Excel and ending with Xango) into a Power Point presentation that became our two-day long intervention. It was presented in a way such that I thought this was information she was unaware of, and tread delicately, as I felt like I was about to destroy something she loved.

     It seemed to break her emotionally, and when it seemed she was going to quit, she left on vacation, and came back, defiant like I had never seen her before, insistent that we are never allowed to bring up this topic again, and that she would continue to run rampantly into debt along with this magic juice Xango. We are the dream stealers. . .

       My brother and I have had the unique experience of borrowing my mother’s DVD’s and training materials provided by this company, and we noticed some peculiar things, one of which is the introductory DVD they give you when you sign up. On the DVD menu, there are 4 videos to choose from. When you play all, it plays the first 3, each of which are maybe 5 minutes long. The first two are essentially the regular MLM hype with limos and yachts, and then the 3rd one basically a commercial for training material for you to buy. And then oddly enough…it just turns off. That’s right, the DVD TURNS OFF.             

     But wait, wasn’t there a 4th video? So you go back, turn it on, and scroll down to the 4th video and press play, and it’s about an hour-long video giving you the legal side of what can and can’t be done in MLM, what health claims can and can’t be made etc. – basically the part of the video their lawyer made them put in.

     We made my mom watch it, because she admitted she never had, and it absolutely decimates the way this business is conducted. I mean, there is NO WAY any of these reps have actually watched or abide by this section of the video – not that that’s new to you… but it made me wonder if that becomes a legal issue, deliberately hiding that sort of thing. . . If any of this is help then I am glad to offer it, and if there is any complimentary information to what you have learned, I would love to know about it. Either way my sincerest appreciation for your dedication and your time,

– Richard

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Woman seeks MLM income to work from home but winds up having to work harder than ever to repay debt.

       I joined Herbalife as a supervisor on June 8th 2005.  I joined through the marketing company Online Business Systems.

I became a supervisor because my coaches said that it was a proven marketing plan and that if I had a desire and worked hard then I would be able to replace my income within 6 months.  My goal wasn’t to become extremely wealthy.  It was just to make enough so that I could stay home with my children.  That amount was around $1700 per month that I would need in order to complete my goal.  I am a hard worker and I do have a strong desire to succeed and even though my husband had some very strong reservations against this plan, I was going to prove my ability to make it work.

       I worked my regular 40 hour weeks and then put in countless hours recruiting and selling product for my Herbalife business.  The first month that I was in business, which was July of 2005, I produced $10,000 in business for Herbalife. This achievement propelled me to the level of World Team.  I received a check for $450.  I thought that I was doing very well and that what they had told me was true:  Desire and Hard Work = Freedom, Time, and Money.  However, this excitement died very quickly.

       When I began this business my “coaches” told me that if I was going to do this at all I needed to invest some money so that I would have the ability to make it work.  I was promised that if I followed the steps that they gave me and with their help and expertise I would make my money back in the first month.  I invested approximately $4,500 on a credit card.  I spent the next 8 months the exact same way as the 1st month but without the results. I was only fattening Herbalife’s coffers while putting myself and my family at extreme financial risk.

Everything I was told about this “business” has been a lie. None of Herbalife’s representatives told me that according to their “Statement of Average Gross Compensation of U.S. Supervisors in 2004” only 1.5% of “Active Leaders” earned enough to meet the “pay to play” requirements of $2,000/month in Herbalife sales/purchases in order to qualify for commissions and advancement in the program – and that more likely less than 1/10 of 1% of ALL distributors (including dropouts) ever earn enough to report a profit on their income taxes after subtracting the most minimal expenses needed to be “successful.” Had I known this crucial information, I would never have invested a penny in their program. To even present this as a legitimate income opportunity is a huge misrepresentation.     This MLM scheme is fraudulent and should not be marketed as a money making opportunity. I did follow all of the steps and I did work very hard which is a proven and solid fact.  These were the conditions which I was told would produce a profit.  I followed the plan and it didn’t work.  Everyone who gets into this business is lied to and in turn required to lie to others to achieve even a little.

 – Nicole L., Utah

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Photographer misled by MLM recruiter & loses over $15,000 (Excerpts from a copy of the letter that was addressed to the president of the company):

       I have been married for fifteen years and we have four children – ages two, six, seven and ten. I home school them. I am also a photographer. I began my home studio in late September of 2006, so I am still in my very fragile first year of business. My husband also is self-employed with his own ceramic tile and hardwood flooring business, which provides our family with just enough to manage a growing family of six.

       In late January of this year, a Photomax Distributor contacted me.  She had purchased my name in a leads package. She went through the scripted call with me, and I listened to the recorded voice on demand call made by Laura. I was interested in Photomax as an addition to my new photography studio. It seemed possible to me that I could use the lab and sign people up as customers. I thought that I could earn a decent commission from all my new customers to help fund my new studio, as well as help with family needs.

         According to Laura’s voice recording I could get started in this business for next to nothing while using what she called “OPM” or “other peoples’ money” because “nearly every business gets started this way” and that “it only cost most people about $25 in interest to get started” with the $1350 Fast Track package This is the package which is meant for the “real go-getters” who “want to quickly begin earning the bigger money faster.”

         According to Laura, going with that package would position me to, “begin earning several thousand a month quickly, earn higher commissions and be entered in a monthly bonus pool, which is like a profit sharing plan, with checks ranging anywhere from $1200 to over $20,000 a month – on top of your regular commissions.”

       I was led to believe that I could use the opportunity to help support my family. I was told I only need to bring two things into the business. These were “commitment” and “coachability,” which meant I needed to do everything my upline told me to do.

       I was immediately sent out training information and training call schedules and told I should attend a minimum of two training calls a week and at least one prospecting call to be successful. I was also instructed to make a list of goals and set my time commitments.

       All of this I did. I also was told to provide a list of at least 30 people to contact; I then listened in on three-way calls while my “success coach” called them for me. I was given a list of Lead resources and I listened to every recorded training available on the “Millionaire Max” web site. I was completely coachable. . . .

        It is now August and almost a full six months later, after hundreds of hours of work making thousands of calls and contacts, I have been able to sign up only one recruit who quit the first month, and I have received approximately $400 in commissions. Thanks to this Nu Skin scam, I now have a debt of “OPM” (your OPM) totaling $15,456.97!

[OPM is “other people’s money”.]

       That is not at all what the “Power of Four” model showed! That is NOT what I signed up for. I have a young family that this company has preyed on by using unethical methods. Your company has distributors playing on peoples’ emotions and is causing great harm to families around the world.

       What you have with Nu Skin are a few people at the top making millions of dollars at the expense of middle and lower income people who are defrauded of their funds through one deception after another. There is a form of emotional abuse of distributors going on that is not only causing emotional pain, and family turmoil, but is causing financial ruin to many. What you have no matter how your attorneys word it is a pyramid scheme!  

       Now I have to wonder as well about the supposed successful uplines like mine. Are they actually even able to retire? If they are making such great residual income and are now millionaires, then why do they continue to recruit? It is surely not out of the goodness of their hearts, as they would have their downline believe. .   I did not plan to fail and I will not fail! I will not let your monster company ruin my family relationships or businesses by adding this unnecessary debt to my family. . . This type of scam needs to be exposed more fully to protect the public. . . .

Seriously,

Scammed by PhotoMax (Div. of Nu Skin)

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Son gives up college for MLM         

       OMG, Dr. Taylor, your research is incredible and a direct hit. I’m trying but this cult is getting stronger as our economic down turn continues to plague us. However we survived harder times. . . It is sad in this case because this family will pull their son from his sophomore year at University of San Francisco to work full time in this cult. I escorted my family members to this conference and felt like it was a version of the Jonestown revival act episode II.
You are our hero!

Kind regards from California,

Karen

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Homeless person left to walk 20 miles because he didn’t join

       Hello sir, I am sort of an information addict.  One of those people that get lost for

hours on Wikipedia sometimes because I enjoy reading and learning.

       I had become homeless due to a

massive heroin addiction and was panhandling on the streets.  A young family came over to me and said they could help me kick my habit and put my life back on track and then offered me $20 to go with them.  I needed the money so I accepted.  They took me to a sales meeting with all these well-dressed people and the words “marketing” or “direct sales” were not used before the presentation.

       However as soon as the presentation started I saw immediately what this was.  I asked to talk to the people who brought me there in the lobby.  When we got out I asked him how I was supposed to invest $200 in a start-up kit when he had picked me up on a street corner?  He said that this was a good way to get myself back on track. 

       When I told him what I needed was rehab and then job security he switched around and then did something that proves just how soul-less some of these true believers can be.  He told his wife to go back inside and then whispered to me “think of all the drugs you could buy earning thousands a month”.  I was nothing but a dollar sign to him and I said I may be a drug addict but I have a soul, I couldn’t live deceiving other poor, lost people like myself for a living.  When he saw he wasn’t going to get to me he demanded his $20 back and told me to leave.  I ended up walking 20 miles back to the city. 

       I have almost a year clean time now and a wonderful job making food at a hospital.  I may not be making millions but I’m still alive and feel like my job means something. Every day I make food for people with terminal illnesses and have grown to become good friends with my co-workers and customers.

       These MLM companies are preying on people’s misery and perpetuate a cycle of despair and cruelty.  They accomplish nothing for the good of society and not only that, they warp how people treat each other.  Friends become clients, families become numbers.  It’s sad to me.  . . Thanks for letting me share.

–      Nick

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A woman’s family has for decades been torn apart by MLMs:

Thank you so much for providing the truth regarding MLMs. Pyramid schemes have torn my family apart on many different occasions. My dad was involved in Dare to Be Great in the late 60s/early 70s.

       Now several of my family members are involved in Lifemax. It hurts more than you can imagine. Seeing everything get taken from us as children and now seeing the potential for it to happen again to my younger sister who has a 10 month old baby.

    Perhaps what’s worse is knowing so many people who are hurting in this bad economy are desperate and are turning to this. And how the scammers use God and “the chance to help starving people around the world”! It’s AWFUL!!!
– Paige B.

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MLM and love lost:

For a gripping story about MLM and its effect on the author’s relationship, go to  Tin Promises.

Feedback from around the world

Egyptian at German University sees MLM as epidemic disease that threatens his third world country

      I am Egyptian living in Cairo and working, as appears in my signature, in the German University in Cairo.

      The spreading of the network of that MLM spider at my university terrifies me. Actually, this industry CHANGES people. My friends have changed! They act weirdly and treat me as a “customer”. In addition, some of my colleagues, who are supposed to be researchers, left research and are now active for MLM!

      Now, to be honest, I am being their opponent. I am trying hard to stop that epidemic disease that threatens our community; especially that I am in a third-world country where people tend to be lazy and unproductive.

      – Mohammad A., Egypt

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Swiss financial advisor warns friends and family in Spain against MLM

     [MLM-thetruth.com] has been extremely helpful as I am Spanish and live in Switzerland and was never aware that such schemes were actually legal. I have been approached by an ex-colleague in Spain to join the so called FANTASTIC opportunity offered by Agel because they are opening up their Swiss branch and at the same time my brother in Spain got contacted through colleagues. It took me 5 minutes to look at their website, see their recruitment video to understand it is all a scam.

        I am a financial investment advisor working in the financial industry now for over 7 years with a long experience in marketing-sales jobs (I worked 5 years at Goldman Sachs) so it wasn’t difficult for me to see that it is a scam.

     That said, I am shocked the regulators in the US are so bland on these types of schemesand I believe I had never heard of any of them in Europe until now. All your research has been extremely insightful and hopefully helpful (time will tell). I have on as well.

– Rosa forwarded it on to my whole family and network of friends in Spain and asked them to forward it.  – M., Switzerland

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Woman in London finds Nu Skin recruitment methods deceptive:

       Nu Skin is currently putting ads onto London Craigslist, an online job forum in London, England. I sent an application and was invited to a 50-minute or so telephone call with a lady in France called Clemence, another lady from Strasbourg and a man called John who claimed to have been with Nu Skin since 15 years.

       I had originally thought that they were looking for a distributor to get them into big department stores.
I checked the Nu Skin website and saw that the prices are very high. I could not understand how it would be possible to sell the products with a profit. I was amazed to hear from John that he had recruited thousands and thousands of people.
They put real pressure on me during the call and wanted me to sign up as a distributor either for 85 Euros (one-time fee) or 45 Euros (monthly recurring business). It made me suspicious that they insisted on this as the ad said no capital outlay. I was also not interested in trying their product as I use my standard products which are cheaper.
Then I came across your article, thank you very much for your website. Before I came to your website, I was on another MLM website http://mlmtuition.com/kwcp/success/3837/200570, the MLM mastermind system.

       I was suspicious when John told me that people in Hungary are making $20,000 a month with their products. What is worrying is, that they are placing their ads on job sites in European countries now. Thanks again for your web site.
Renata L.

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Woman wishes she could put an end to MLM deception in South Africa:

      I have been reading some interesting information on MLM. I cannot believe, looking back at it now that I fell so hard for MLM (Nu Skin) to be specific.

       I wish I could expose what is happening here in South Africa as to put an end to the deception but I guess that would be a waste of time since people still believe what they want to believe – and they would much rather believe that MLM is a legitimate opportunity

      Anyway, it made me feel better to read your stuff

       Kind regards        – Lerina

Insights of professionals

From a licensed private investigator:

You guys rock!!

        I can’t tell you how useful your site is.  Thank you so much for proving that ethics, moral standards and common sense are not lost.    I have a friend who gets involved with the newest MLM every time a recruiter asks him to come to a meeting.   It has become such an issue that it has affected our friendship.  I will refer to your website often to counter the nonsense and unethical behavior that traps people like my friend.  I commend and thank you for your efforts in helping people who truly are victims of this economic cancer.
I am a local licensed private investigator that would love to help you in any way I can and if I have the time.  (My time would be free of charge)  Please let me know if there is anything I can do to helpfurther your cause.  I will do anything to help the public see these for what they are, because in one way or another they affect all of us.

–Jake A.

When I wrote Jake to thank him. I explained that my advocacy is all voluntary and that it is heartening to receive such a letter to counter all the deceptions I hear and hate mail that comes my way. He responded as follows:

     “You’re a good man and the only reason anyone could possibly use to justify sending you hate mail is ignorance.   I think a lot of people are playing for the wrong team and just don’t know it yet.”

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Doctor warned against MLM product. And it’s OK to work at a job for money:

Hi, I was doing research about MLMs and found your site, it was very helpful. The new item is “MaxGXL” offering kind of a wonder drug, well supplement. My wife has medical history and thinking this might help her I did research and took the product to her doctor before she even tried it. The doctor said it can cause her kidney damage and maybe failure, so I am not doing this.
I was asked to join and I told them if this helped my wife I could sell the product but I was told to take the product myself and wait on her, then join and get people under me –  that’s all I needed to do.

I was thinking this could actually help people and to be honest never really heard of MLM but yes I have heard of the pyramid schemes. Anyways thank you for making things understandable for people that don’t know too much about these programs. [Instead of MLM,] hard work and lots of patience is usually what earns the good old American dollar.

Thank you

–      Ron D.

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Attorney mom finds web site helpful in debunking deceptions

I found your website (mlm-thetruth.com) and all of its information extremely compelling and useful, thank you for it.  Here is my dilemma, I hope that you can take a moment to respond.
I am an inactive attorney in California, currently staying at home to raise my 15 month old son (I also have a first grader).  I received a call from a friend (also an attorney) telling me about this great “business opportunity” and after speaking with her I agreed to attend a PBR (personal business reception) about this wonderful new deal.
It sounded good of course, but light bulbs went off in my head for various reasons so I stalled my friend (I’ll call her “Donna”) and told her that I would think about it and get back to her.
Needless to say I did some further research, found your website (and others) and realized what a huge scam ACN (and others like it) really is.  Here’s my issue:  I really like Donna, she is about 10 years younger than me and I knew her when she was still a law student.  She is now a public defender (as I was when I first graduated from law school) and is pushing ACN.  She learned of the business from her boyfriend (now her fiancé) and even got her mother involved in the “business”.   She’s very into it because she wants to have a family one day and stay home to raise her children but her law school debt is over $100,00.00, etc.,  and this looks like the perfect vehicle.  You get the picture.
I think what pulls the wool over people’s eyes with ACN is that they are not selling products (the lotions and potions you describe) but claim to be offering for sale something people use every day, the service on their phones (mobile and landlines) and of course the right to become a representative to sell the service to others.  So it seems distinct from an Amway or an Herbalife because people do pay for mobile (and cable and internet) every month, so why not sign them up with ACN and watch the dollars just roll in?

     Donna just called me the other day, and asked if I would at least sign up for a service if I did not want to become an “ACN representative”.  I intend to put in writing exactly why I am not interested but would like to know how can I best refute the claims that ACN specifically makes.

    I know that I should just tell her no in conversation and move on but as a fellow lawyer and because she is someone I really care about, I feel compelled to make a strong case to help her understand what a mistake she is making.  I shudder at all the social capital she is expending, never mind all the money she’s already invested in seminars and trips to conferences (I attended one in Modesto CA and was surprised at how many people were involved!).  Of course I will tell her about your website, the Merchants of Deception book and the fact that ACN was barred from “selling” electricity in California in the mid 90s but anything else that you may have on ACN would be greatly appreciated.

     Jon, Donna and I are both Latino and we speak Spanish and she keeps talking about how ACN is going to open up in Mexico etc. and I just cringe when I think of all the people who could get taken in by this and by someone speaking to others in their native tongue.  It just seems so wrong to scam someone and the fact that we are lawyers which gives us added credibility sends chills up my spine.  What really kills me is Donna really BELIEVES.  She would never bring her mother (a real estate agent whose business is right where you expect it to be in this economy) or speak with me about this otherwise.  She is sincere. We both have always cared about those less fortunate, hence our professional choices.
– Vylma O.

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Tax accountant never sees clients profit from MLM

I was first exposed to Amway, by a young recruiter, in the summer of 1977, months after I graduated from the local private university.  I turned down the opportunity, then, but the MLM business model has, since then, intrigued me. . . but not in a good way!

       For 31 years, now, I have prepared tax returns for clients, some of whom, try to recruit me into their “great once-in-a-lifetime” business opportunity.  At first, my reaction was to be gentle and friendly.  Now, when one of my clients tells me he is doing so well, I am bold to say, “C’mon, John . .  I am the one who does your tax returns, every year!”  I have never seen a client profit from one of those “low ticket,” product-based, recruiting MLMs!

       Now, being a resident of California was one thing.  Everything changed, in 2006, when I got married, and in January 2007, I relocated to Utah, the MLM capital of the world!  It is unbelievable how many “MLM-Hoppers” there are, out here!
So, though it may be me against the MLM establishment, I published an advisory article online.  And, even then, in the last year, two MLM recruiters, who had read my website, tried to recruit me!  (Of course, their MLM is different!  Yeah, right.)

       I will do anything to help the public see these for what they are, because in one way or another they affect all of us.

– Phil F., CPA (Note: For data from other tax people, see Survey of Tax Preparers.

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Analyst uses web site to debunk the deceptions in one MLM and in MLM as a business model.

       I found your paper on the internet – the five red flags to identifying product based pyramid schemes.  Very informative.  I have some friends who are caught up in the Arbonne scheme.

       It definitely meets the five red flags and as you said the compensation structure is the key.  It has the emphasis on recruiting, you have to pay to play in personal retail volume, there are 6 levels of payout, and the “promotions” are based on recruiting rather than by appointment.

       The products can supposedly be sold at retail for a higher consultant commission but this is unrealistic because everyone signs up as a non-active consultant for $29 and can order over the internet at “wholesale”.   If you want to be “active” you have to do $100 per month retail volume ($65 with consultant’s discount)  and at  the bottom commission rung of 4% you have to sell to quite a number of customers to recoup your required minimums – so then the emphasis becomes on recruiting.

       To jump to the 8% commission level a $1,000 in personal retail investment is involved to qualify within a certain time frame – so they have the opportunity to stick you for this more than once because you buy kits to get started.  They pay on 6 levels – they have a width/depth structure.

       I forwarded my friends your paper and tried to get them to understand that what they are involved in is unethical at a minimum…but they just sent me back the published hype – all the typical things you referred to in your paper.  I think one of these people got in early enough in the scheme that she may be making some money.  These [MLM] companies seem to prey on housewives who don’t understand the basics of market supply and demand.  They are so naïve that they cannot see the forest for the trees.

Thank you,

Susan S, MBA

Susan wrote later: 

       Yes, it was an interesting learning experience for me.  I had never been approached by something like this.  I also didn’t remember covering these schemes in any of my course work in my undergrad or MBA marketing classes.

       It was the compensation structure that got me suspicious – when I realized that these minimum purchases were involved I started doing a little breakeven analysis and realized how much I’d have to sell at these low commission rates to just make back the money they have you spend as monthly minimums.  It really does not become clear until you start to calculate how many people you have to sell to just to break even!    Then it became clear to me that you had to recruit people to make any money.   I thought this was very fishy – and so I jumped on the internet and found your article…and then it all really clicked in my brain. 

– Susan S., MBA

 

Insights from MLM insiders

MLM job applicant asked if he preferred being a pimp – or a prostitute!

     I worked for Nu Skin enterprises, at the company headquarters for over 10 years.  I worked in many departments and had many roles including; commission systems, marketing, competitive research, returns, customer service, account executive,  and manager and SAP implementation team.  I LOVED working for Nu Skin, it was a wonderful work environment!

      One day back in 1999 they “downsized.”  I was hit-up by every MLM around and never joined any, then one day I was reading in the Epistle of James . . . just kidding.  Actually I followed some of my supposed friends to other MLM’s, one of which was XANGO.

        I asked for a job but they wouldn’t hire me and instead suggested I become a distributor, I said “no” I prefer not to work on the sales side for many of the same reasons you share on your website.
I was speaking to Dr. Pendleton at the time and he said, “What’s wrong with being a distributor?” I said it wasn’t my thing and he made a statement that really turned me off about ALL MLMs. He said,“Oh, you are OK with being a PIMP, but you don’t want to be a PROSTITUTE huh?” 

           I always looked at what I did at Nu Skin as honorable work and employment, but after a twisted statement like that, I find any MLM distasteful and I would like to help in any way I can to “Get the Word Out!”       I am fighting an uphill battle since some of the TOP distributors from Nu Skin and Noni are actually close relatives.  What direction would you suggest I take with other family members to not get sucked in?  It’s funny, after ten years in ALL aspects of MLM, I would almost consider myself an Expert, but when family (in-laws) see the big houses, nice cars and freedom to go and do as they please. . . all my expertise goes out the window.  What to do, what to do?

      By the way, the DSA has direct sales statistics with graphs and everything but one statistic that I no longer see on their site was what percentage of revenue goes to the company and what percentage goes to actual distributors to pay commissions??? If I recall correctly from seeing it over 5 years ago, over 75% goes to the company and the rest in paying distributors.  After dividing the $17 billion between the 3-400 MLM’s, then dividing those numbers by the millions of distributors and taking all of that from only 25% of the $17 billion, I find it hard to believe ANYONE wouldn’t head to Idaho and put all that time and money into Lottery tickets???

Aaron T.

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From a former employee who worked in call centers of two MLM companies:

Thanks for your awesome website! I finally quit working at these MLM call centers. I am done forever supporting these terrible businesses. I worked at Nu Skin and MonaVie.  They both treated me well. But really, it felt like working for the mafia deep down inside and I kept rationalizing it because the pay was good (as a college student).
It is sad when I think about all the people that worked in these call centers that touted it as such a great business. The managers all thought it was the greatest thing and I always wondered how they could be so blind to how many people were falling prey to the “business.” I didn’t complain outwardly at work, but I was not a loyal employee on the inside. I despised these companies.

       The things you have written on your website I have seen every day. Especially the part about self-deception. I really do feel that all of the distributors involved either are corrupt and knew it or just somehow convinced themselves of the legitimacy. Taking a step back it is so easy to see the ethical problems with Nu Skin and MonaVie.

    MonaVie is extremely despicable in my eyes. The juice is absolutely ridiculous. It tastes great but the only claim they can really make is “antioxidant protection.” The juice has obscenely high antioxidant protection; more than is needed even.
    I have seen so many people on fixed income that are wasting their money on cases of juice. They really will sacrifice other important things because they believe “maybe next month I can earn something” and so they keep buying in. I even saw a few people using their unemployment money on it! There are so many times where I wanted to tell the person on the phone: “You aren’t going to make it, please get out!”

    The other thing that really gets me is how they cover behind their humanitarian work.  Don’t get me wrong, I know it is a good thing to help anybody out, and they are doing some good. But around MonaVie headquarters, there were pictures of poor Brazilian kids plastered everywhere, and it was just so fake.

    Your website helped me a lot in moving forward according to how I felt on the inside, so I wanted to thank you.

–      J. D.

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Former MLM insider uses web site as ammunition against “MLM cancer”:

I just wanted to let you know how much I appreciate your cut-to-the-chase information about MLM and everything related to it. It has been a continual resource as I am approached often about the next great business opportunity that will make me a millionaire. I am a web developer and have worked on the inside of a MLM and saw firsthand the continual plot to capitalize on the failure of others. This site has given me ample ammunition against the spread of MLM cancer.
– Mick D.

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Insider reveals obscene wealth of founders:

A family source (an ex-husband) of one of Nu Skin’s founders reported in a confidential interview that one of the founders includes among her holdings at least ten homes:

“I am just guessing, but I have a fairly good idea. The one in Sandy, Utah, worth about 6-7 million[dollars], one in Deer Valley; about 4-5 million. One on Maui or on Oahu: about 3-4 million. On Kauai she has an  amazing house worth at least 8 million. We bought also that together like the one in the Trump Intern. Tower, worth now about: 4.5 million. One huge penthouse in the Time Warner Building, also on Columbus Circle, worth about 36 million. A lot of land in Deer Valley worth at least 5 million. Land in the Oakley is worth anywhere between 10 and 30 million, depending how you handle it. A condo in Park City of about 1 or 2 million, the Oakley Cabin; at least 15 million. A ranch in Oregon: 3-4 million, a farm in Spanish Fork, Utah: 3-4 million. Land in California, my guess is as good anyone’s. She owns a lot of stuff I have never seen. My friends have seen the paperwork and it is quite impressive. She also bought and sold a $17. million condo on 515 Fifth Ave. while I was with her. Do you get the drift?”

     A magazine article reported she also owned a Gulfstream II private jet.

      Her brother, Blake Roney, is reported to be worth at least $800 million. Other key figures have accumulated tens of millions each.

      Of course, these leaders have initiated and donated to humanitarian causes, and they use this to justify their exploitive scheme. And believe it or not, many in the public and the media buy into this thinking. “They can’t be bad people, if they do such good things.” To use an appropriate metaphor – If you rob a bank and then give 15% to charity, the bank robbery is OK, right? Sure.

      And as for the 3+ million distributors (since the company’s founding) who have paid to get into this opportunity of a lifetime? According to my calculations, based on Nu Skin’s own reports, approximately 99.9% of the company’s recruits lose money, after subtracting required purchases and the bare minimum of operating expenses. Less than one in 400 distributors ever turns a profit. Perhaps less than one in 20,000 earns the “substantial residual income,” also referred to as “permanent income” – that is promised to new recruits who are deceived into investing in this money trap.

      BTW, this is not just Nu Skin. I have studied hundreds of MLMs and found a similar pattern with every one for which I could obtain data. You would be doing friends and family a great favor by using the “Answer cards” on my site to warn them against ALL MLM/chain selling programs. (It refers them to my site for more info).

 

Mlm-thetruth.com reveals deceptions typical of MLM

 

5 Red Flags best detection method for MLM fraud:

     In 40 yrs. of studying MLM fraud I have not found a better detection method than the 5 red flags found at –  mlm-thetruth.com

–      Frank Thomas

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Man thanks mlm-thetruth for keeping money in his bank account

       First off, let me say that your site is an absolute wealth of knowledge on MLMs, and is what started to make me question a recent proposal that sounds a little too good to be true.  [After reading some of your reports], I went back and listened to the compensation plan again on UCI’s webinar. They specifically state that selling the energy alone is a waste of time, that you need a “team” to get the most out of the program. I am officially disinterested now.     Thank you very much for your vast, knowledgeable website, and the money you kept in my bank account, both long term and short term. I will definitely take a long look at your 1,357 ways to make more money [than MLM] list.

–      Dan M.

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Unmasking MLM deceptions via
mlm-thetruth.com

     Thank you so much for all your hard work in “Un-masking” the truth about these scams!!!
  I almost got involved with Fortune High Tech Marketing because of a friend. Wow!!! You hit it right on the head. Your “Typical Misrepresentations Used In MLM Recruitment” put it to rest for me. THEY ALL FOLLOW THE SAME UN-GODLY LIES. Just to make money off the reps. It’s a numbers game. The more people under you, the more people get ripped off to pay you!

      I wish the Federal Government would put a stop to these people! Or at least the “Federal Trade Commission”.
– John T. (not Jon Taylor)

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MBA grad sucked into 3rd MLM in seven years, sinks into depression

       My son lives in California, has an MBA and has been involved in network marketing for about seven years.  At one point he had a six-figure income and thought the sky was the limit (Cyberwize).  When his upline decided to change network marketing companies due to a disagreement and pending lawsuit, my son followed with financially unfortunate results.
Now he and the same upline are in a third company.  My wife and I have been pretty much supporting him for the past nine months.  He keeps thinking that he will experience a ‘break-through’ and be on top again, but he seems very depressed some of the time.  We are very worried about him.
Do you know of anyone who might help him to see the reality of the MLM lie?  I have tried to reason with him, asking him to discuss his situation with a job counselor on several occasions and offering to pay for the counseling.  No luck.  It seems to me that MLM is very much like a religious cult and that victims like my son will require deprogramming by a professional.  I’m sure he won’t listen to me and has a pretty closed mind at this point.

–      Concerned parent

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Woman bombarded by friends wanting to practice presentations on her.

       Thank you for this site.  I like how organized it is and not full of ads and other bogus marketing.  I have seen enough of that.
I hope this site can help my friends. I have been bombarded with Primerica and Agel bull crap, and I have been sending this link to my friends who are trying to “practice
their presentations” on me.  God Bless,

Stephanie B.

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Prospect at MLM meeting did not feel good vibe about the MLM hype:

Dr. Taylor,

    You offer outstanding insight on MLM’s. I recently had been invited to attend a meeting on Fortune Hi Tech Marketing. I went and listened. I didn’t feel a good vibe about what they were telling me, so I did some research and found your website. I found it very informative and interesting. I made the conclusion not to join FHTM. . . It appears that the “pay for play” aspect is very much involved in this MLM. – Tim W.

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MLM obfuscation compared to IBM:
In the brief time that I have been “communicating” with a bevy of “Coaches” at Nu Skin, making the obligatory cold calls, listening to the various audio programs that are supposed to “inspire” me to “Blue Diamond” status, I can only say that if my very brief experience could be made into a movie, it would be titled, “Willey Wonka and the Kool-Aid Factory”.

     Rarely are the products ever mentioned and as far as the Coaches providing me with any type of Standard Operating Procedure (manual or online version), the total lack of this kind of important resource reminds me of what once was said about how IBM or Big Blue used to indoctrinate and “groom” their executives like they were mushrooms, or in plain English, ” KEEP THEM IN THE DARK AND FEED THEM BULLSHIT”.  I hope that your website [is seen by many MLM prospects] and thanks for your work on behalf of all of “US”.
– Lee H.

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Time to start a real business:

Thank you for your website. It opened my eyes to a lot of things! I am very young lady but had about 30 jobs in my life and scammers just love to take my money…

    It’s time to start my own business (not MLM). Thank you for ideas! (“1,357 Ways to Make More Money than in MLM”)

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Red Flags go up when a skin care line is promoted with typical MLM hype:

I personally would like to thank you for shedding light on MLM schemes. I read through your entire article, as I was suspicious of the “business opportunity” I had just become aware of through my friend, who invited me to a meeting earlier in the week, and today to an event with a motivational speaker.

      I decided to investigate this company she’s been telling me about, as I’ve always been interested in health and beauty for women and saw this as an opportunity to perhaps generate some extra income.
      My BS radar is pretty high and a couple of things said today and earlier in the week bothered me – when the speaker mentioned he “was doing it all for the glory of the Lord.” Please, this is the Bible belt but that doesn’t legitimize any business venture for me. Instead it raises a question of hypocrisy and doubt in my mind. I don’t like when people use the “Lord” as some kind of tool to convince me of their sincerity. Frankly, it convinces me otherwise.
Also, when much of what is discussed is “how much you can make” – that bothers me too. Also, saying that “You owe it to your children” – using an emotional tug – that didn’t sit well with me, either.

The product was barely discussed – the potential to change women’s lives by using it – and if this product was created by women and is all about women, why were so few women actually speaking? And the ones that did speak of, I wasn’t very impressed with, as I’ve been in sales myself for a while and am a pretty impressive speaker myself, so it takes a lot to get my notice. With all that said, I decided to come home and do a bit more research on the topic and I was glad to find your website. Now I want to discourage everyone I met – to not get involved with this venture!

–      Diana C.

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MLM scams harm individuals and society financially, relationally, and morally

     Recently a close friend of mine got involved with ACN with her grown son and husband.  She has turned into a brainwashed zombie and because I’m less than enthusiastic about it (I haven’t said anything disparaging, though) our relationship is slowly waning.  She’s bought into it hook, line and sinker. It seems that at this point she would just rebuff my critical analysis.  It has spurred me to do a lot of research, however, and I’m indignant to see it has become a global phenomenon to the detriment of all.

      Thank you so much for hosting this website.  The truth about these scams needs to be presented as an antidote for the lies of illusive riches which only appeal to ones baser nature. I feel these scams harm financially, relationally and morally to individuals and society as a whole. It seems the cancer is growing and spreading to developing world which can ill afford to slow their economic progress. Thank you

–      Concerned


[1] Letter to Robert FitzPatrick of Pyramid Scheme Alert January 9, 2014

[2] “What About This One?” –pyramidscemealert.org