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Irrefutable Facts About The Kingpin Level
Merchants Of Deception!

 


Eric and his wife with Fred and
Linda Harteis at yet another
Amway function. Little did the Scheibelers know that their relationship would
change dramatically in the future.


CLICK ON IMAGE
TO ENLARGE



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



























































 

 
Case Studies / Fred Harteis...Master Salesman?
 

“You never built this business. But, I’ll guarantee ya one thing. You do what I recommend, I’ll guarantee ya this business will work for you. You just do what I recommend.”
- Fred Harteis E-227 Audio tape

My wife and I were “fortunate” enough to meet Fred Harteis at a recruitment meeting within a few weeks of being sponsored into Amway. He and his wife Linda lived not too far away from us in Harrisburg, PA. He was a charismatic, engaging speaker and had incredible rags to riches story in Amway. We were told that he had helped many become millionaires and had helped thousands of people add several thousand dollars a month to their net income. (See sidebar photo.)

We rose through the ranks quickly with a lot of hard work and tireless effort. Again and again we were assured we could attain any level of financial success if we were willing to do the work and humble enough to listen to Fred & Linda’s guidance as “they only benefited if we succeeded.” As a matter of fact, Fred would often “guarantee” the success of these he was showing the Amway business. His own words are the most accurate.

" Hey, ya mentioned when I was showin’ the plan, ya’d like ta have a farm of your own. Ya serious about that? Would ya really like ta have a farm? What’s it gonna be like? I’ll guarantee, you can have that farm in a few years, if you just do what I recommend. You can do it. Heck, I’ll tell ya somethin’. With me helping ya, you can’t lose. I’ll guarantee we’ll get it done together."
- Fred Harteis E-227 Audio tape

" Now, I wanta tell ya somethin’ else. I’ll personally guarantee ya any level a success you want, if you just do what I tell ya. And, here’s a seminar comin’ up. Ya need ta get there. Ya need ta get there. You just, you and your wife just have ta be there. We’re gonna be there. It’s gonna be a fantastic time. Alright. And, ah, it’s two in the afternoon til five in teachin’ how to build the business. And, I’m gonna get ‘em all excited about the seminar. Now, if I don’t go to the seminar, they’re not gonna go. For sure. I’ve cost ‘em the business."
- Fred Harteis E-227 Audio tape

These types of
guarantees were normally combined by Fred Harteis with some very specific income representations at recruitment meetings. Fred would often speak of helping many people become millionaires in Amway. Here it is in his own words, speaking to distributors and prospects at an recruitment meeting in a local hotel.

(In this case, he refers to helping
anyone in the room, in the next two years, add $50,000 to $100,000 a year to their income and the fact that he and several friends have helped over “2200 people become millionaires…”)

Click On MP3 Icon To Hear Fred Harteis Claim He Helped 2200 People Achieve Millionaire Status!

Fred often spoke of he and his wife helping thousands of people add several thousand a month to their income in “three to six months” time. Here he describes it:

Click On MP3 Icon To Hear Fred Harteis Claim He Helps People Add Thousands To Their Income!

Showing the plan is a term that refers to showing the Amway or Quixtar sales and marketing plan. It was critical that distributors become proficient at this as it is the key to building a large organization. Fred's seminars in which he gave specific instruction on what representations to make to prospects to induce participation. These seminars were later sold to the organization in the form of video or audio tape cassettes. Here, Fred instructs distributors to tell prospects they can earn $54,000 a year in addition to what they are doing for a job:

Click On MP3 Icon To Hear Fred Harteis Instruct Distributors To Unknowingly Make False Income Representations!

We believed these representations to be true and repeated many of them. We were later shocked to learn that every single representation above was/is fraudulent. Nearly 100% of all who participated in the Harteis “system” of success did so at a significant loss. The Amway and Quixtar businesses have been utilized by Harteis in a clever bait and switch scheme. As soon as distributors are recruited, they are “sold” on the necessity of buying books, tapes and seminar tickets from Harteis.

Here are the training materials from
BizNet Productions. First, distributors are trained to recruit others under false pretenses. Even though unknowing prospects are now being lured to a Quixtar recruitment meeting, they are deceived right from the start. Harteis “Initial Inviting” script advises distributors to tell prospects that the company is BizNet Productions. They are also advised they have the benefit of a “proven” system. Documentation reveals that this system has “proven” to do one thing, drain consumers pockets.

Click On PDF Icon To Download Fred Harteis Script Instructing To Deceive Prospects!

New distributors are advised that there is an eight step pattern of activity to follow. This pattern involves getting the new distributor to “invest” in his education to become successful building his own business.

Click On PDF Icon To Download New Distributor's 8-Step Pattern Of Activity!

The prices for the tools “recommended” in the Eight Step Pattern are priced here:

Click On PDF Icon To Download The Recommended Tools Price List!

The average active distributor involved in this system may “invest” $2700 a year in the system. Harteis has claimed to have tens of thousands of distributors in his organization at a time...you can do the math. On 2,000 distributors this can generate $5,000,000 or better:

Click On PDF Icon To Download TheHarteis/BizNet Tool Costs!

After I discovered the fraud, I was able to track down four former employees of Harteis. Each had a different angle on his secretive tool operation and cash business. One, who I tracked down to the mid west was afraid of him and left with a year’s financials as “protection”. These were extremely interesting as they revealed that of his multi-million dollar annual income, almost none came from Amway. A small fraction of his income comes from Amway with nearly all of it coming from books, tapes, seminars etc…

There is a secret room set up in his warehouse where blank tapes are duplicated at a cost of only .50¢ and sold in the thousands into the trusting group for $6.00, week after week, year after year. Distributors are constantly told that the tool business is often run at break even or a loss. This is completely false. It is the only viable business in that Harteis financials reveal he would show a large net loss if he only had his Amway income, despite claiming to have become a multimillionaire from Amway.

Anther former employee who provided an affidavit and was interviewed by the
FBI noted that she and her husband would sell tens of thousands of dollars of tapes and books for cash at weekend seminars. It appears from her statements and that of a long term former book keeper that very large sums of money may have never been reported as income or deposited in a bank. The Harteis’ former driver was tracked down in Alabama and he acknowledged helping load the briefcases of cash into the limo for delivery to the safes in Harteis’ home.

We had seen
Harteis firsthand with any where from $10,000-$25,000 in “flash cash” that he used at training session to get people excited about how much they could make in Amway. It appears this money came from another source entirely and may have never been declared for tax purposes. I was asked to meet with the Criminal Investigation Division of the IRS and provide Merchants of Deception as evidence/documentation in another state.

Click Here To Go To Part Two Of "Case Study/Fred Harteis."


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