| | What you may find most shocking in regards to the billions in fraud culled by the Amway & Quixtar motivational organizations is the fact that the Federal Trade Commission has been made aware of it during both the Clinton and Bush administrations. Myself, consumer advocates and Bruce Craig, the former US Assistant Attorney General of Wisconsin (who prosecuted Amway) have petitioned the FTC for a formal review. Here is the letter to the FTC submitted with my own testimonial during the previous administration to then Chairman Robert Pitofsky:
| | Click On PDF Icon To Download The Letter To The FTC Chairman Exposing The Amway Fraud! | In addition, I contacted the PA Attorney General’s Office as both a former Federal auditor and high level whistle blower. I offered to train their staff and gain them immediate access to the organization at my own time and expense. One of the most influential Amway Kingpin distributors runs his operation 10 miles from the PA Attorney General’s offices. The Pa Attorney General’s Office refused to take any action because the FBI was involved. Even though it appears these offices did not communicate with one another, jurisdictional politics seemed more important than protecting the citizens of the commonwealth of PA.
Senator Rick Santorum (R.–PA) came and spoke to thousands of cheering distributors at Hershey arena just prior to being elected. His support staff was literally jumping up and down back stage at the rousing applause he drew as a conservative speaker. I would later send a FedEx box of documentation to Rick Santorum advising that his credibility might have been used to unknowingly defraud his constituents. Included in the box was an 8*10 photo (see section "GOP For Sale" on this site) of he and his wife and my wife and I together.
I never heard from Mr. Santorum or his staff nor would they return calls. I had voted for him twice and could not understand this. Subsequent research into his donation records revealed countless donations from the perpetrators of this scheme, as detailed in Merchants of Deception. It is strange that his staff would lose a four pound FedEx box of documentation yet somehow be able to open every letter and endorse and cash donation after donation of funds that may have come directly from this fraud. Perhaps donations and critical correspondence from constituents go to different addresses?
Full, printed copies of Merchants of Deception, which is filled with supporting documentation, were sent to the following critical staff members at the FTC. They were sent with individual letters by a consumer advocate (by registered mail) to each of the following: Attorney James Davis • Attorney David Fix • Mr. Frank Gorman • Investigator Robert Ireland
Mr. Gary Ivens • Attorney Ira Kaye • Attorney James Kohm • Attorney Elaine Kolish
Attorney K. Michelle Roden • Attorney Mona Spivack • Attorney Steven Toporoff
Sr. Economist Peter Vandernat • Attorney Brad Winter • Attorney Robert Frisby
Not a single one of these individuals responded with as much as a form letter, even after receiving documentation that appears to expose perhaps the largest consumer fraud in history. I called Attorney James Kohm at the FTC at 1:25 PM on March 29, 2004. He was very polite and advised it is "in the hopper" but they “do not have the resources to go after it now but maybe in the future...” This clearly means absolutely nothing is happening. Again, I urge you to draw your own conclusion once you have read Merchants of Deception in its entirety, as the FTC appears too busy to do so.
The New York Attorney General’s Office, headed by Elliot Spitzer, has been a real pit bull in terms of consumer rights. They are, from a consumer protection perspective, perhaps the most tenacious and effective Attorney General’s Office in the nation. I made contact with the New York Attorney General’s Office by the way of a gentleman through Bureau Chief Thomas G. Conway. Mr. Conway works at both his offices in Albany New York and shuttles to the New York City offices.
I explained the fraud in detail in a letter and advised that I had multiple victims in New York who were willing to give their testimonials. In a telephone conversation on January 13, 2004, I told him I could arrange to deliver specific documentation of the fraud to him. To my shock, he advised they were “looking at it internally” and asked that I specifically not send him the documentation at this time. He knew I was both a high level whistleblower and a former Federal Auditor and had victims in New York who wanted to tell their stories. Has the New York Attorney General’s Office been neutered?
If you ran through the streets of Texas ten years ago saying Enron is a fraud perhaps you would have been thought a fool. If you ran through Mississippi seven years ago and said WorldCom is a fraud you would have been laughed at. If you went to Exeter, New Hampshire five years ago and said Tyco was a scam you would have been run from town. If you had gone to Coudersport, PA four years ago and voiced the opinion that Adelphia had billions in financial irregularities, you would not have been warmly received. Billion dollar frauds were perpetrated within these organizations and continued long past when they should have because they were so large people thought it not possible. There was a sense of credibility by magnitude.
Amway has used this same tactic globally when questioned or out right caught with their pants down with claims of fraud. This response just came from Amway in South Africa when they were accused of the exact, systematic fraud delineated in Merchants of Deception:
| | Click On PDF Icon To Download The Amway Response To Allegations Of Fraud! | This typifies the “we are big therefore we are legitimate” smokescreen that has worked to date for them. What Amway does not let out to the public is that they are fully aware that when audited, the top 1% of distributors had a net income of -$900. Can you imagine if McDonalds used promoters to sell franchises with tremendous income representations if they knew that “the top 1% of franchisees had a net income of -$900”? They would be shut down tomorrow. The FTC wouldn’t permit this for another day.
“The Truth will set you free….”
- Amway Double Diamond Fred Harteis
This will not take some huge allocation of resources to document the truth. If the FBI and/or FTC want to find the truth in short order, they could within seven days. All they have to do is subpoena the tax returns of the reported income of all of the Diamonds on the IBOAI and they will find out what Amway has known for decades… almost none of their lifestyle or income utilized to recruit the masses comes from Amway or Quixtar. The tax returns will actually show that without the secretive tool incomes, most would probably lose money on their businesses even though they are touted as being at the pinnacle of success. They are not hard to find, they are all listed at
If they randomly select 1,000 who were recruited into the business twelve months ago, they will be hard pressed to find more than a handful with a net income over a dollar. What they will find is almost 1,000 people who have dumped millions into Amway products, books, tapes and seminars.
Better yet, just get the tax returns of the Diamonds on the “Legal and Ethics” committee as they must certainly be the most representative of solid business ethics. Give them the benefit of a doubt. They are all listed by name at
Despite the overwhelming failure of the above listed Federal and State agencies (to date) to protect the consumer, there are two organizations that are doing their jobs well. They should be commended for doing so. The FBI has received, for years, countless listings of recruitment meetings and seminars. They have a large cache of tapes, videos and paper documentation detailing the fraud. Both the FBI and Criminal Investigation Division of the IRS have interviewed and taken documentation from multiple former distributors and former employees of more than one Amway Diamond. Although, they appropriately, could tell me no more, both my contact agent at the FBI and U.S. Assistant Attorney Wayne Samuelson recently confirmed an ongoing investigation.
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