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"We're Looking For Five Exceptional Leaders..."

Aboard a plane heading for Kansas City, the attractive young woman sitting next to me turned to the person behind and asked, "I noticed you reading the classifieds earlier. Are you looking for work?"

"Yes, I am," said the occupant, a woman in her early twenties who seemed surprised but pleased that someone had taken an interest in her. "Actually, I've been looking for a job for quite some time. Why do you ask?"

"Well, I'm sort of in human resources for my company and we're looking for people right now."

"Really? What kind of a company is it?"

"Well, we represent over 200 environmentally friendly products."

"Really? That's terrific. I really believe in products that protect the environment."

"We're growing really fast now and expanding."

"That's great!"

"Would you like to talk about it when we get to Kansas City?"

"Well, sure, but I'm looking for work in Maine. That's where I live."

"Actually, we have an office in Maine. What's your schedule like tonight or tomorrow?"

"I'm busy all day tomorrow."

"Okay, let's get together this evening. It'll be fun."

"Great."

"Believe me, this is the opportunity of a lifetime. I can't wait to tell you all about it."

An elderly woman next to the job seeker commented, "It sounds like you've hit the lottery."

"Yeah, what luck!"

Yes, you might think so. Yet, without asking, I instinctively knew that this 'human resources' recruiter was not a human resources professional at all. She was not authorized to offer a 'job' of any kind to anyone. In fact, she did not even have a job herself.

She was an independent distributor plying her wares and looking for sub-distributors. Far from offering a job, she was seeking a financial investment from the young woman behind her. She was one of the modern day equivalents of the itinerant agent who sold stock certificates in promising - or more often bogus - companies to the naive, the gullible and the greedy on the Herman Melville, Mark Twain-style Mississippi steamboats.

This enthusiastic and helpful traveler was yet another recruiter of a multi-level or network marketing company (MLM) in which - through a pyramid-like commission structure - each distributor has the opportunity to gain override payments on sales of as many as six levels of sales reps below. Success in this business involves a ceaseless and boundless search for downliners on the commission feeding chain below, a practice which leads to the necessity for these types of open and constant business solicitations. The fellow traveler who was the target of her initiatives was, surprisingly, one of few people who had never before encountered an MLM or pyramid scheme. Her innocent and unguarded questions showed that she was not alert to this type of proposition.

This was to be her induction, her rite of passage into a whole new business genre. We can only imagine her reaction to later finding out from the recruiter that the initial 'job' offer she was so excited about would actually turn into a solicitation to invest. The distributor, like her many counterparts, would, undoubtedly, have wrapped such a clarification in a penetrating, highly seductive presentation of her company and its superior product. Such MLM pitches frequently include the tantalizingly presented potential for a $50,000 monthly income along with promises of personal freedom and independence, effortless lifetime annuities and early retirement, all within easy reach especially for those who have vision, talent and a love for people. And, it may well have worked on that un-informed, unemployed young woman from Maine as it has on countless millions of others. The story goes on.

On that occasion, I pretended not to hear. I feigned sleep as we awaited take-off. I avoided eye contact though I felt my traveling companion's hyperactive presence. Ultimately, conversation was unavoidable for I was proofreading this very manuscript. My papers provided her with an opening foray. After all, she was on a roll. One appointment was already made. She was undoubtedly thinking that this could be the day on which she would hit the jackpot with that one downliner who would set the world on fire resulting in her accruing benefits for the balance of her born days.

"Pyramid schemes and MLMs," I replied quietly when she inquired about the subject of my manuscript.

Thus began another close encounter with a true believer, an MLM proselyte. Once again I faced the challenge of speaking constructively about what I have studied, learned and concluded about this type of business. And, once again, I saw that information turned away because it disturbed the old get-rich-quick notion that has entrenched itself in the American mind.

After getting the gist of my theme, this enthusiastic recruiter suddenly found herself struggling for civility, all the while bristling with underlying defensiveness. I had attacked the bastion of her faith, the seat of her dream, her very path to success. And I was treading on America's most treasured, even sacrosanct doctrine - the right of each American to unlimited personal opportunity and the chance to become wealthy 'beyond one's wildest imaginings.'

So what if 99.9% fail at MLM, she countered. Certainly it was because they had not really tried. People fail at all kinds of businesses. In fact, most small businesses fail, she continued. Failure in MLM is clearly and only the responsibility of people who don't apply themselves.

Oh, she knew about MLM fraud and misleading promotions and recruitment. She volunteered knowledge of the 1990 Fund America, Inc. fiasco that swindled thousands of distributors across the country out of millions. She had even lost $3,000 in that mess herself. She knew that the government had closed down Fund America as an illegal pyramid scheme resulting in the arrest of the president of the company - who later fled the country with millions in company funds - and the subsequent discovery that he was wanted for fraud in England.

Our believer had also been an Amway rep. She had paid for training and motivational tapes that were essentially about recruitment and manipulation, just another way to get money from the inexperienced and naive. And she knew all about the disreputable recruitment tactics of so many other MLMs. But this one was different, she insisted. After all, she was already a director - as if her current success was certain proof of this company's validity.

She went on. Yes, the founder of her company had been an executive in one of those misleading MLMs but he had seen the abuses and he had corrected them in his new company. Pointedly, I asked just how many people were needed in an individual distributor's downline to provide a sustainable monthly income. She said maybe a couple of hundred if all of them were consistent producers.

Then I asked how many in her company presently had sustainable living incomes of $4,000 a month. Some were making over $50,000 a month, she replied tartly. Avoiding this obvious diversion, I pressed for the number of only those with middle class incomes of $4,000 a monthly.

Thousands, she said.

I noted that this would already indicate a collective downline of over a half million people in the U.S. in her company alone. Was that possible?

She pondered the figures briefly and, without the slightest loss of composure, said that she did not know the real number nor did she care to know. There was always opportunity and MLMs had barely begun to scratch the potential of the U.S. market. Anyone could make it if they just worked hard.

Now I couldn't resist going a little farther. Even at the risk of sounding like a small town Methodist cleric warning against the evils of money and city life, I mentioned the commercialization of personal relationships, the manipulation of friendships and the blatant misuse of family trust each of which so characterize the MLM industry.

Everything is commercial, she snapped, as if I had been asleep for the last 100 years. We are all always selling. That's life today, she huffed.

As for traditional jobs, vocations and professions, well, corporations only use people, she said. She herself had once worked for a company and calculated that it had only paid her 1% of what she had actually made for them. Those kinds of companies just suck your blood and then fire you when you hit 50, she declared.

Thus having regained the adrenaline rush she had experienced after securing a appointment with the job hopeful behind us, she told me that I was simply resisting the wave of the future. Really. Just look at MCI, the long distance phone carrier, which is going MLM. It's everywhere, she said. She was telling me?!

But, on she went. In MLM, you can make a fortune with virtually no up-front investment. Right. It's providing opportunity to millions of people who are being thrown out of corporate America. Hmm. It will, in fact, provide security when Social Security goes bankrupt. And, it will go bankrupt, she finished triumphantly! Well, who could argue that point?

And, as for regulation, well, the government should just stay out of MLM, she said. It was really the government that destroyed Fund America, Inc. and caused her to lose $3,000. If do-good government regulators had not gotten into it, Fund America would still be going and she would probably be good and rich by now. They had caused thousands to lose their money when they intervened, she railed as she gained momentum. She would rather see people take their own chances than lose their money for sure when the government closes down a company.

Somewhat caught up now, I noted that the government finds itself forced to intervene because pyramid schemes are structured to inevitably fail. They take money from those at the bottom and feed it to those at the top. I pointed out that the initial success of such businesses is an illusion. That eventually the base grows too large and is not sustainable. And that's why they are illegal. That's what the fraud is all about.

At this point, my passion began to dwindle as I was regretting my part in this discussion. As soon as the word fraud had slipped from my mouth, I realized that any further attempt at communication had collapsed if, indeed, it had ever had a chance.

Further, it was clear that our now totally defensive distributor had cast me in the role of a representative of that Fifth Column of negativity, government control, skepticism, cynicism and collectivism that she, in short, described as completely un-American. Thus, as the plane began its descent into Kansas City, she delivered her coup de grâce.

"I can live with risk, even failure," she said haughtily. "But, what I can't stand are dream busters, cynics who want nothing more than to kill other people's dreams." Her company, she said, offered the chance for the American dream to come true. I, on the other hand, simply offered nothing positive. Her last words.

The plane mercifully landed as I wondered if the young woman behind us had heard any of our discussion and if the appointment would be kept. Alas, the bogus human resources professional and the accused dream buster didn't bother to exchange business cards. We didn't even say good-bye.

Aftermath

Along with countless others that are taking place as this story is being read, this encounter demonstrates that the ubiquitous proponents of MLM are not easily evaded, ignored or rebutted. This new form of selling relies not on product or cash to build its portfolio but on human resources. Growth of the MLM must proceed not incrementally or one by one in the traditional business model but rather exponentially. One hundred are required to support one and ten thousand more to support the one hundred. Solicitations must always expand and accelerate. Momentum is the engine. Therefore, even flying high in the stratosphere, recruits must be found. It's the only way the MLM story can go on.

With mesmerizing promises of extraordinary and easily attainable wealth, assurances of personal freedom and happiness, MLM and pyramids are touted as answers to fearsome warnings of economic insecurity or even global chaos. Regularly offered are the irrefutable reminders that the only tools needed to build a successful downline, sales or participation team are as near as all of one's friends and relatives. Certainly, to avoid the fate of running afoul of an MLM or an illegal pyramid in America today seems nearly impossible.

While the paid media may bombard our subconscious, their seductions and influences are offered via print and electronics which we are free to avoid or turn off. MLM and illegal pyramids use no advertising nor have they any need for it. They simply walk in the front door in the guise of a friend, lover or brother-in-law. To withstand such individualized and intense enrollment efforts requires a strong sense of personal security.

At the very least, a savvy insight into the actual odds of success and a set of definitive questions are needed in order to make a free and intelligent choice. Faced with solicitations from friends or relatives, a level of fortitude and social skills is required that would test the limits of any personal relationships, especially those which are traditionally safe havens from commercial trade. In this context, it is no wonder that MLM evokes such powerful responses from blind allegiance to bitter contempt.

Burning with zeal, millions have joined the movement. A nearly equal number fail early and abandon the program. Their ranks, however, are quickly replenished by new draftees. For reasons that will be closely examined later in this book, almost no one who has been through the process can provide a coherent explanation of the experience other than to offer a painful admission of their own apparent insufficiency.

With vast numbers of people failing at enterprises convincingly portrayed as easily-mastered while offering enormous financial potential, it should not be surprising that a psychic pall of disillusionment and disappointment has fallen over millions of past participants. Far from a program that is unleashing human potential and fulfilling dreams as the aforementioned traveling companion claimed, if we look, we will see a voracious organism that churns and manipulates believers of the American Dream. It leaves in its wake a trail of cynicism and disempowerment, no small wonder as recruits observe billions of dollars landing in the laps of tiny, elite groups at the top.

Our proselytizing travel companion prompted the recurring questions about the true income potential from MLM enterprises, the limits of their mathematical expansion and the legalities of and differences between MLM and pyramids. Where does the truth lie in these all too frequent and unavoidable solicitations? Certainly not in misleading sales openers like the one offered by our ersatz human resource recruiter. Definitely not in her exaggerated numbers about income potential or the success levels of MLMers. And, not in her revisionist history of the Fund America fraud. Yet, neither was there validity in the countering call for government regulation or the high-minded detachment from MLM's promise of wealth and happiness.

Eventually, clarification came with the realization that the mundane matters of pyramid structures, the promotional rhetoric and success levels of participants are insignificant sidelines to the main issue. MLM and the associated phenomenon of pyramid schemes are worth investigation and understanding because of the powerful spiritual and social messages they are espousing and for what their growth and expansion in America reveal about our lives.

What we need to focus on is the fact that the increasing influence of multi-level marketing is not based upon what is actually delivered to people in income or on the products that are sold in the marketplace. Indeed, the appalling failure rate of participants in MLM and the illogic and illegality of pyramid schemes would cause any reasonable person to wonder why anyone would enroll in such improbable ventures.

Be it pyramid scheme or MLM, the question is why are so many Americans drawn to these enterprises? In answer, greed, deception, economic insecurity, loss of community and pervasive commercialism in our culture all play their parts. These are the conventional explanations cited in newspaper reports when the illegal pyramid is prosecuted by local police or the investigative journalist documents once again that virtually no one makes a sustainable income in the MLM system.

However, a closer investigation reveals a more powerful force that is leading millions into the fraud and folly. With anecdote, testimony, research and logic, we will trace the motives for this mass phenomenon to a source that cannot be easily or glibly dismissed. The clear but, perhaps, discomforting answer to this question is that Amway, Nu Skin, NSA, Herbalife and the hundreds of other merchants of network marketing have converted so many of us into their itinerant sales reps because they appeal to treasured tenets of our faith.

Aimed right at the spiritual, community-minded nature of man, these companies are tapping into some of our most deeply held but least understood beliefs - beliefs that are so basic to American life that anyone who questions them is scorned as a heretic or as unpatriotic.

False Profits is a true story about some who lost faith in the prophets, profits and promises of pyramid schemes and multi-level marketing but gained profound knowledge of themselves. It is the honest recounting of extraordinary highs and antithetical lows - the excitement, the anticipation of success, the pain, the humiliation, the confusion, the self-challenge - that resulted from questing for financial and spiritual deliverance in the world of pyramid schemes and MLM.

In this retelling, there is a good deal of information about what some call today's most promising industry - MLM - and substantial evidence that can lead to the understanding of the term 'false profits as it is applied to this industry. It will also become apparent that, in order to understand the beguiling appeal, the offered values and the allegedly spiritual messages of the MLM industry and pyramid schemes, we must look inward. After all, no one was ever forced to join an MLM organization or to enroll in a pyramid scheme.

Far from an exposé of an alien or negative force in our midst, False Profits offers an introspective examination of our own needs and beliefs. In the plot of this story, fraud and faith, myth and mysticism are seen to be closely linked as the specter of failure looks on.

The objective herein is not to save anyone from failing. It is, rather, to offer full disclosure about this system, the type of which would be given to any prospective investor as a precursor to participation in a franchise or security. The aim is to encourage people to look beyond government regulation of MLM in order to understand this industry's economic realities.

Neither a dream buster, False Profits invites you to determine, examine or reaffirm your highest ideals for a life that is worth living as it points out the profound distinctions between an existence founded upon material success as portrayed in the MLM solicitation and one that is dedicated to communal and spiritual vision. As part of this rocky but worthwhile and upward climb towards greater spirituality, we herein have the opportunity to share the renewed possibility of finding our authentic selves through a deeper, more satisfying and untainted spirituality.

Finally, False Profits serves to underscore the truth about our dreams, that they are woven out of our unique and infinitely complex gene structures and definitive personal experiences. In the writing, we have come to the sure knowledge that dreams are not about having but about living. And, most importantly, that dreams which are mass marketed - rather than privately nurtured in the soul - soon evaporate. True dreams are lived and expressed every day because they are the materializations of spiritual expression, the representations of our very beings. As it has served the authors so well in the writing, we offer the following content in the hope that it will provide the same useful purpose for others in the reading.