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Pyramid Scheme Alert (PSA) provides current and historical news items that are of interest to our members and visitors. None of the reports or commentaries is intended to imply that any of the referenced companies have been charged or convicted as illegal pyramid schemes.

The Amway Myth
How Amway Spins the "Big Lie"

Analogy to the Days when Cigarettes Were Good for Us

Read the History of the FTC's Amway Pyramid Case

Former “Top Gun” Pyramid Recruiter of Amway Running Same Scheme At Monavie

Orrin Woodward, a former top level distributor at Amway/Quixtar made millions recruiting consumers into Amway, 99% of whom lost money. He told them if they bought his special “marketing tools” they could make money in Amway, and they could earn additional money by selling these tools to other recruits. The tools scheme was called “Team.”

99% of those who bought into the “Team” income scheme lost money. So, 99% of Woodward’s recruits never earned a profit in Amway/Quixtar. And of those who invested in his separate "Team" marketing business, 99% of them never earned profit from that scheme either, compounding their losses on top of their losses in the Amway scam.

Now, Woodward is running exactly the same scheme at the MLM scheme called Monavie. A recent Forbes magazine article details the scheme and documents that 99% of the consumers who are buying into Woodward's Team income plan never earn a profit.
Monavie does not disclose its payouts, as Amway does, so it is not known precisely how many of its recruits lose money. However, a recent study by Pyramid Scheme Alert show that 11 top MLMs all produced 99% loss rates among their recruits. The Monavie business model and pay plan are essentially identical to those schemes’ programs. One of the schemes which the report analyzes is Usana. The founder of Monavie helped found Usana and helped make up the compensation plan.

The report revealed that at Usana
-- The top 1% of all distributors (1.47) received 60% of the entire commission payout.
-- The top 3% of the total received over 70% of the total commission payout.
-- The mean average payment to the bottom 99% was $6.21 a week, before the costs are deducted for product purchases, taxes and all other business expenses!

Here is how the Forbes article describes the Team tools and the Monavie fruit juice scheme which it is affiliated with:

“It is a pyramid atop a pyramid. It is selling motivational aids to help Monavie vendors move the juice. But wait. If you can't earn back the $258 you've spent on the motivational lectures by selling $39 juice bottles, you could earn it back in another way--getting people to buy $258 motivational lectures. If you're good, you flog the lectures to other people, who sell them to yet others. Everybody gets rich. Everybody, that is, except the last round of buyers. That's the theory, anyway. The reality is that a mere 1% of Team members make any money from involvement with the firm.”

After running the recruitment and the “tools” schemes for more than six years at Amway/Quixtar, Woodward and Amway had disputes and ended the relationship. Woodward and other recruiters at his level then announced in a lawsuit that Amway, which they had all been working for, is actually an illegal fraud, a pyramid scheme.

The Woodward lawsuit is tantamount to a confession of having participated in a fraud for more than 6 years and generating more than $200 million illicitly for Amway. Since, by his own confession, it is not possible for a new recruit to earn a profit in Amway/Quixtar due to the fraudulent structure, his “tools” only increased the consumer losses.

Other MLMs such as Herbalife also allow tools scam to operate. In a previously settled class action lawsuit brought by consumers against Herbalife and its associated tools schemes, 2,700 former distributors filed claims with aggregate losses totaling approximately $19 million or an average loss of more than $7,000 per consumer.

In the lawsuit against Amway, Woodward and other ex-Amway recruiters confessed that they had recruited tens of thousands of consumers into Amway/Quixtar in which, they claim it is impossible for consumers to earn incomes because the products are “hopelessly overpriced.”

Woodward now hawks the same “tools” scheme to Monavie recruits who sell fruit juice. The juice retails for $39 a bottle plus shipping and taxes. Recruits can pay to become Monavie “distributors” in which they can earn money recruiting other “distributors." As Monavie distributors, consumers can buy the juice for about $30 a bottle plus taxes and shipping. To earn the promised profits as distributors, the consumers have to buy a quota of bottles each month, amounting to more than $150 a month. Some Monavie distributors have said the juice has powers to cure all kinds of ailments.

There are currently over five hundred offerings of Monavie juice available on eBay for much less than Monavie “distributors” pay “wholesale”. And most of the eBay sales offer free shipping.

Related News from Pyramid Scheme Alert:

-- The lawsuit brought against Amway by its former "top guns" and referenced in the Forbes article (above) describes Amway as an illegal pyramid scheme and reports that virtually none of Amway products are ever sold to retail customers; the products are grossly overpriced, and almost no distributors ever earn a profit. See

A class action lawsuit has was filed against Quixtar (Amway) by plaintiffs who are at the bottom of the Amway/Quixtar pyramid. These charges against Amway/Quixtar assert that there is no retail "direct selling" opportunity, only an endless chain recruitment program. The suit was brought by Boies, Schiller and Flexner.

-- Police officials in India raided offices of Amway in the largest state in the South of India. The police are charging that Amway is deceiving Indian citizens and causing large-scale financial losses by perpetrating a pyramid scheme.

-- China, the largest market in the world, has effectively shut Amway out of that country. The government of China allowed Amway to gain a licence but strictly prohibited Amway from using its pyramid recruitment pay plan. No Amway distributor can earn money from purchases of others in a downline. Without the false lure of the endless chain, Amway's sales will wither in China.

-- Amway founders and top guns have contributed millions to Republican congress members and to President Bush. This was rewarded in 2001 with Pres. Bush's appointment of Timothy Muris, an attorney that worked for Amway, as chairman of the FTC. Muris has since left the FTC and several key Amway protectors in Congress (e.g. Rich Santorum in PA and Tom Delay in TX) were defeated. Dick Devos, the son of Amway founder Richard Devos, ran for governor of Michigan but was defeated.

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This page last updated on 8/13/08