The long and sad story of the Canadian MLM scheme, Business in Motion (BIM), may finally be ending. The scheme has sent letters to its investors (salespeople), announcing it may be closing down. As in all such schemes, the actual percentage of losers (nearly all lose) was pre-determined from the start. The closing only lays bare the fraudulent structure and ends the falsely raised hopes of victims. The longer it operated, the greater the number of victims.
The collapse of BIM resembles that of another recent pyramid scheme tragedy in Canada in which hundreds of family farmers were ruined by a “business opportunity” fraud, called Pigeon King International.
As it did in the pigeon-breeding fraud, the government regulators of Canada allowed Business in Motion, a multi-level marketing company, to continue despite red flags of fraud, media alerts, whistle blower warnings, and a clear analysis of the scheme’s fraudulent design presented on national television.
Business in Motion had virtually no real customers. Its “salespeople” bought the “product,” a bogus and absurdly priced travel discount program. But, because the money was transferred through “product purchases”, rather than through the blatant payment of pyramid “fees”, the Canadian government treated it as a legitimate “sales” business. The fig leaf of “sales” was allowed to cover over pyramid recruitment, the true basis of the business. In fact, the only way to gain money in BIM is not from sales, but from recruiting more “salespeople” in an “endless chain.” The Canadian Competition Bureau has effectively enacted rules that supersede Canada’s well stated anti-fraud law, and thereby protects pyramid selling scams, such as Business in Motion.
Canada’s fraud law (shortened here for clarity):
CRIMINAL CODE OF CANADA
206. (1) Every one is guilty of an indictable offence and liable to imprisonment for a term not exceeding two years who
(e) conducts… any scheme… by which any person, on payment of any sum of money… shall become entitled under the scheme… to receive from the person conducting … the scheme… a larger sum of money … than the … amount paid … by reason of the fact that other persons have paid … money … under the scheme.
Many red flags of fraud were obvious for regulators, yet all were apparently ignored.
- A clone of the BIM scheme that was run by the cousin of BIM’s president was shut down in England as pyramid fraud.
- The BIM scheme was analyzed and exposed in one of Canada’s most popular news shows, Marketplace. Pyramid Scheme Alert President, Robert FitzPatrick, worked with the show’s producers to attend a BIM recruitment meeting with hidden microphones and cameras and then provided an on-air analysis of the trickery and the pyramid operation.
- Even more significant, a Canadian judge had ruled against the BIM scheme after it filed a defamation lawsuit against Canadian whistle-blower, Dave Thornton, publisher of the anti-fraud website, CrimeBustersNow.com. Thornton had publicly accused the scheme of pyramid fraud. The judge determined that Thornton’s accusation was not defamatory because the business model was “prima facie” evidence that the scheme was indeed fraudulent. BIM had filed the suit in an attempt to intimidate and silence critics. Instead, the court ruled in favor of the whistle-blower.
Despite the scheme’s connections to the fraud in England and the news media exposé and despite the scheme’s naked attempt to intimidate a consumer advocate, and in the face of the Canadian judge’s devastating ruling about the scheme’s evident fraudulence, Canadian regulators still took no action. Consequently, thousands more Canadian consumers were lured into the BIM trap.
One added tragedy to this sorry tale is that the scheme’s president, Allan Kippax, is soon to be sentenced – possibly to a jail term – for reckless driving, resulting in horrible injuries to other motorists. He was reportedly racing with this cousin, Peter Kippax, the one who had operated the same pyramid scam under a different name in England where government regulators shut it down. The cousin had just returned to Canada after the government put him out of the scam business there.
The unavoidable question is, would that tragic driving accident ever have happened if the Canadian scheme had been brought to justice?