The title pretty much sums it up.

Monday, December 20, 2004

WOW!!! HOLY SHEEEATTT!!!! Recruiting is by far the hardest job I have ever done in my life. I have been doing it for about 4 months now and I am ready to "return to force", thats what we call it when you go back to your old job. I do love talking to people and telling them about the Air Force, and I really want to help people too. Military service can help people achieve great things in their lifetime, it can help people that are going nowhere in life. Thats one reason I decided to be a recruiter, I dont feel like I have made that kind of difference yet, and it bothers me. Things will get better, thats what everyone keeps telling me, "just keep doing what you are doing and things will turn around". And I actually believe it too, business actually has started to pick up lately. It's been a lonnnnngggg time since I've posted, so long in fact that I bet nobody is going to read this post!!! Anyways, one reason I decided to get back on my blog is that QuixtarBlog, one of my favorite websites, appears to have come under attack from a hacker, peice o' shit coward. Assholes like this hacker deserve a good old crack right in the fucking jaw. I have zero tolerance for ignorance. Now, I am left wondering if this is a "lone gunman", or a conspiracy theory? Probably the latter, I think a few of the A/Q kingpins are dirtbags and probably had a hand in this. Pathetic, truely pathetic. Hopefully I will be back soon, well, at least sooner than the last time I posted.

Thursday, May 20, 2004

Well, this is going to be my last blog entry for a few months. I am now back into the active duty Air Force and I leave this morning for San Antonio, Texas(I've got some training to do). Well, take it easy everyone, and if I have time I'll try and update my blog down at wonderful(minor sarcasm intended) Lackland AFB.

Thursday, May 13, 2004

Well, this post was suppose to be about the mods that I want to do to my sled. Well I have a couple things more important to talk about. Nick Berg. I have seen the video of his death, and it was disturbing to say the least. I'm glad I watched it, but I kind of wish that I hadn't. I wont go into detail out of respect for Mr. Berg, and my heart goes out to his family. It's something that will be with me forever, it was a very brutal way to die. Overall, for me it reaffirms what needs to be accomplished, these people need to die. I don't believe the terrorists BS about this being revenge for how the Iraqi POW's were treated, they just want to see dead Americans, and were going to kill him regardless. It sickens me how these people hide amongst women and children and then point fingers at us when non-combatants get killed, their ignorance and arrogance is overwhelming. Meanwhile we wear uniforms that readily distinguish us from anyone else on the battlefield, yet they don't have the courage to face us. I believe that things will get worse, these radicals are facing extinction and are getting desperate. But, one way or another I firmly believe they will be caught or killed. On the flip side, WTF was this contractor doing over in Iraq in the first place? It's my understanding that he went over there in search of a job, and when he couldn't secure one, he tried leaving the country and was detained, that's when his troubles began. I'm sure that he meant well, and just wanted to help the country rebuild(or whatever), but I hope this alerts other contractors as to the dangers involved with going to a country like Iraq. I still have a hard time understanding why someone would think going to Iraq in search of a job is a good idea. These terrorists do not care about combatants or non-combatants, they only see westerners, and want us want us all dead. Rest in peace Nick Berg, you will not be forgotten.
Lately it seems as if I have been getting in a lot of arguments on the internet, it has become very tiresome. First the whole Quixtar thing is all about confrontation, sometimes even amongst the cons(people against Quixtar). Then I have gotten into it with three separate people on two different snowmobile forums(both links located to the right). First, it was about quality and efficiency of belt drives on snowmobiles, then about the American Reservists that tortured the Iraqi POW's, then it was about the weight and performance capabilities of rotary(wankel) engines compared to 4 stroke engines. Big arguments, almost all of them turning into personal attacks, which is really stupid. But I guess that's the nature of the internet, even though we make the internet what it is. Screw it, I don't even care, I just wish I wasn't sooooo argumentative. Well, I'm sick of blogging for now, I think I'll go start an argument on the internet. That reminds me of a T-shirt I saw once. It said "arguing on the internet is sort of like being in the Special Olympics, even if you win, you are still retarded". Not very PC, but oh well, its good for a chuckle.

Friday, May 07, 2004

Well, it has been a long time since I updated my blog, and for good reason. Quixtar/Alticor/Amway was trying to remove from the internet the document that I posted in my last entry(The Blakey Report), they were even threatening legal action agaist a few other bloggers that had posted the report. Whatever, fuck Quixtar/Amway/Alticor, I think their days are numbered. I thought I would be a "rebel" and leave it up for a while, I wanted anyone that visted my blog to see that document. Well, tonight was an exciting night in the fight against Quixtar. Dateline NBC did an expose' about this scam, if you would like to hear about it and read some reactions to the show, click the link on my blog titled, QuixtarBlog. It was a pretty good show and will hopefully be a springboard for action against this company. Yaaaahhhooooooooo Dateline!!! Well, I think I will go back to posting regularly, I think Quixtar has probably given up on trying to remove the Blakey Report from the internet, they will be too tied up with damage control from here on out. So much has happened since my last post, my beloved Red Wings were eliminated from the playoffs, I've been to a Tigers game(Comerica Park is gorgeous), I've been to a Pistons game, in less than a week I will be back into the active duty Air Force, I dont think I will let things build up like this again. Well, going back to the main topic of my blog, snowmobiles, I have been thinking a lot lately about the choice I made when I preseason ordered a Polaris 600 Switchback. I am starting to regret it for some odd reason. I never thought that the current crop of 4 stroke sleds would appeal to me but, the Yamaha Rage has my full attention right now. I know the Switchback would more than likely smoke it, stock for stock. But, and there is always a but, take that Rage, put it on a diet, slap a turbo on it, and you got yourself a fucking 200HP rocketship!!! My next sled is probably going to be a four stroke, I really think Yamaha is doing a wonderful job with their product offerings, they are certainly smoking everyone else in the 4 stroke performance category, so badly in fact, that it will take the other OEM's a long time to catch up. Well, since I have a non-refundable security deposit on my Switchback, I guess I'm just going to have to live with it. The Switchback is still a badass sled, especially after I get done with all of the mods that I have planned for it, which is going to be the topic of my next post. Until then, take it easy everyone, and STICK IT IN YOUR ASS QUIXTAR!!!!!!!!

Sunday, April 18, 2004

Hello everyone, I have been active on a forum called Quixtar Blog, heres the address http://www.webraw.com/quixtar/forum/index.php, for a couple of months now. For those of you that do not know what Quixtar is, here is a link to a brief explanation. http://www.apollowebworks.com/amway/quixtar.htm What it boils down to is a pyramid scam, its Amway reborn on the internet, the same people doing almost the exact same scam that they have for the last 40 years. Lots of people loosing money in search of a dream that is virtually unattainable. I have got a big problem with the Quixtar corporation, but I think their days are numbered too. People are getting smarter at a younger age, and are able to see through the hype. Quixtar is quickly gaining the reputation that they had when they were called Amway. Its only going to get harder and harder for Quixtar to recruit new members, and eventually the pyramid will collapse. More and more people are willing to speak out against this corporation despite Quixtars efforts to muffle these voices. There is a little piece literature that I would like to share with you guys. Its called the Blakey report, and what it basically outlines are the parallels between the organizational structure of the Amway/Quixtar corporation and Organized Crime. Its a very long read, but its very informative and the parallels are uncanny. For any of you seeking more information about the Quixtar corporation, this website is an excellent resource, http://www.amquix.info/. Well, here it is, a report by G. Robert Blakey.

REPORT OF G. ROBERT BLAKEY original in .pdf
Table of Contents
I. Introduction
II. Opinion
A. Basis of Opinion
B. Organized Crime
C. The Amway Business
1. Family Structure
2. Association-in Fact
3. Legal and Illegal Act
4. Corporate Structure
5. Dispute Resolution.
6. Control
III. Supporting Exhibits
IV. Material Reviewed
V. Compensation

I. Introduction
I have been retained by counsel for Plaintiffs in the case styled The Procter & Gamble Company, et al. v. Amway Corporation, et al, Case No. H-9723 84 (S. D. Texas, Houston Division), for the purpose of rendering an expert opinion. My area of expertise includes the structure and function of organized crime groups. I have reviewed 9 documents that form the basis for a comparison between the structure and function of organized crime, and the structure and function of the Amway enterprise. My opinions are set forth with a reasonable degree of certainty, based upon my education, training, background and review of relevant materials.
Three preliminary points relate to this report. First, I am not being asked to render an opinion as to whether Defendants' conduct is, in fact, a violation of the federal RICO statute. This will be for the jury to decide after instructions by the court. I have testified in the past as an expert on organized crime in a variety of contexts; it is in that capacity that I will render my opinion in this case. Second, while my opinion arises from Plaintiffs' allegations relating to various improper conduct by Defendants, the primary focus is on the structure and function of the Amway business. Third, this Report may have to be supplemented as Defendants produce additional discovery. As later shown, I have reviewed already a fair number of documents, many obtained by Plaintiffs' counsel outside of formal discovery. I understand, however, that a large number of documents are to be produced for review, and a number of witnesses have not yet been produced for deposition.

II. Opinion
It is my opinion that the Amway business is run in a manner that is parallel to that of major organized crime groups, in particular the Mafia. The structure and function of major organized crime groups, generally consisting of associated enterprises engaging in patterns of legal and illegal activity, was the prototype forming the basis for federal and state racketeering legislation that I have been involved in drafting. The same structure and function, with associated enterprises engaging in patterns of legal and illegal activity, is found in the Amway business.

III. Basis of Opinion
To understand the basis for my opinion, it is first helpful to examine the structure and function of major organized crime groups. This may then be compared with the structure and function of the Amway business. The obvious parallels emerge.

A. Organized Crime
An especially troubling problem with the phrase "organized crime" is that it is used in different contexts with different meanings. Sometimes, too, these different meanings are not always clearly separated. These different uses can, of course, lead to problems both in communication and in the law.
Like Humpty Dumpty's language, C. Dodgson ("Lewis Carroll"), through the Looking Glass and What Alice Found There, Chapter 6, at 247 (Modem Library ed.): ("When I use a word," Humpty Dumpty said, "it means just what I choose it to mean neither more nor less,") the phrase "organized crime" can mean whatever the speaker chooses to make it mean, and it has meant many things to many people. It can be use4, for example, to refer to the crimes committed by organized criminal groups-gambling, narcotics, loan sharking, theft and fencing, and the like. See generally President's Commission on Crime and Administration of Justice, Task Force Report.- Organized Crime 2-4 (1967). It can also be used to refer, not to the crimes committed, but to the criminal groups that commit them. Id.
Here, a difference of opinion sometimes exists. How sophisticated should a criminal group become before it is called "organized crime"? Should "white collar" criminal groups be called "organized crime"? On the definition of "white collar" crime as generally not including "organized crime," compare E. Sutherland, WHITE COLLAR CRIME.,- 9 (Dryden Press Inc. 1949,@ with H. Edelherlz, THE NATURE, IMPACT AND PROSECUTION OF WHITE-COLLAR CRIME, 3 (U.S. Department of Justice, National Institute of Law Enforcement and Criminal Justice, 1970). THE REPORT OF THE NATIONAL CONFERENCE ON ORGANIZED CRIME, (Washington, D.C. October 1-4, 1975), however, broadly defines organized crime to be "any group of individuals whose primary activity involves violating criminal laws to seek illegal profits and power by engaging in racketeering activities and, when appropriate, engaging in intricate financial manipulations." Id. at v. Should "subversive groups" be called "organized crime"? See IIT Research Institute and Chicago Crime Commission, A Study of Organized Crime in Illinois 20 (Summary) (I 97 1) ('independent social process, separate from" organized crime).
Typically, "white collar" or "subversive groups" or ad hoc groups, such as youth groups, pickpocket rings, and professional criminal groups put together for one or more scores" are excluded from definitions of "organized crime." The President's Commission on Crime and Administration of Justice in 1967 suggested, for example, that organized crime" should be limited to groups that have become sufficiently sophisticated that they must regularly employ techniques of both violence and corruption to achieve their criminal ends. Task Force Report at 8 ("unique form of criminal activity"). Others disagree, and the literature does not reflect- a consensus. Compare Schelling, "What is the Business of Organized Crime?," 20 J. PUB. LAW 71 (1971) (concept keyed to "monopoly").
Among those groups that have some plausible claim to the dubious title of organized crime," additional distinctions can be helpfully drawn; it is useful, for example, to distinguish between "enterprises...... syndicates," and "ventures." Some, too, would probably not apply the label of "organized crime" to each of these groups; they would, for example, restrict it to "syndicates."
An organized crime "enterprise" is a criminal group that provides licit or illicit goods or services on a regular basis. See, e.g., Schelling, "Economic Analysis and Organized Crime," Task Force Report at 115; Rubin, "The Economic Theory of the Criminal Firm," The Economics of Crime and Punishment 155 (1973). An example would be a narcotics wholesaler and his cutting crew. See U.S.C.A. ยง 848 (1972), "Continuing criminal enterprises." See, e.g., United States v. Manftedi, 488 F.2d 588 (2d Cir. 1973), cert. denied, 417 U.S. 936 (1974). Thus, it is a criminal firm or business organization. See Schelling, "Economic Analysis and Organized Crime," Task Force Report at II 5.
An organized crime "syndicate" is a criminal or related group that regulates relations between various "enterprises." It may be metropolitan, regional, national, or international in scope. It may be concerned with only one field of endeavor or it may be concerned with a broad range of licit or illicit activities. A "syndicate," therefore, is a cartel or business organization. It fixes prices for goods and services, allocates markets and territories, acts as a legislature and court, sets policy, settles disputes, levies "taxes," and offers protection from both rival groups and legal prosecution. See Task Force Report at 6-10.
A "venture" is a criminal episode usually engaged in for profit by a group. It may be the hijacking of a truck. See, e.g., United States v. Persico, 339 F. Supp. 1077 (E,.D. N.Y.), aff'd 467 F.2d 485 (2d Cir. 1972), cert. denied, 410 U.S. 946 (1973) (trial of Carmine J. Persico, Jr., a member of the Vito Genovese syndicate, S. Rep. No. 72, 89th Cong., 1st Sess. 20 (1965) for hijacking). Or the robbery of a bank. See, e.g., United States v. Franzese, 392 F.2d 954 (2d Cir.), vacated in part as to Franzese only and remanded, otherwise cert. denied, 394 U.S. 310 (1968), related case, 525 F.2d 27 (2d Cir. 1975) (trial of John Franzese, a caporegime of the Profaci syndicate, S. Rep. No. 72, 89hCong., 1st Sess. 28 (1965) for bank robbery). On the background of the robberies and a related homicide trial, see generally J. Mills, The Prosecutor 96-245 (Farra, Straus and Giroux, 1969). It is "organized crime" when members of the "venture" have ties to a "syndicate." This tie gives the "venture" access to superior criminal resources, including capital, skilled labor, outlets for stolen property, etc.
Finally, "organized crime" may refer to the entire criminal underworld, or at least that part which has some semblance of organization. See Task Force report at 7; Schelling, supra note I 0, at 115. Thus, "organized crime" is distinguished from random acts of violence, passion, or greed.
In 1951 the Kefauver Committee declared that a nationwide crime syndicate known as the Mafia operated in many large cities and that the leaders of the Mafia usually controlled the most lucrative rackets in their cities. Kefauver Comm., 3d Interim Rep. 5 Rep. No. 307, 82d Cong., 1st Sess. 150 (1951). In 1957, 20 of organized crime's top leaders were convicted (later reversed on appeal - United States v. Bufalino, 285 F.2d 408 (2d Cir. 1960)), of a criminal charge arising from a meeting at Apalachin, N.Y. At the sentencing the judge stated that they had sought to corrupt and infiltrate the political mainstreams of the country, that they had led double lives of crime and respectability, and that their probation reports read "like a tale of horrors."
Today, that group is the most significant national group in organized crime in the United States. It consists of 24 groups, known as the "Mafia" or "LaCosa Nostra," operating as criminal cartels in large cities across the Nation. Task Force Report at 7. The description of it presented here relies heavily on the Task Force Report. See also PRESIDENTS COM'N ON ORGANIZED CRIME, THE IHVACT: ORGANIZED CRIME TODAY 35-38 (I 986): Blakey, "Federal Criminal Law," 46 HASNNG L.J. II 75, 1193-98 (1995) (citing various sources).
The membership of these groups is of exclusively men of Italian descent; they are in frequent communication with each other, and their smooth functioning is insured by a national body of overseers. In individual cities, the local core group may also be known as the "outfit," the "syndicate," or the "mob." See Testimony of former New York City Police Comm'r Michael J. Murphy, McClellan, Narcotics Hearings, 88th Cong., Ist Sess., Pt. 1, at 63 (1963); testimony of Capt. William Duffy, id. pt. 2, at 506; OFFICE OF THE N.Y. COUNSEL THE GOVERNOR, COMBATING ORGANIZED CRIME -A PEPORT OF THE 1965 OYSTER BAY, NEW YORK, CONFERENCES ON COMBATING ORGANIZED CRIME(1966). These 24 groups work with and control other racket groups, whose leaders are of various ethnic derivations. In addition, the thousands of employees who perform the street-level functions of organized crime's gambling, usury, and other legal and illegal activities represent a cross section of the Nation's population groups.
The present confederation of organized crime groups arose after Prohibition, during which Italian, German, Irish and Jewish groups had competed with one another in racket operations. The Italian groups were successful in switching their enterprises from prostitution and bootlegging to gambling, extortion, and other illicit and licit activities. They consolidated their power through murder and violence. See generally, ORGANIZED CRIME IN AMERICA 147-224 (Tyler ed. 1962).
Members of the 24 core groups reside and are active in a number of states. The scope and effect of their criminal operations and penetration of legitimate businesses vary from area to area. The wealthiest and most influential core groups operate in New York, New Jersey, Illinois, Florida, Louisiana, Nevada, Michigan and Rhode Island.
Recognition of the common ethnic tie of the 5,000 or more members of organized crime's core groups is essential to understanding the structure of these groups today. Some are concerned, however, that the identification of Cosa Nostra's ethnic character reflects unfairly on Italian-Americans generally. This false implication was eloquently refuted by one of the Nation's outstanding experts on organized crime, Sgt. Ralph Salerno of the New York City Police Department. When an Italian-American racketeer complained to him, "Why does it have to be one of your own kind that hurts you?", Sgt. Salerno answered:
I'm not your kind and you're not my kind. My manners, morals, and mores are not yours. The only thing we have in common is that we both spring from an Italian heritage and culture-and you are the traitor to that heritage and culture which I am proud to be part of
Grutzner, City Police Expert on Mafia Retiringftom Force, N.Y. Times, Jan. 21, 1967, p.65 col. 3.
The most significant group in organized crime thus consists of these 24 groups allied with other racket enterprises to form a loose confederation operating in large and small cities. In the core groups, because of their permanency, of form, strength of organization and ability to control other racketeer and legitimate operations, resides the power that organized crime has in America today.
Each of the 24 groups is know as "family," with membership varying from as many as 700 men to as few as 20. For an extensive discussion of the internal structure of the organized crime groups, see Cressey, "The Functions and Structure of Criminal Syndicates, "Task Force Report at 25, et.seg. Seealso, Narcotics Hearings,89th Cong., Ist Sess., pts. 1 & 2 (1963), 1st & 2d Sess., pts 3 & 4 (1963-64), 2d Sess., pt. 5 (1964). Most cities with organized crime have only one family; New York City has five. Each family can participate in the full range of activities in which organized crime generally is known to engage. Family organization is rationally designed with an integrated set of positions geared to maximize profits. Like any large corporation, the organization functions regardless of personnel changes, and no individual-not even the leader-is indispensable, if he dies or goes to jail, business goes on.
The hierarchical structure of the families resembles that of the Mafia groups that have operated for almost a century on the island of Sicily. Each family is headed by one man, the "boss," whose primary functions are maintaining order and maximizing profits. Subject only to the possibility of being overruled by the national advisory group, his authority in all matters relating to his family is absolute.
Beneath each boss is an "underboss," the vice president or deputy director of the family. He collects information for the boss; he relays messages to him and passes his instructions down to his own underlings. In the absence of the boss, the underboss acts for him.
On the same level as the underboss, but operating in a staff capacity, is the caporegime, who is a counselor, or adviser. Often an elder member of the family who has partially retired from a career in crime, he gives advice to family members, including the boss and underboss, and thereby enjoys considerable influence and power.
Below the level of the underboss are the caporegime, some of whom serve as buffers between the top members of the family and the lower-echelon personnel. To maintain their insulation from the police, the leaders of the hierarchy (particularly the boss) avoid direct communication with the workers. All commands, information, complaints, and money flow back and forth through a trusted go-between. A caporegima fulfilling this buffer capacity, however, unlike the underboss, does not make decisions or assume any of the authority of his boss.
Other caporegime serve as chiefs of operating units. The number of men supervised in each unit varies with the size and activities of particular families. Often the caporegima has one or two associates who work closely with him, carrying orders, information, and money to the men who belong to his unit. From a business standpoint, the caporegima is analogous to plant supervisor or sales manager.
The lowest level "members" of a family are the soldati, the soldiers or "button" men who report to the caporegime. A soldier may operate a particular illicit enterprise, e.g., a loan-sharking operation, a dice game, a lottery, a bookmaking operation, a smuggling operation, on a commission basis, or he may "own" the enterprise and pay a portion of its profit to the organization, in return for the right to operate. Partnerships are common between two or more soldiers and between soldiers and men higher up in the hierarchy. Some soldiers and most upper-echelon family members have interests in more than one business, licit or illicit.
Beneath the soldiers in the hierarchy are large numbers of employees and commission agents who are not members of the family and are not necessarily of Italian descent. These are the people who do most of the actual work in the various enterprises. They have no buffers or other insulation from law enforcement. They take bets, drive trucks, answer telephones, sell narcotics, tend the stills, and work in the legitimate businesses.
The highest ruling body of the 24 families is the "commission." This body serves as a combination legislature, supreme court, board of directors, and arbitration board; its principal functions are judicial. Family members look to the commission as the ultimate authority on organizational and jurisdictional disputes. It is composed of the bosses of the nation's most powerful families but has authority over all 24. The composition of the commission varies from 9 to 12 men.
The commission is not a representative legislative assembly or an elected judicial body. Members of this council do not regard each other as equals. Those with long tenure on the commission and those who head large families, or possess unusual wealth, exercise greater authority and receive utmost respect. The balance of power on this nationwide council rests with the leaders of New York's 5 families. They have always served on the commission and consider New York as at least the unofficial headquarters of the entire organization.
Organized crime today is increasingly diversified and sophisticated. One consequence appears to be significant organizational restructuring. As in any organization, authority in organized crime may derive either from rank based on incumbency in a high position or from expertise based on possession of technical knowledge and skill.
Traditionally, organized crime groups, like totalitarian governments, maintained discipline through the unthinking acceptance of orders by underlings who have respected the rank of their superiors. Their code was "omerta" or silence. Nevertheless, since 1931, organized crime groups gained power and respectability by moving out of bootlegging and prostitution and into gambling, usury, and control of legitimate business. Their need for expertise, based on technical knowledge and skill, increased. Currently, both the structure and operation of licit and illicit enterprises reveal some indecision brought about by attempting to follow both patterns at the same time. Organized crime's "experts" are not fungible, or interchangeable, like the "soldiers" and street workers, and since experts are included within an organization, discipline and structure inevitably assume new forms. It may be awareness of these facts that is leading many family members to send their sons to universities to learn business administration skills.
As the bosses realize that they cannot handle the complicated problems of business and finance alone, their authority is delegated. Decision making will be decentralized, and individual freedom of action will tend to increase. New problems of disci line and authority may occur if greater emphasis on expertise within the ranks denies unskilled members of the families an opportunity to rise to positions of leadership. The unthinking acceptance of rank authority may be difficult to maintain when experts are placed above long-term, loyal soldiers.
The leaders of the various organized crime families acquire their positions of power and maintain them with the assistance of a code of conduct that, like the hierarchical structure of the families, is very similar to the Sicilian Mafia's code-and just as effective. The code stipulates that underlings should not interfere with the leader's interests and should not seek protection from the police. They should be "standup guys" who go to prison in order that the bosses may amass fortunes. The code gives the leaders exploitative authoritarian power over everyone in the organization. Loyalty, honor, respect, absolute obedience-these are inculcated in family members through ritualistic initiation and customs within the organization, through material rewards, and through violence. Though underlings are forbidden to "inform" to the outside world, the family boss learns of deviance within the organization through an elaborate system of internal informants. Despite prescribed mechanisms for peaceful settlement of disputes between family members, the boss himself may order the execution of any family member for any reason.

B. The Amway Business
1. Family Structure
The Amway business has a "family" structure parallel to that found in organized crime. With respect to both organizations, the family orientation is twofold. First, every participant;in the business is considered a member of a "family," led by a particular individual at the top of a chain of command. Second, the business stresses involvement by participant's family members, such that wives and children are drawn into the business to perpetuate their family influence over time. Family dynasties result that may be passed from generation to generation.
One of the primary family lines relates to the Amway Corporation itself. Amway Corporation is a privately held company founded in 1959 by Jay Van Andel and Rich DeVos. The Amway Corporation primarily provides the various products and services that serve as a backdrop for the pyramid-type recruitment and motivational schemes undertaken in the Amway business. The control of the Amway Corporation and its related entities appears to be shifting to the sons of the founders - Richard DeVos, Jr. and Steve, Van Andel. Amway Corporation also has a Policy Board that consists of Richard DeVos, Sr., Steve Van Andel, Richard DeVos, Jr., Jay Van Andel, Cheri DeVos Vander Weide, Dave Van Andel, Doug DeVos, Nan Van Andel, Dan DeVos and Barb Van Andel Gaby.
In addition to the DeVos and Van Andel family, who control the Amway Corporation, according to a 1996 Amway Corporate Culture document there are at least eight "lines of sponsorship" that control groups of Amway distributors. Every family is involved in the Amway business, in terms of using the Amway Sales and Marketing Plan. However, each family also is involved in Business Support Materials (BSM), or "tools," which include books, tapes, and rallies. The leaders of the families sit on the Amway Distributor Advisory Board, where they work with Amway Corporation to develop the direction of the business. (AM0023684).
The Yager family has the largest organization in North America. Dexter Yager runs his organization, but has an "inner circle" of about 20 key Diamonds that work with him in a leadership role. Yager also has a tool business called "Internet" which provides BSM to thousands of Diamonds and Direct Distributors. The Corporate Culture Document states that "loyalty to Dex is paramount to have a voice in the organization," a statement which is also reflected in various lawsuits that have been brought involving Yager and his company as defendants.
Another large family is the Britt family (aka Britt East Coast), with Bill Britt as the "unchallenged leader." This family is comprised of over 149,000 distributorships, and is located primarily in the East. Bill Britt sets policy along with some "front-line" Diamond leaders, and decisions are ratified by a management team that includes 20 additional Diamonds.
Other families include: the Childers family (run by a leadership team of six Diamonds); the Stewart family; the Gooch family; the Bryan family (aka Down East); the Wilson family (aka WOW - Wilson Out West) - with Don Wilson also being one of Dexter Yager's "inner circle;" the Puryear family (aka World Wide Drearnbuilders); the Hays family (aka IC or International Connection); the Matz family (aka IDA or International Diamond Association); the Dornan family (aka Network 2 1); the Strehli family (aka Creative Life Styles); and the INA (International Networking Association) family, run by a group of seven families.
The Amway business stresses that once you are involved, you are a member of the Amway family, and your upline and downline are part of your family. (TS0000058). You are to "edify" or honor your upline, and "counsel" with them regularly. The "upline" assume virtual "parental" control, and distributors are urged to "counsel" on all aspects of their life, including topics such as which car to buy or how to handle marital problems. Distributors are told how to dress - for example, "Wilson women" (those in the Don Wilson family) at functions do not show ankles, thighs or cleavage. Amway becomes a way of life for its participants, much like those involved with the Mafia.
In addition to involvement with the upline and downline "family," distributors' actual family members are drawn in to the Amway business as a matter of right, apparently resulting in family members being given responsibilities that may outweigh their capability. Amway tells distributors that when they are ready for retirement they should start to delegate more day-to-day functions to family members. A model of this approach is the Amway Corporation itself. Plaintiffs' counsel recently deposed David Van Andel and Nan Van Andel, both of whom have held high positions within Amway Corporation and its related corporate entities. The deposition testimony reflected a lack of knowledge and business background that suggests neither person obtained or retain their position on merit, nor would they continue in their position in a normal business. This is also a characteristic found within the Mafia.

2. Association-in-Fact
The major Amway families do not, in most cases, have a formal legal relationship among each other. All distributors must enter into a distributorship agreement with Amway Corporation to recruit new distributors and sell Amway products and services, but Amway asserts that distributors are independent contractors, involved in their own businesses. Moreover, with regard to the tools business, there appears to be no legal relationship whatsoever between Amway Corporation and the major families - each family has its own tools program that it runs independently of Amway Corporation.
In order for the Amway business to function, there is an association-in-fact among the participants. The large family leaders, e.g. the Yagers and Britts (and their corporations) work with the DeVos and Van Andel family (Amway Corporation) to ensure the continuing operation of the business. Some mechanism is necessary due to inherent tensions and power struggles that arise. For example, in the early 1980's DeVos and Van Andel saw the tremendous income and power accruing to large family leaders through their tool businesses. The income from the tool business of the major uplines reportedly far eclipses their income from the Amway plan. DeVos spoke strongly against this over-emphasis on tools, and warned that it might damage the Amway business as a whole. DeVos and Van Andel were apparently hamstrung, however, in taking action because the large distributors such as Yager could simply take his downline out of Amway, with potentially devastating results to DeVos and Van Andel. In fact, it was in just this manner that DeVos and Van Andel formed Amway. They had been distributors for a company called Nutrilite, but left, taking their distributorship organization with them, and looking for a product to sell. DeVos and Van Andel settled on L.O.C., a liquid cleaner, and that began the Amway Corporation.
The Amway business is governed by the leaders of the various families. According to the formal structure, the Amway business is governed "in partnership by the Amway Policy Board consisting of the co-founders Rich DeVos and Jay VanAndel and other family members, and the Amway Distributors Association Board consisting of distributor leadership who are nominated and elected to their positions." (Amway Corporate Culture - AM0023672). The Amway Distributor Association Council/Board advises and consults with Amway Corporation on all aspects of the business. (ADA59). Thirty distributors serve. Fifteen are elected by all qualified direct distributors, and 15 are elected from Council members from slate nominated by Amway Corporation. The Council is led by the Executive Committee. (ADA63). The Executive Commiittee of the ADAC includes heads of the major families, e.g. Britt and Yeager. (ADA 18).
The manner in which the ADAC is structured ensures that either the major family leaders, or their designees, are elected. There is a three-year term limit, but powerful leaders such as Yager and Britt may subvert the limit, either through designees or through "bending" the structure. For example, Yager and Britt were invited to ADAC meetings even after their terms expired, with Amway Corporation picking up their expenses. (ADA 1019).

3. Legal and Illegal Activity
The association-in-fact enterprise among the Amway participants is used to pursue both legal and illegal activity. There are legal products and services offered sales of name brand merchandise or services such as MCI or VISA. Plaintiffs allege that the structure is also used, however, to pursue illegal activity: the Amway Sales and Marketing Plan is a pyramid scheme; the "tools" business is a pyramid scheme; consumers are induced, through false promises of wealth and other misrepresentations, to join Amway; distributors and potential distributors are induced, through misrepresentations, to purchase motivational tools and attend motivational rallies; distributors and consumers are induced, through product disparagement such as spreading the rumors of P&G's Satanic connections, to purchase Amway products. These illegal activities are undertaken separate and apart from the legitimate manufacture, distribution and sale of products or services.
Apart from the illegalities alleged by plaintiffs in various civil cases, Amway has a history of documented illegal behavior. In 1979, the FTC ordered Amway to cease and desist from illegal price fixing. In 1983, Amway Corporation and Amway Canada Ltd. paid total fines of $20 million ($16 million by Amway Corporation) and pled guilty to criminal charges of defrauding Canadian Government through customs violations. Canadian authorities had charged that Amway set up group of dummy companies and created fictitious trade between them to get Canadian customs to accept a lower value for goods. (ROSLONIEC 30, 3 1). A statement by Amway as part of the plea acknowledged that the allegations of the Canadian government were "substantially correct." Id.

4. Corporate Structure
The Amway business also uses a variety of corporate structures, which may have the dual effect of insulating individuals from liability and masking illegal activity. The Amway Corporation, for example, uses a myriad of corporate subsidiaries and related entities, and the relationship among them is not clear from the publicly filed papers. Moreover, deposition testimony suggests that a number of the corporations do not observe the normal corporate formalities. James Rosloniec is a Vice President of Amway Corporation, in charge of audit and control. Despite his high position in Amway Corporation, when deposed he did not know what Amway Financial Services, Inc. does, nor did he have any knowledge of the following Amway-related organizations - Amway Jewelry Company, Amway Realty Network, Inc., Group Fifty Corporation, Merchandising Products, Inc., Nutrilite Products, Inc., Nutrilite Products, Limited - New Zealand, Sunrise Auto Plaza, Inc., Taerus Expo Corp, American Way, Limited, Video Incentives, Plus, Inc., Amway International, Inc. Moreover, he often had little knowledge with regard to corporations where he is both and officer and director. For example, he is the Vice President and on the board of directors of HI, Inc.. Mr. Rosloniec "believes" this corporation owns a Hawaii distribution center, but he has never been to a meeting or board meeting. He "believes" he is president and treasurer of Amway Investment, Inc., which has a value in excess of $300 million. He "assumes" he is president of Amway Auditing and Financial Services, which is presently a shell corporation. Mr. Rosloniec is Vice President and Treasurer of Ja-Ri, which he knows owns residential property, although he does not know why or who lives in the residential property- All of this suggests that Mr. Rosloniec is little more than a "shill" for the DeVos and Van Andel family.
Most of the major distributor families also use the corporate form for their Amway-related business. Dexter Yager has D. & B. Yager Enterprises, Inc., which deals with the Amway sales and marketing business, and Internet Services Corporation, which deals with the tools business. Donald Wilson has Wilson Enterprises for his Amway sales and marketing business, and WOW International, Inc. for his tools business. These are all legally separate corporate entities, yet all work together to promote the Amway Sales and Marketing Plan and the tools business.

5. Dispute Resolution
The nature of the Amway related business lends itself to potential disputes. There may be disputes within distributor families, among distributor families, or between distributor families and the DeVos and Van Andel family. The subject matters may include territories, or rights to lines of distributors, or rights to engage in the tools business. The families strongly prefer to resolve all disputes internally. There is both a formal method of dispute resolution, in the nature of binding arbitration, and a more informal mechanism, with edicts from the family leaders. Only when a participant has nothing to lose" have they resorted to the courts, and these complaints offer a rare glimpse into the inner workings of Amway.
The formal mechanism for dispute resolution is set out in Amway's Business Reference Manual. When a problem exists, it is first discussed with the offender. If the problem persists, it is reported to your direct distributor (upline). If the problem still persists, a warning letter may issue with a copy to Amway. If this does not resolve matters, the direct distributor may take action, including termination. If the violating distributor is dissatisfied, he can appeal to Amway. There is an informal conciliation procedure with the Executive Diamond Conciliation Forum. If there is no informal resolution, the panel issues a recommendation. If the party disagrees, he can request a review before full ADA Board. Upon receipt of ADA Board or EDC Panel recommendation Amway reviews the matter. Amway issues a final decision, which is binding among the participants.
The informal dispute resolution mechanism is illustrated in the Musgrove complaint (Texas 1998). The Musgoves went to an upline with a complaint that their direct upline had illegally taken monies owed them and their downlines. Don Wilson, a described Yager "general," told them any solution would be solved within the Yager organization. The Musgroves were told that going to Amway or the ADA would be a "mistake." When there was no resolution by the upline, the Musgroves went to Jody Victor - a principal of the ADA. Mr. Victor acknowledged that Yager was in control of the organization and that Wilson was one of his generals. Mr. Victor said that to cross Don Wilson or Dexter Yager would be the equivalent of "being drawn and quartered." When nothing happened through the ADA, a last ditch effort by the Musgroves was to approach Amway Corp.. This simply resulted in alleged retaliation from Wilson and Yager, which led to the Musgroves' suit.

6. Control
The Mafia uses "omerta" and violence for control. Amway has other methods, with similar effect. Distributors must always honor their upline. No negative talk or action is permissible. A distributor who steps out of line is punished. Punishment may start off with being vilified by uplines as a "loser," as "negative," or as "brain-dead" which are typical Amway appelations for anyone who does not believe in the Amway system and the riches that allegedly flow from it. More serious offenders may be dealt with by having portions of their business taken away - e.g. they can no longer appear at rallies, or downline distributors are "re-routed." There are also reports of violence against those who attempt to take action against Amway.
The upline control is evident from recent complaints that have been filed in courts across the country. The Taylor complaint (State of Washington) alleged that the plaintiff/distributor's complaints about their upline led to defamatory statements by their upline to their downline. Their upline allegedly encouraged their downline to write complaints about the plaintiff, and their upline threatened that they had the authority, political connections and clout to cause the plaintiffs to lose their business. The defendants allegedly coerced distributors to buy motivational tools and attend functions; if they did not, they were to be "cut out like cancer." The Stewart complaint (Texas) alleges that uplines coerced attendance at "approved" functions, controlled by family leaders. Anyone trying to hold events independent of high level approved functions was "blackballed" from participating in other events. High level distributors would conspire to sabotage independent events, and organize boycotts. The Musgrove complaint quotes a high level distributor in Yager organization on an Emerald Club tape as saying: "I know one thing - I do not want anything that doesn't have Dexter Yager's approval - that equals devastation. -.. somebody will step on you."
A 1991 Forbes article relates that a former Amway CFO who resigned in 1979 says that he and his family received threats for years. His former secretary was helping the Canadians in their investigation, and said she was "roughed up" in Chicago and told to "stay away from Amway." Philip Kems, a former distributor writing an expose, charges that Amway used private detectives to follow him and rough him up. These are all control methods that are similar in function to those employed by organized crime.

IV. Supporting Exhibits
Attached are two charts I intend to use in conjunction with my testimony.

V. Material Reviewed
It is my understanding that counsel for plaintiffs will provide the listing of the Amway-related documents I have reviewed, prior to preparing this report, approximately one week prior to my deposition. The primary data I have considered in forming my opinion are:
Publications referenced in the background section on Organized Crime.
Texas Amended Complaint
Deposition of James Rosloniec and Exhibits attached thereto
Deposition of David Van Andel and Exhibits attached thereto
Deposition of Nan Van Andel and Exhibits attached thereto
ADA Answers to Interrogatories
ADA Responses to Document Requests
Amway Corp. Answers to Interrogatories
Intervention Pleading of Stewarts, et al. in Griffiths, et al. v. Amway Corp., et al., Harris County, Texas
Original Answer, Third Party Claim, and Plaintiffs' Claims by Jeffrey and Cecilia
Musgrove, Case No. 98-17491, Harris County, Texas
First Amended Complaint, Taylor v. Amway et al., State of Washington, Case No. 98-2-15585-0 SEA
Notice of Pendency and Settlement of Class Action, Hanrahan, et al. v. Executives Unlimited, Inc., Case No. 94-CV-4615, E.D. Pa.
Fourth Amended Complaint, Utah
Amway Corporate Culture (AM0023671)
Bergfeld International material (SCH 000202)
The Network Manual and The Distributor Network Manual (P&G 051904)
1979 FTC Order
12/9/91 Forbes article
2/16/98 Business Week article
Transcripts of rallies, including "What is This All About," Dexter Yager, Internet Services Corporation- 1994
November, 1996 Duns Business Records Plus - Report on Amway Corporation
"Family" messages and Family Matters messages: (AM 0026090-0026097, AM 0026164-0026170, AM 0026160, AM 0026162, AM 0026157 - 0025158, AM 0026155, AM 0026138-0026153)
September,1994 Amagram (P&GO017672) (policy board)
Intemetsite: http://www.amway-abn.com
Business Reference Manual(1994) (AM3331)
Letter from Avon (PG 0216932)
The Amway Business Review (incorporating the Amway Sales and Marketing Plan)
The Direct Distributor Manual (AM 3918)
Amway Business Compendium (S 00331 1)
Organizational Deviance in the Direct Selling Industry: A Case Study of the
Amway Corporation, Carol Lynn Juth-Gavasso, August 1985
Charlotte Business Journal, 2/13/95 article "The Amazing Money-Making Machine"
Internet site material - Probst
Internet site material - Amway: The Untold Story
Directly Speaking, Rich DeVos, January and March.-."1983

I have been retained by Plaintiffs' counsel, and I am being compensated at the rate of $550 per hour, plus expenses.


Friday, April 16, 2004

Allright, well it has been several days since my last entry and now I have too much to say. I guess I'll just give everyone a little background on me. I was born and raised in the Suburbs of Detroit, MI. I lived their for exactly 20 years(I left for basic training on my birthday in 1994). When I was a kid I used to go over to my dads house and he would always have some kind of motorized vehicle that I could play around on, but my favorite was an old Arctic Cat Lynx. I dont remember the specs on the sled, but its what I "cut my teeth" on, and my sickness was born. There is nothing like snowmobiling, I am addicted to it. Well, fast forward, I graduated Air Force Basic Training and Tech. School and I was stationed in Grand Forks, ND. I hated it at first, but, it grows on you. Some of the best people in my life, I met in ND. ND is where I met my "adopted" family, very nice people and they were snowmobilers. It had been a few years since I had ridden, but the sickness was still alive, and growing within me. The first time I cracked open the throttle on one of their sleds, I was once again hooked, and hooked for good this time. I will never not own a snowmobile. So, I spent 8 years in ND, I got out of the Active Duty AF and moved back to MI. And MI is where I am writing this from right now. This last year has been the worst snowmobiling year I have had in a long, long time. I did not get to ride once, it about phucking killed me. Now for the good news, I am going back into the Active Duty AF as a Recruiter and I have chosen Fargo, ND to be my home. I just found out today that I will be enlisting on May 13. I cant wait, I really miss being part of the "team". I have been in the AF Reserves for the last year, but it just wasnt the same. See, now I have lost my place and I am rambling again, I just have too much too say. Well, since I have forgotten where I wanted this post to head, Ill just end it here and try again tommorrow, take it easy everybody, Chris.

Sunday, April 11, 2004

Comments enabled!!!
Well, its Easter, and although I am not a religious man, I celebrate all of the religious holidays, there seems to be a conflict there huh? I was basically raised without any religious influence, yet we celebrated all of the holidays. If you ask my mom she will claim that I was raised as a Protestant, yet we never went to church or even spoke of religion in my house the entire time I was growing up. I didn't even know exactly what X-mas was about until I was well into my teens, and I had to find out for myself. I'm not bitching about it, in fact Im glad I was raised in this manner. I feel it has given me the opportunity to judge all religions equally and make my own unbiased choices about how I live my life. I have chosen to be non-affiliated, I don't want anything to do with the whole mess that is religion. I don't want to be called(or grouped) an atheist or an Agnostic either. To me religion is far and away one of the most destructive things that this planet has ever seen, so many dead people all in the name of Jesus. I guess everybody needs something to believe in, for me, I believe in me, and my ability to get things done, I believe in my friends and everyone in my life that I care about, and that's enough for me. So, why do I celebrate religious holidays? I guess it comes down to the fact that I don't look at religious holidays as religious, for me they are a special time to spend with my family and see people that I haven't seen in a while, a small family reunion if you will. Which I imagine is a truth for even the most religious people on the planet too. Well anyways, Happy Easter everyone, whatever Easter means to you. Also, Go Wings!!!!! Well, they are up 2-0 on Nashville now and hopefully they can extend that lead tonight. It's looking like its going to be a good playoff year!

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