Cagey Consumer

Multilevel marketing madness still among us

Call them Multilevel Marketing Militants

From: The San Diego Union-Tribune, October 20, 1996, Sunday
A new multilevel marketing operation is tailored to the Common Law movement -- those folks who claim to be sovereign, and who handle disputes in their own courtrooms under their own quaint legal interpretations.

It's not the first time Common Law militants were involved in multilevel marketing, which is sometimes called pyramid marketing. After all, the convicted money launderer M. Elizabeth Broderick of Palmdale, who learned how to pass out phony comptroller warrants at the knee of Montana Freeman LeRoy M. Schweitzer, was once a multilevel marketing huckster.

The latest one is called Gateway to Financial Freedom, and it's hawked by the Global Prosperity Marketing Group. It operates out of mail drops in the Seattle area, but its security is so tight that its location is unknown.

"They are avoiding the semblance of a real office," says Mark Taylor, editor of San Francisco's Online Fraud Newsletter. "They are probably operating out of Canada."

Gateway makes wild claims: After you have recruited enough people into the scheme, you make 90 percent profit -- yes, 90 percent -- on each sale of the company's product.

What are those products? The first, Gateway I, costing $1,250, is a binder of audio cassettes telling you about the evils of the Federal Reserve, about offshore banking and trusts, as well as Common Law.

The second, Gateway II, costing $6,250, is a three-day financial seminar that improves your knowledge of offshore tax strategies, international trusts, and the like.

The third, Gateway III, costing $18,750, is a one-week workshop "presented by renowned international bankers and financiers," according to promotional materials.

If any of this sounds familiar to you, congratulations: It's very similar to the package offered by Orange County-based Investors International (II), whose astoundingly boastful claims were featured on these pages in early August. The II program also touted 90 percent profits, and offered cassettes and tapes on offshore banking and the like.

Both Gateway and Investors International claim to provide investors protection against a grasping and gluttonous government.

II is aimed at libertarians. But the founder, one Dr. Rudolf van Lin, made the mistake of claiming he had been "instrumental in the forming of the Libertarian Party." He had been no such thing, say the actual founders of the party, who denounce II as a get-rich-quick scheme exploiting the Libertarian name.

"The Libertarian Party has been working to ban advertising of Investors International" in its publications, says Richard Rider, a local Libertarian.

The Better Business Bureau reviewed materials from Investors International: "Because the profits are based upon the premise of recruiting rather than the underlying products or service, this appears to be an illegal pyramid scheme," says the BBB.

Michigan has slapped II with a cease-and-desist order. Oregon also has moved against the scheme, and the FBI and post office interviewed van Lin at the outset. Investors International would not comment on the moves by government entities and the BBB.

As far as can be determined, Global Prosperity Marketing was a separate pyramid -- called a "downline" -- within II. The BBB lists Global Prosperity as an additional trade name of II.

"It's my understanding that van Lin was telling Global that its recorded messages were exaggerated," says a Cincinnatian, who bought into II and was pitched on Global, and now wants to get his II money back.

It's hard to imagine anybody out-exaggerating van Lin, who claims he has "the most incredible money-making and profit-generating strategic financial program in the world" -- a program "in which nobody loses."

A senior executive of II says that Global Prosperity "was a group of people who were in our organization and are no longer with us. They used that name (Global) to sell our products. They resigned, felt they could do a different product better."

However, the differences between the Gateway and II products appear minor. Certainly, II's package is more expensive.

The supposed author of Gateway to Financial Freedom is one Keith Anderson, who, according to the promotional materials, "holds an Honorary Doctorate degree in Common Law. He has been actively involved in the study and practice of constitutional law, freedom and sovereignty for approximately eighteen years. He is highly regarded and recognized as one of the foremost experts and lecturers on Common Law."

The group lists its Ethics of Operations. "All disputes will be settled by the course of the Common Law," explain the promotional materials. "Each party to the complaint may select an equal number of Common Law judges (not Bar Association members). There is no appeal to the final decision of the Common Law court judges."

Product orders are shipped to a Massachusetts operation with its headquarters in the Turks & Caicos Islands, an offshore tax haven where Common Law adherents get their driver's licenses.


Global Prosperity Group & Investors International (First American Global Advisors)
Why GPG is in Deep Stuff (Scams & Cons board)
 

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Updated December 20, 1998