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August 15, 2005

Pyramid-Scheme Profiling

Mike Wagers knew the couple in his taxi weren't telling the truth, and that led him to call in a tip to police that ended a manhunt for a fugitive couple. Wagers's passengers turned out to be the Hyattes, a couple on the run since Jennifer Hyatte allegedly shot and killed a police officer transferring her husband, George, in Tennessee (CNN). Wagers, though, didn't think he was transporting suspected murderers. He just knew he wasn't carrying Amway reps.

The Hyattes, who traveled in Wagers's cab for over 100 miles from Cincinnati to Columbus, told Wagers they were on their way to an Amway conference. But Wagers became suspicious when they didn't try to sell him water filtration units, cookware, or vitamins. "They didn't strike me as the Amway type because to be honest they weren't very pushy about their product and I've dealt with them before so—that was my only real suspicion," Wagers told CNN.

In an AP article, Wagers elaborated on his Amway theory. "Amway people are all about Amway, and when they didn't try any conversation further about it, that's when I pretty much thought, 'Well, they're not with Amway; they're doing something else.' "

What makes Amway people Amway people? Several calls to Amway were less than revealing. Candace at corporate communications told Gelf that the question itself is confusing and would probably not be something the corporation would want to answer. "We really don't have anything to offer," she said. Further pressed (what, you think Gelf has better things to do?), Candace promised Gelf several times that she would look into what the company felt were the characteristics of Amway reps and return with an answer within the day, but five days after our first communication, she hasn't gotten back to us.

Eric Scheibeler, though, believes he may have some idea. Scheibeler, a former federal auditor, rose through the ranks of Amway and discovered what he claims is "perhaps the most well organized consumer fraud in history." In his book Merchants of Deception, he details his interactions with the company and claims that the senior management has been collaborating to systematically defraud investors for several decades. (You can download it free here.) Scheibeler examines the business model behind the company and alleges that it combines a religious aura with a pyramid scheme (Wikipedia) to defraud Amway reps and turn them into vultures who prey on unsuspecting people in an attempt to recoup some of their investment.

"A twisted, perverted, cult version of Christianity is utilized as bait to lure good people to their economic demise," Scheibeler tells Gelf over email. (Though Amway didn't respond directly to Gelf, it does have a page on its site entitled "Business Opportunity or Pyramid Scheme" in which it explains that because Amway sells actual products, it fits better into the former category.)

Wagers, the cab driver, was never worried for his life. He was just confused by the couple's lack of pushiness. As he told the AP, "They gave me no cause for suspicion other than the Amway thing didn't really stick."







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