CHAPTER 12
The Turning Tide
"And all we have ever had in the business is our Amway income. We still do not have tool income. That might come as a surprise to some of you. But that’s all we have is Amway income. But do you know why we have a big Amway income? It’s because we took some of the principles from the Bible and we lived by them."
-We were home when the phone rang, and I was pleased to hear Bob Leatherman from Distributor Relations at Amway. He had always been pleasant with me. He explained that he had a gentleman named Dan Bailey on the line. His department was not revealed to me, but I assumed Dan was from Amway’s legal department and knew instinctively that he had been sent a copy of the packet. There was a certain relief in having them call, as I wanted to fill them in on the whole situation. I still wanted to believe that Amway was a good, honorable business that had been prostituted by people like Dexter Yager and Zack Walters. The founders were Christian billionaires. I felt sure they would be disgusted to learn what had happened to us, our group, and the entire Yager/Walters organizations globally.
Dan and Bob seemed very professional and friendly. Initially, it was reassuring to speak with them. However, we hadn’t been on the phone long, before they made a tactical error. They lied to me! They said that they had heard I had some concerns about the business, and they wanted to know why I would stop building the business after having achieved the Emerald level. I knew they had the letter in their hands. I had just mailed a copy of it directly to Bob Leatherman, but that copy couldn’t have reached him yet. Zack or Kerry had to have faxed them a copy. I told them that they could expect a relatively thick packet of documentation from me shortly. They continued to prod me for information and tried to express some ‘genuine concern’ and wanted to help resolve any challenges we had with The Business. They had claimed to have no idea what the issues were and just wanted to get them out on the table.
They pushed and probed me for information three or four times, which was too much like dealing with Zack. They appeared to be friendly and helpful and full of concern, yet they were lying to me. I knew that information this damning must have been forwarded to them immediately. I made it clear that I wanted no conversation with them regarding my exodus from The Business until they received and read my letter and supporting documentation. Finally, Dan admitted that he was looking at my letter. I immediately cut him off and asked if he was in another building on a conference call or in the same room with Bob. They admitted that they were in the same room, and I was infuriated. It was beyond comprehension that they had not read and discussed the revelations of my letter and the enclosed documentation at great length. Here was the same kind of deception that Zack had practiced on us.
I flew into a rage. I could not believe they were pulling the same deceitful crap on me again. Bob acknowledged that he had read the letter and explained that they just wanted to give me the opportunity to state it in my own words. "I thought the letter was written in my own words, wasn’t it?" Then they started the good cop/bad cop routine. Bob remained very friendly, and Dan stated that he was actually from the Rules and Business Conduct department and that I had violated several rules by sending this letter into our organization. Wait a minute, it was against the code of conduct to advise people that they were being defrauded? We played good cop/bad cop for a while, and I was amazed at how pathetic it was all becoming. They were using the same playbook that Zack liked to use. They appeared very kind and concerned but were trying to steer my decisions. We closed the conversation on a friendly note, but I was mentally and emotionally exhausted. It seemed my hope of integrity at some level of The Business was wearing very thin.
The night came when Kerry and Chris were to have the meeting with all our leaders to erase us and explain away the letter. I had a Direct in attendance who took notes at the meeting for me. Kerry and Chris and their sponsor, Larry, ran the meeting. Larry was Chris’s brother, the one who had shared how "everyone in our area carried a gun," after I complained about Kerry brandishing a gun. The meeting was completely out of character.
Zack had always prided himself in personally solving challenges very quickly. He had taught us as leaders to put out a fire if we even saw a little smoke. He solved problems, particularly big ones, himself. Now he was sending those two? Perhaps he had wanted to distance himself from the liability and was sending them to slander us, so he could later say he was unaware of it. He had been calling Kerry, Keith, and Rick directly for the last couple of weeks.
Larry and his wife had been in Amway for around twelve years and were Direct distributors. They might have had a net income of around $5,000 a year, maybe less, after over a decade of solid effort. Incredibly, Larry started the meeting by saying that no one knew why I had sent the letter. He said that stressed-out people do wild, irrational things and that I was a poor money manger. I had expected this and was not shocked by it. He went through the standard ‘we love you and care for your best interest’ type of propaganda and spoke of how honorable Kerry, Chris, Zack, and Molly were. Larry was one of the people I had on tape, from years ago, telling us that we would make $100,000 a year as Emeralds. Now after we had quit our jobs, gone Emerald, and were destitute, we were bad money managers? There was a noticeable difference between the promised $100,000 and the under $30,000 income that we were actually making. Also, after over a decade in The Business, he had never come close to doing as ‘well’ as we had done; yet he was saying we screwed up. He was an airline pilot and had a nice home and car, and the group may have believed it came from his Amway "success". They were all making nearly nothing in comparison to what they were promised; yet they all thought that they were the only ones who were not making what they expected. That’s not so amazing, when you consider the effects of never being allowed to share negative comments or question the upline. People had no clue.
Distributors were advised at the meeting that it was dangerous to allow Kathy and me to have any contact with their organization. That was incredible, considering the fact that we had been lifted up as heroes on stage for years. Now we were a dangerous threat. Those present were advised to send us cease and desist orders, stating that they would take legal action if we had any contact with them or any one in their group. We had built these groups with them. They were our friends. They were family. This was insanity. Distributors were told that the information I sent out was full of lies. Distributors were told that I was not a team player and just had it in for Kerry and Chris. That was never the issue! The Business was (and still is) built on intentional misrepresentations that have cost all of us dearly.
Rick and Paula, though Emeralds, had been treated badly by Kerry and Chris, to the point where they had almost decided to quit. Rick had refused to work with them and now dealt with Zack directly to avoid any contact. He was asked to speak at the end of the meeting. He got up and told the group that he had no problem with Kerry and Chris and had not yet had the ‘privilege’ of working with them directly. Rick had been worked over by a master deceiver. In his response, I saw Zack’s artful work at its best.
Prior to this meeting, John had called Rick for Kerry, because they were not even on speaking terms. John was a Direct in our organization who was a very close friend of mine. We shared much more than the same name. I was advised later that John had been asked to call Rick to see if he was staying in The Business. He told Rick that when God was going to do something good for His people, like Quixtar, Satan would use even a good couple (Kathy and I) to destroy it. They all needed to pray for or against us. That was pure Yager/Walters system, pseudo-Christian psychobabble. All who were for the business were good and of God, and all who were against came from the very bowels of hell. Now, I was one of Satan’s handmaidens? I think not. That one was so ludicrous that it did not initially bother us that much. What was happening in the private meetings at Kerry and Chris’s house and with Rick and Paula was far worse. We began to hear bits and pieces as our leaders were very confused and did not know whom to trust. Those bits and pieces would be the worst things we had heard thus far.
The Pain of It All
June, one of our Directs who was a very good friend, called to take Kathy out to lunch. It was a nice break for Kathy to get out for a while with another woman just to relax a little. I felt relieved that they were spending some time together. Kathy was gone for a couple of hours. When she came back, I went to the door to greet her and hear some good news for a change. She looked sick. I asked her if she had enjoyed herself, but she said nothing. She could not speak a single word. Instead, she walked into our bedroom and collapsed on the floor. She wept uncontrollably, and I was not able to console her. Leaning up against the bed, I just held her until she could speak. She just kept saying, "You won’t believe what they are saying about us!" I sat there quietly thinking, what could be that bad? I already knew that they were saying that I was poor money manager and did not accept wise counsel. I had anticipated that. Was there more?
She finally was able to blurt out some of what she had been told. They were telling people that I was an alcoholic and drug addict, hiding this from the group during the past years.
Even I was shocked beyond words with that rumor. How could anyone be saying those things to people who had known us intimately for almost ten years? How could our friends believe these things about us? Kerry also held up a sealed envelope in a meeting and said that the information it contained would only be revealed in court. He said that the documentation was about us and was so hideous that if people knew about it, they would never even be able to look at Kathy or me again. June said that none of it sounded true but that they did not know what else to believe. Kathy was crushed. Rob and June were two of our dearest, closest friends. How could people even repeat, let alone believe, that trash? Those people had been our closest friends and nearly constant companions for almost ten years. We were always in the public and almost never alone. I was working on The Business day and night. When on earth would I have had time to drink or do drugs?
I immediately called Don, the doctor, and had him order a full drug screen for me at the hospital for documentation purposes. Within two hours of hearing the drug rumor, I was screened for all known drugs and had the results (which obviously were negative) sent directly to Don for safekeeping. I no longer felt safe even taking a prescribed medication for fear of rumor. Sadly, I gave the unused portion of my Valium prescription back to Don, who sealed and dated the vial for me. I could no longer even have the brief relief from nightmares that the pills had afforded me. Neither Kathy nor I were eating or sleeping well. In fact, we often went through the whole day without eating anything. The stress was mounting, as was the fear and anxiety in our lives.
Another distributor, we’ll call Dan, met with Kerry and was told that I had never worked for the Federal government as an auditor. They "knew" exactly when I graduated from college and all of my work history, and it was not possible according to Kerry. Dan was also advised that the tax returns I was showing people were falsified on my home computer. He was assured that you could print anything on a computer these days. He was told that I was very clever and could use my skills for both good and bad purposes. That was nonsense. Would I actually be making $100,000 a year and telling people that I only earned $30,000? Would I do that and then call it a fraud and quit just for the fun?
It became more and more evident that what people were being told did not even have to make sense. The message I sent out in the package to our leaders was both accurate and valid. The court cases and transcripts from counseling sessions and videos were very real. They were factual evidence. The tactic being used by my upline became clear. If the message could not be destroyed, then the messenger would have to be. We had no conception of how far they would go to completely annihilate us. We had greatly underestimated who and what we were dealing with.
Keith, the distributor whose wife had sent him a letter saying she couldn’t live like a single mother anymore, announced that after going Ruby, and driving 40,000 miles in a year, he had a net income of somewhere between $4,000 and 5,000 a year. He had said he felt like a phony. Our children went to the same small Christian school, because neither of us now trusted the ‘evils’ of a public school system. I was the president of the Parent Teacher Fellowship for this school.
We had a fund-raiser after school one day when Keith approached me. He was obviously very upset. He pointed a finger in my face and told me that he had it on good authority that my letter was full of lies. His wife had repeated this to other cross line distributors in our group. I would later be informed that Zack broke his own cross lining cardinal rule and asked Rick to call Keith and tell him that the letter I sent was not true.
I attempted to remind Keith of how unhappy he had claimed that he was feeling, and how he thought he’d be making more in a month than he makes a year by now. I brought up the fact that he almost never saw his wife and his children. He let me know, in no uncertain terms, that it was a lot better than having a job and being broke the rest of his life. He could not even see his own situation. He needed to get off the tapes, but there was no talking or reasoning with him. Nothing made sense. He was a middle-level insurance executive by profession, but he seemed unable to see the big picture.
I spoke with Sally who also was a close friend and a Direct in our organization. She and her husband were being audited by the IRS and having deductions disallowed. In any event, she was kind but very concerned. She, too, had heard the rumor of my drug use and also that I had a gambling problem. They had gone Profit-Sharing Direct and had bought tens of thousands of dollars of vitamins to do it. They were no longer buying huge quantities of expensive vitamins but were running their business at a loss, like most of our group. I tried to tell her how little money even the high-level distributors were making. She was a very smart woman, but she simply could not grasp what I was telling her. She just kept saying over and over that they did not understand what we did with ‘all the money.’ I tried to explain that there never was ‘all that money,’ and that was the whole point, but it only made her more frustrated. We parted as friends, but I was growing increasingly concerned for those who still seemed to be very much ensnared in this trap. She and her husband, an eye surgeon, were very intelligent people. How could they not understand the simple truth? They were dear, dear friends. Was I not expressing myself well enough to be understood?
We met with several more distributors at our house. None of them wanted to talk about their income, how much they were losing, or how little they were making. None of them wanted to talk about how much time they were away from their children, or the fact that nearly every weekend was now tied up with Amway business of one form or another. Most didn’t want to talk about any specifics. They were very, very bewildered people.
They tried to tell me how The Business was a good thing. They didn’t want to give up their dreams. I really began to feel like I was losing my mind. It looked like many of those good people might actually be manipulated into staying in The Business to their own family’s detriment. A growing torrent of conflicting thoughts whirled through my mind.
Some were acting like they did not know what to believe about us. I had never used drugs and rarely even drank a beer in the last ten years. Now, some of our closest friends were drilling me with questions about ‘my problems.’ We had made our lives an open book and shared information and documentation with everyone. We were willing to bare our souls to help these people understand the truth. Kathy struggled the most with this entire situation, because she is such an intensely private person.
The woman who delivered our mail came to the door and asked us to sign for some mail. We did that several times over the next few days, as we received letters from most of our leaders. I did not understand. Even after all that was revealed to them, they still believed that The Business was the only way for them to succeed and reach their dreams. This meant that I was a threat to their hopes and dreams for their families.
The letters we received were all nearly identical cease-and-desist notices that threatened legal action if we had any future contact with them or anyone in their organizations. We were left questioning what ‘have no contact’ actually meant? This was our family. We had no other friends. How could they possibly have believed all the garbage that was being told about us? They knew us better than anyone. The slander was vile and disgusting, but, fortunately, we did not hear the worst of it until months later.
Rick called. He and Kathy had always been close and related well to one another. Nevertheless, he advised her that neither she nor I were to have any contact with anyone in his organization. He and his wife were convinced we were trying to destroy their future. We were dumbfounded. He had been treated horrendously by both Zack and Kerry for years. They had gone Emerald, but their income was even less than ours. They were making near or under $20,000. He drove a Mercedes that he had purchased after going Emerald.
After one counseling session with Zack, he told us that Zack had made him feel like a moron for buying the Mercedes, because they had not checked upline first and gotten permission. In any event, I asked him where his group thought the money came from for the car. He didn’t have an answer. Here he was, with a pathetic income after having gone Emerald, and he was driving a Mercedes in order to perpetuate a false image of financial success in Amway. He told me that his group thought the money came from both his job and Amway. We both knew that it was a lie.
Our verbal warning to have no further contact was then followed up with a registered letter of the same nature. We had done everything but bled to protect our team when they were getting mistreated. As a result of The Business, they had suffered intense personal challenges. Yet he was nasty to Kathy on the phone. Somehow, we had become the enemy.
Remember Chip, the distributor who called me Sunday after the seminar when we did not show up? He was rather intrigued and initially amused when his sponsor and Kerry arranged to meet with him and his wife to explain away our exodus. Chip and his wife, Tina, accepted the invitation to meet with them but were fully aware of what was truly going on, because they had read the whole packet I had given them. Their entire upline thought they were in the dark and knew nothing of our exodus. They went to the meeting just to see how far people would go to cover this all up. They were relatively new distributors and had not been in the system long enough to be influenced yet, or so I thought. I was still a little nervous about the meeting, for their sake.
What happened next is still shocking to me. Understand that Chip’s sponsor got the packet in the initial mailing and was aware of the entire situation. Before the big meeting, Chip’s upline led him to believe that I had cancer, and my trip to D.C. was to seek medical help at Johns Hopkins Hospital.
They arrived at the meeting and waited. Kerry drove up in his white Mercedes, fashionably late, and did his typical Zack Walters’ imitation. He came in totally pumped up positive and talked about Quixtar and how much everyone was going to make. He told them that he was going to show them how to buy a laptop for The Business and pay for it in 90 days. I found all of that to be very interesting, because I knew that most active distributors in Kerry’s group lost thousands of dollars every year, despite incredible efforts.
Zack must have coached Kerry very well. He cushioned his talk with a story about some "stupid distributor" who questioned Zack about why one Diamond was in the old profiles but not the new one. The Diamond had been ‘erased.’ He described how Zack handled it and told the distributor to ask only questions in the future that would benefit his business. The point of this oft repeated example was that you needed to mind your own business; if you were worrying about someone else’s business, you would never succeed. The Business was perfect, but we just had to deal with people who were imperfect. The bottom line was, don’t ask any questions about Kathy or me or anyone else.
Kerry then went on to explain our exodus from Amway. He told Chip and Tina that Kathy and I had some very serious personal challenges we were working through, and our only request was that no one contact us. If they truly loved us, they would need to follow our request. Remember now, they had been told that I had cancer. They were then told that the very best thing they could do was to build The Business like never before, because Kathy and I were going to need the income. The best thing they could do for us was build The Business to Diamond, so we would open the Amagram one day and see all of their pictures. Under no circumstances were they to contact us. Our only request was for privacy. After lying directly to them, Kerry then looked them in the eye and told them that he loved Chip and Tina and that he was going to be the best friend they would ever have.
Kerry was very lucky that he was not attacked and beaten unconscious at that moment. With personal fortitude, Chip and Tina never let on that they knew the truth. The next day they made it clear that they knew the entire situation, and their new ‘best friends that loved them’ became quite nasty with them.
I was shocked to hear the cancer story. How low could these people stoop? How could someone lie and then look them in the eye and tell them that they were loved? I could not help but wonder what the going price was for the selling of a soul. We were only hearing bits and pieces of what people were being told by our upline in the group. There seemed to be one wave after another of lies and deceit. We were shell shocked that many of our closest friends now viewed us as their enemies. I was growing more fearful for our safety.
I realized that that the potential for physical harm was an ever-increasing possibility to my family and I. You see, I had helped this group of people believe that succeeding in Amway was the only single way to achieve happiness, success, and God’s will in their lives. Now I stood between them and their goals. I was in a very dangerous place. I really did not know how far these people would go. There seemed to be no limit.
The Paper Chase
I began to do more research. Actually, I was going over some of the nearly two-foot tall stacks of written documentation I had already accumulated but with a difference. Now I was able to understand and accept it. I found out that Amway had committed and was found guilty of fraud in one of the largest cases in Canadian history. Colin Grant, a professor of religious studies, made the following observations of this situation.
The denouement of the Amway integrity-success story was reached in 1983, when an Ontario Supreme Court Chief Justice fined Amway 25 million dollars, "the largest sum that a Canadian court has ever levied and one of the heaviest criminal penalties ever imposed against any corporation in the world" ["Amway Cracks—And Pays," Macleans, 11/21/83] for evasions of customs duties. Behind this conviction lay an elaborate scheme of dummy invoices, and even a dummy corporation, designed to underprice Amway products shipment into Canada.
…There is no doubt that the President and chief executive officer of Amway were deeply involved in these developments. This is indicated not only by the magnitude of the operation, but by the nature of the corporation.1
Grant goes on to state the following:
The conviction for defrauding Canadian Customs was handed down in 1983. The book Believe! in which DeVos give the enthusiastic endorsement of integrity in business and of the unavoidability of ethical claims quoted above, was published in 1975. But this book was reissued in a new "New Revised Tenth Anniversary Edition" in 1985, without any reference to the Canadian Customs conviction. How can the president of a company, which holds the distinction of having been fined "the largest sum that a Canadian court ever levied and one of the heaviest criminal penalties ever imposed against any corporation in the world" reissue a book two years later insisting on the indispensability of honesty in business, without acknowledging his own complicity in such blatant dishonesty?
The most obvious explanation is that this was possible because of the foreignness of Canada, that is, because of the lack of awareness of, and interest in, what happens in Canada on the part of the American media and people…. It would be difficult to imagine his reissuing of his paean to honesty and integrity in business, if the conviction to which his company was subject had been imposed by an American court.
For a corporation to compromise ethical principles is by no means unique, or even surprising. But when the president of a corporation which has been subject to one of the largest criminal penalties in history reissues a book insisting on the indispensability of ethical integrity in business, without acknowledging that crime, this confirms the worst barbs of cynics about the antiethical nature of business and ethics. For not only does such profession ring hollow in the light of the unacknowledged violation of these very principles in practice, but that failure of acknowledgement inevitably appears to confirm the suspicion that ethical profession is being used as window dressing in the interests of power and profit.2
What about full adequate disclosure? Why were Amway prospects never advised that the company was investigated and fined for fraud? This was unconscionable.
It’s Time to Sling More Mud
"You grow…or you quit…and starve the rest of your life. What’s the alternative?"
- Birdie Yager·
In one of Zack’s last calls, he assured me that I could sell my business and that it was worth "a lot." I had no interest in selling it to him or anyone else. Dan Bailey also felt a great need to remind me that I could sell my business to a member of my upline. I told him that I simply wasn’t interested. Although we needed money desperately, I knew that if I sold it and then exposed Amway and its motivational organizations as corrupt, I would be held liable for damages to The Business. Zack loved contracts and had once told us that even his warehouse employees had to read and sign every page of a 20-plus-page employment form. Now I understood why. It must have been a secrecy document. Despite the fact that I explained to Amway that I had no interest or intent of ever selling my business, they sent me a packet of information to calculate its value. That, too, was a pathetic joke.
They calculated its worth as being several times the income of the Amway distributorship. That would value our business at around $75,000. That was for a business that the upline had used to cull millions of dollars in tool money. Even though Amway had been fully aware of the existence and abuses of the tool business, they still pretended to ignore its existence or worth to the upline. It was a good deal for Zack to buy my Amway business for near $75,000. The Amway business had an average monthly net income (for tax purposes) of near $2,100 a month. Yet the tape, book, and seminar income stream had brought Zack millions of dollars. Do you think he would sell his business for several times what his Amway income was? They were dodging the real issue, and I had no interest in blood money.
I was fairly compliant but did not have many future contacts with Bob Leatherman at the distributor relations’ level. He left Amway soon after all of this started. (I would like to believe that his conscience got the best of him, and he would not bow down to Amway.) Dan Bailey took over handling my case, as the head of Amway’s Global Rules and Conduct Division.
It soon became apparent to us that he headed up Amway’s goon squad. This particular department seemed to be just as unethical and morally bankrupt as the upline from which we were attempting to escape. Dan told me that I had broken several rules of conduct and had jeopardized our distributorship. In a telephone conversation, he explained how I had violated rule 102(d) of the rules of conduct by sending my packet of information to non-personally sponsored distributors. According to him, having contact with those people without permission was a violation of that rule. I was still predisposed to following authority and agreed not to have negative contact with distributors in depth.
I had actually refused to give the packet to two distributors who had requested it. It dawned on me that Dexter, Zack, and all the Diamonds had contact with any and all distributors in depth almost daily. I found the rulebook and opened it to 102(d). I was surprised to learn it had nothing to do with what I had been told. Rule 102(d) prohibits contacting non-personally sponsored distributors for the purpose of soliciting them into another sales/business venture. Zack had told us that once upon a time, Dexter had contacted him and many other non-personally sponsored Diamonds and called them together for several investment deals, including a fast food chain called Dexter’s, a bank, and a travel agency. Zack’s current Profiles of Success alleged that he was the primary shareholder for the largest travel agency in the country.
I brought this to Amway’s attention and was told that this interpretation was used to "extend support and protection to the personal businesses of Amway Distributors." In the same correspondence, he also advised that,
Additionally, Rule 102(n) stipulated that:
"An Amway Distributors must operate his or her distributorship in a financially responsible, solvent and business like manner." Sending a letter in depth and crossline disparaging your line of sponsorship could be considered in violation of this rule. Thank you for your continued cooperation with this issue."
My interpretation of the rules was very different. We had never even heard of any of them, let alone their enforcement. It sounded to me like the rules were being twisted and formed to make problematic distributors go away quietly. Perhaps it had worked, and that was why it had gone on for so long. Informing our downline, and Amway, of possible widespread, systematic fraud was a violation of good business principles? This did not make sense, because I still thought that at its core, the Amway business was good.
The facts that I would soon discover about the Amway Corporation and its billionaire founder Rich DeVos were worse than anything I could have imagined. Incredibly, at this point, I still wanted to believe that at some level, Amway was a good business founded and run by truly compassionate people. Perhaps this has to do with my having spent ten years of intense labor on its behalf.
We received more bad news. Kathy and I were spending lots of time volunteering at the small Christian school where our children attended. The pastor, who was a good friend, called me to his office. His wife had taught all three of our children. He explained to me that he had gotten ‘the call.’ At first, I did not know what he was talking about. But then I remembered that I had confided in him regarding the vicious slander that we were being subjected to on a daily basis. An anonymous caller had phoned the office and told them that I was involved in immoral activities and that I might be a danger to the children. Now I was a child molester? How far would they go to destroy us? I offered to step down as president of the Parent Teacher Fellowship, but he insisted I stay. Thank God, someone still believed in me.
Keith was a Direct in our group, and his children were still attending this school. I felt certain his wife made the call or put someone else up to it. I never could prove who had done such a vicious thing, and after a while, it really did not matter anyway. Pastor Dave and his wife knew us too well to be concerned about this unfounded rumor, so we continued serving the school. However, we were hurt that anyone could possibly say something so damaging about me. It seemed like people were trying to kill us with rumors. Our dignity, our friendships, and our life were slowly being extracted from us. No wonder they call it character assassination.
Kathy had lunch with some of the women in one of our organizations. They were all undecided on The Business as yet, but they were still friendly with her. She needed this outing very much. Our home had become a pressure cooker, and it was a relief for her to get out for just a few hours. We both had become fearful to answer the telephone at times. We were reluctant to get the mail, as it brought so much pain in the form of cease-and-desist notices from our closest friends. How could anyone be afraid of his own mailbox? Kathy came home and seemed to be fine. Thank God, the lunch had gone well.
The phone rang, and it was one of the women from the lunch, calling from her cell phone. Kathy talked briefly to her and turned pale. She was friendly but got off the phone quickly and walked to our bedroom in a daze. Something terrible had to have happened. I just held her in my arms, as she once again sobbed uncontrollably. She could not speak for quite some time.
Our friend had not wanted to tell her in front of the rest of the luncheon group that a travel agent in our group had told her that Kathy and I were getting divorced. She also had heard that we were both suicidal, and people were concerned for our children. I had no words to comfort her, as tears flowed freely down my own cheeks. This was torture. The emotional pain was unending.
A few days later, Kathy and I were alone in the house, and I was cleaning out my desk to stay busy. I found the three small booklets that my kids had put together for me when I was away on one of my many trips. They had misspelled titles like Why We are Going Dimond. They were each several pages long and included each child’s precious dreams. I cried like a baby—not a silent cry. I cried like an infant, wailing loudly. Kathy came quickly to the room, but I couldn’t speak. I just held up the booklets. All I could say over and over again was, "I am such a loser." I could not tell you how long I mourned and grieved over the entire situation. I know that we both faded into a state of emotional numbness just to survive. At that point in time, I did not know for certain if we would ever completely pull up from the downward spiral we both were experiencing.
David and Goliath
"You are God’s anointed. You are God’s anointed. When you are God’s anointed, that 91st Psalm applies to you. People will die on the left and they will die on the right and you can walk on the snake’s head, you don’t do it on purpose it just happens."
Dexter Yager·We were getting pressure from Amway to buy back books and tapes from people who quit, after I told them the truth. I did not think that Amway was in the tool business or in the business of making forced sales. I re-read the BSMAA that we were forced to sign. It stated that tools purchased in the previous 90 days could be returned for refund at a reasonable commercial value. I shared this with the people that had quit, so they could recoup a small fraction of the funds they had faithfully dumped into Zack’s tool coffers.
When they attempted to return them to Kerry, he refused them. He told everyone that I had to buy the tools back. Dan Bailey of Amway now seemed to be very much involved in a tool business that Amway pretended not to know about. He also told me that I would need to buy back the tapes that were being returned. I was completely destitute after nine years in Amway. I was more worried about feeding my children, keeping my mortgages current, and having medical insurance than buying Amway tapes that were of no value to me. Distributors were then told to file complaints with Amway Rules and Conduct against me. In a bloodthirsty feeding frenzy, they did exactly that. I had become the enemy, and somehow, they all believed that I had to be punished.
These had been my closest and only friends. We had no other friends, and we had almost no social structure or interactions outside of Amway. It was as if we were falling into an endless black hole at an ever-increasing speed. I was sincerely concerned that our lives, mine particularly, might be in danger. Zack and my leaders were aware of my intent to go public from comments made in the initial packet that I had sent out. I had moved beyond playing a game of cat and mouse. It was more like Daniel in the lion’s den or David and Goliath.
I became increasingly fearful of Amway, Dexter, and Zack from information I was collecting and documenting. I earnestly believed there was enough money at stake for me to be permanently removed. Who was I, compared to five or six billion dollars a year in ongoing Amway revenues? The global tool business was conceivably generating a billion or more a year.
We became afraid to go outside. We were even fearful of going shopping for groceries. We were totally overwhelmed at the grocery store. We did not know what to buy. We did not even know most of the brand names, after having been maniacally loyal to higher priced Amway products. We had been so well conditioned by Amway that we felt guilty doing essential shopping. It was an anxiety provoking experience that we endured again and again. What if a distributor in our group saw us? By now, they had been told that I had lost my mind.
We did not know if they would look at us pityingly or spit on us. What if they saw us with a basket full of negative products? I had told them in seminar after seminar, "That is what broke people do." I carried a nagging thought, and I was afraid to tell Kathy that we might have to move far away to start a new life. I did not think we could live where we were much longer, but we did not have any money to leave. We could not believe that I went so quickly from being heralded as a hero and leader to being considered an alcoholic, lying, drug addicted, lunatic, gambling, adulterous, child molester. Yes, distributors were told that I was having an affair. What else would they think of?
In my heart, I actually thought that I had become a loser. None of the above accusations were true, of course, but I felt like I was still a loser. The mental stress was beyond comprehension. I had brought many good people to the slaughter, and I was unable to save or protect them. I had thought I was helping them. Now, some of these families were tens of thousands of dollars in debt, gone night after night, and weekend after weekend.
What a Tangled Web We Weave
I began to contact attorneys across the country for appropriate legal representation. No matter what course of action I took from that point, I felt Amway would try to take me down with their enormous legal weight and political influence. My godfather was a West Coast attorney. He knew F. Lee Bailey and agreed to contact him for me, without mentioning my name. He did and called back to say that F. Lee was a personal friend of Rich DeVos and would not take the case. Wasn’t that convenient! I contacted multiple offices of well-known attorneys across the country and began to understand why this had gone on for so long. Most wanted a $10,000 retainer and fees, as you went along.
I contacted the attorneys of plaintiffs currently suing Amway. I spoke with some of the plaintiffs and agreed to testify for them. We shared some vital information, and I was very thankful to talk to people that understood. My search for appropriate legal representation was discouraging. I was flat broke and nearing bankruptcy. One plaintiff had almost $150,000 tied up in his case. It sounded as if their strategy was to tie people up so long that they just relented or went broke pursuing justice. The odds did not look good. Goliath was standing tall and grinning at me.
The loaded gun that I wore every day did not give me peace. I could not go to the Attorney General’s office in our state’s capital city, because a high-ranking attorney in the building was an Amway Direct in Zack’s group. Everyone was incredibly well informed and connected. I remembered Dexter talking about having, as part of his group, secret service agents that reported what happened in the White House.
My sister-in-law worked for the local attorney general’s office, and I explained my predicament to her. She arranged a meeting with an FBI agent, Lou Glodek. He was very friendly on the telephone and arranged to come over to see me at my home. I was only slightly relieved, as I prepared by sending him a system video and a good amount of overview type documentation. I also put together another stack of documentation approximately four inches thick. There was plenty of evidence, all right.
I was terror stricken by what happened next. I was speaking with a current plaintiff against Amway and shared that I was going meet with an FBI agent. He said that there was a high-level FBI agent in the Philadelphia office who was an Amway distributor. He knew this because another plaintiff had attended the highly secretive, Yager Network Marketing Institute (YNMI), and the FBI agent had been his roommate. I was really scared now. Dexter had FBI agents too. This was spinning out of control.
My nightmares began to increase in intensity. They began every night like clockwork right around 3:00 a.m.. I was powerless to stop them. I hated sleep, yet was absolutely, completely exhausted. I literally felt a weight on my head and shoulders, almost as if I was carrying something that would eventually crush me. I had to resist. This had to stop.
I tried not to panic when the FBI agent pulled up. There were two people, which was not part of the plan we had discussed. FBI agent Lou Glodek came to the door and rang the bell. He was low key and identified himself by showing me his Federal ID. He identified the man with him as, Wayne Samuelson, an Assistant U.S. Attorney. I was not comforted and actually felt uneasy, as I brought them down to my small office. My fear and growing paranoia were getting the best of me. We made small talk, and they both seemed like good guys.
I asked Lou if the complaint I had filed stayed in his office or if it went to the Philadelphia office. He said it stayed local. I asked him if he knew the agent I had been told about in Philadelphia. He said that he did know him. I asked if he was aware of the fact that he was an active Amway distributor. He acknowledged that he knew that as well. He told me that the agent in question was not a high-level agent but a lower-level training agent that had recently retired.
I was still fearful. I could no longer definitely identify the bad guys. This was not like an old western where the good guys wore white hats. Oh, how I wished it were! I provided Lou and the Assistant US Attorney with a large amount of information, which I asked them to return. They took it, but I never saw it again. Fortunately, I had developed multiple copies of everything, protected and stored offsite, in the event we were "burglarized." I had also done extensive legal research into pertinent court cases. Wayne seemed to perk up when I handed him large quantities of pertinent legal documentation, referencing precedent setting court decisions. They left with the documentation I had provided them and took with them my hope for justice to be served.
The most pertinent came from a case called Webster vs. Omnitrition. This was a case that the United States Court of Appeals, Ninth Circuit received in September 1995 and rendered a decision on March 4, 1996. The plaintiffs, Shaun Webster and Robert Ligon, were distributors of a company called Omnitrition that handled health and skin- care products. They alleged and made a claim that they were the victims of a pyramid scheme that emphasized remuneration through personal recruitment instead of retail product sales.
The court found in favor of Webster, but the reason why was vital to our situation. Some background information is necessary for the importance of this decision to be clear. In essence, Omnitrition’s compensation plan may have been similar to Amway’s. Many multi-level marketing plans took this approach, as it kept them low under the regulatory radar, so to speak. In 1979, the Federal Trade Commission decided that Amway Corporation might resemble a pyramid structure but that it did not fit the definition of an illegal pyramid scheme. One of the biggest reasons that the regulators ruled in favor of Amway in their 1979 decision was this:
"Unlike pyramid companies, Amway and its distributors do not make money unless products are sold to consumers," the FTC said in its ruling. "The Amway Sales and Marketing plan is not a pyramid plan."3
An article in the Baton Rouge Advocate went on to describe the situation by saying this:
The FTC’s 1979 decision found that Amway’s own business plan passes legal muster because, among other things, it encourages retail product sales to consumers. In other words, the FTC said, the Amway plan has safeguards to keep distributors from making money just by buying products themselves and through sponsoring others to do the same, in endless chains. The FTC decision noted, for example, that one of Amway’s rules "provides that distributors may not receive a performance bonus unless they prove a sale to each of 10 different retail customers during each month.4
This is very strange, as we were taught by Amway Diamonds to recruit people to buy things at ‘wholesale’ from their own business and to recruit others to do the same. We were taught to remain loyal to our product line with 100% self-use, which often resulted in the hyper-consumption of Amway products that were frequently far more expensive than what could be purchased locally. I was not sure if a single distributor, of the thousands our organization brought in, ever did 10 retail sales in a single month.
Amway senior management as well as the Amway Diamonds were well aware of the fact that bonuses were being paid without the mandatory retail sales. We had met Larry Harper, a senior manager in Amway’s Distributor Relations department. He acknowledged publicly in an interview that bonus checks were paid to distributors who had no retail sales. When asked if a distributor could get a bonus without having retail sales, Larry responded, "Yes, you can."5
Let’s jump back to the Omnitrition ruling. The Ninth Circuit Appeals Court found against Omnitrition. One of the key elements for the decision was the fact that although Omnitrition’s compensation plan was similar to Amway’s, there was no real evidence of enforcement of the retail sales requirement.
Amway distributors were often told that Amway’s sales and marketing plan was the legal yardstick by which other multi-level marketing plans were judged. This gave a sense of credibility. As I read the court decision, I realized that Amway was flagrantly in violation of its own rules of conduct. If reviewed again with the same litmus test, the FTC would most likely find Amway to be an illegal pyramid scheme.
Rich DeVos made comments relevant to this issue when discussing the closed nature of the tool business, in which books and tapes were sold only to members of the organization. When there was no sale to a consumer end user, he described this type of business as an "illegal business -- in fact, it could be called a pyramid".6
From the information that I was uncovering and beginning to understand, it looked like Kathy and I, and perhaps millions of others had been recruited and induced to participate in not just one, but two illegal pyramid-type businesses. The first was the tool business that had no end user outside of the organization, and the second was the Amway business. From the FTC’s decision, the Appeals Court decision, and Mr. DeVos’ comments, it appeared that a multinational organization of distributors that had almost no retail sales was, in fact, an illegal pyramid. We would never have gotten started had we been told we were expected to sell Amway door to door.
With Amway’s full knowledge, recruitment exploded when this very important detail was left out of the recruiting and distributor training. Retailing to customers was not emphasized as the primary method of building sales volume. Zack and his leaders taught us exactly the opposite. We were told to recruit by never saying the words "Amway," "products" or "selling." We were told to recruit others by stating that we were offering a wholesaling business, in which you bought things from yourself and taught others to do the same. It was a lot easier to recruit large numbers that way. I had a Diamond on tape actually saying that he "didn’t sell stuff...." It was all beginning to fall into place.
I finally got it! We were able to recruit large numbers and were taught to sell them on the system, because that was where the Diamonds secretly made nearly all their income. Almost everyone in our global business lost money for two reasons.
The sheer recruiting effort and self-use propelled Amway into the billions in annual revenues, at estimated retail, and the tool money made the Diamonds rich. We thought they were doing it in Amway. I would soon be enlightened beyond my wildest comprehension when I obtained the actual figures from a tax return and saw how little an Amway Diamond made from Amway. However, there were battles to survive before that lesson in reality.
"Go read the Old Testament. See how mad I can get. No big deal for me to just tear bodies apart and throw pieces all over. You want me to get upset cause they scratched your finger? Let ‘em pour it all out and then let me chop their head off, I’ll just snap their neck off, throw them on the pile of life. You’re mine, trust me. Trust me. You’re not here without knowing what I’m talking about."
- Amway Crown Ambassador Dexter Yager