[3], In 1973, Holiday Magic's proceedings were prohibited by the Market Court of Sweden, and a fine of 2 million Swedish kronor was imposed. v. Holiday Magic, Inc., et al., N.D. California, Civil Action No. .to various charitable organizations. Both stood with their hands folded behind their backs as Dougherty announced the prison terms. Its inherently manipulative, deceptive, fraudulent, inauthentic, says Robert L. FitzPatrick, co-author of False Profits: Seeking Financial and Spiritual Deliverance in Multi-Level Marketing and Pyramid Schemes. Yet, he adds, its just entered the culture, and its completely normalized.. [7], When some salespeople found customers in short supply, Turner encouraged them to 'fake it until you make it,' by wearing expensive clothes and waving around $100 bills to lure in others". [5][29], William Penn Patrick bought Mind Dynamics in 1970. Mencken, Mr. Maxa says, would have loved Glenn Turner as one of those colorful rogues who enliven the American scene, a sort of cross between Elmer Gantry and Charles Ponzi, whose name is to financial pyramids what Tutankhamen's is to the original. "Our intent was to help people believe in themselves.". ={w5d[#"zM#h:.d\r,&4*
76I\@yH'H}T4idJq$nVsL(sXk TN4%8k;|PqK+I:p*K"&Z{Z;o;}X8z}r%. It is here that Mr. Maxa shows unusual ability to compress tedious and protracted legal wrangles (one trial lasted nine months) into an absorbing account. 748 as an example of pyramid schemes. What does it mean for a nation to valorize faking it as a means to an end and is there any way for Americans to turn back? 0000043655 00000 n
USA vs Glenn W. Turner, Nash Publications, New York, 1976 Rudy Maxa . 1973), participants in a pyramid sales scheme were found to be security holders, since they invested their funds in a common scheme dependent for success directly upon the collective sales efforts of the organization. Employing a pyramid selling scheme and an evangelical, downhome platform style, Turner cajoled thousands of ordinary folks into putting up varying amounts, in return for which they would sell Turner's beauty products. But perhaps the most accurate description of Turner's victims was that of some cynical lawyers at the Securities and Exchange Commission who referred to them as Thalidomides.. House Committee on Small Business, 1991. Turner, 53, created a $300 million empire in the 1970s by selling distributorships in his Dare to be Great and Koscot International companies. [4], The Securities and Exchange Commission also filed a lawsuit in 1972 charging that Koscot's program should be considered a security and comply with securities laws and regulations. 0000041122 00000 n
At the same time, the federal government became less likely to prosecute obvious malfeasance. . ". "All you have to do is believe it."[7]. ORLANDO, Fla. (AP) _ A three-story, 16-room castle owned by onetime motivational entrepreneur Glenn Turner is going on the auction block, with the Internal Revenue Service and other creditors splitting the proceeds. 0000031956 00000 n
Glenn W. Turner is now all but forgotten. 0000008799 00000 n
Turner and his best. Lawyers for Turner and Rector asked Dougherty to let their clients remain free while they appealed their convictions. Turner, 53, created a $300 million empire in the 1970s by selling distributorships in his Dare to be Great and Koscot International companies. House Permanent Select Committee on Small Business., 1973, P. 127, 137, 157, 203. Targets for citations in Chain Letter Evolution. 0000002201 00000 n
"The first time I ever heard those words from those men was in this courtroom," Rector said. 0000002472 00000 n
No. Turner had a talent for making people believe in him. These circumstances have led us into a society that is both more cynical and more predatory, both more receptive to and encouraging of outright fakers. Committee on Banking, Housing and Urban Affairs. endobj 0000005760 00000 n
What happened? "[9], The company was investigated by the Federal Trade Commission,[4][10] and in June 1973 the company was found guilty of deceptive trade practices. The empire collapsed in the early 1970s when authorities accused Turner of violating laws against pyramid sales, in which investors at the top make a fortune and those who get in later lose money. "Challenge had a positive effect on all of our lives," said one woman who was crying in the hallway outside the courtroom. 0000004119 00000 n
The sentencing of Dare to be Great supersalesman Glenn Turner, convicted of operating an illegal pyramid scam in Arizona, has been delayed for a week. [5] Attached to the side stands connected a lone, cylindrical tower that contains a stairwell on the inside. Occasionally the digitization process introduces transcription errors or other problems; we are continuing to work to improve these archived versions. [6], In February 1973, Holiday Magic was sued for calumny by Avon Products. "They have for years.". But Dougherty denied bond and ordered both men to begin serving their sentences immediately. Yes, Mencken would have loved it. Theres a difference between psyching yourself up and misrepresenting yourself, and the latter is where fake it has gone too far. hb```e`` /`"\}!5|Z1O(s@Tu4t5UL-
M-\\mm||=C#cbC"R32S trailer [16] Katz's Everybody's Business: An Almanac also referred to Holiday Magic as a "pyramid sales organization". Glenn W. Turner, 53, was sentenced along with Edward G. Rechtor by Superior Court Judge Bernard J. Dougherty, who said he had received scores of letters on behalf of the two Goldenrod, Fla., men. Holiday Magic Inc. et al. 256 pages. Extensive notes. JrsJk**j;{:[Z{&N. Since many of them were enmeshed as much by greed as by hope, one's sympathy is tempered. The unfinished castle, its boathouse, stables and surrounding 79 acres will be sold to the highest bidder after a federal court hearing April 26, according to court documents. [12] The indictment said that Bailey had appeared in a film made for Turner's organization and had appeared with Turner at several rallies. The book has its lighter moments. Turner himself offers one cautionary tale. Those in the positions of Instructor General, Trainer General, and Senior General were required to take the training. 0000031782 00000 n
Illustrated. According to 2019 surveys done by the Pew Research Center, almost half of us say Americans are not as reliable as in the past. [7] He told reporters as he was led away to jail: The good that I have done outweighs the bad. The saying became so pervasive in Amway that it would be the title of a 1980s expos by Phil Kerns. Turner, 57, served nearly two-thirds of a seven-year term in Arizona for fleecing investors in a scheme for distributing motivational tapes. In 1967 Turner borrowed $5,000 to start his Koscot Interplanetary Inc., a cosmetics firm in which distributors could sell other distributorships for commissions. L|B@9`CwX}LKC TimesMachine is an exclusive benefit for home delivery and digital subscribers. If he never quite tells us what made Glenn Turner runthat is was he a con artist or merely an overeupeptic free enterpriser?no one else knew either, including perhaps Turner. And as Turner understood, making lots of money will get you almost anything, including an invitation to lecture at the Harvard Business School. 0000005760 00000 n
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[28], Ben Gay, a high-level instructor at Leadership Dynamics, was President of Holiday Magic in the United States. But this salesman extraordinaire in flashy suits was once all but omnipresent in American life. Koscot Interplanetary, Inc. was an Orlando, Florida based multi-level marketing cosmetic company selling mink oil-based cosmetics, owned by Glenn Wesley Turner (19342020). Under this type. 256 pp. [1] It became entangled in numerous legal difficulties and went out of business in the 1970s.[2]. : A Case Study of Pyramid Sales Plan Regulation", "Glenn Turner, Empire Toppled, Trying Again to Sell Motivation", "Glenn Turner -- Out Of Luck; Fraud Sentencing May Be His Day Of Reckoning", "Koscot Cosmetics Accused Of Illegal Business Actions", "Koscot and Turner Cited in Complaint Filed by the S.E.C. 0000037159 00000 n
The judge refused and the men were led away to jail by deputy sheriffs after they gave their wallets, watches and jewelry to friends in the courtroom. But his empire collapsed after state and federal investigators accused him of operating pyramid schemes that bilked thousands of investors. Some "schemes" are specifically developed to sidestep Pyramid Scheme legislation by offering a "product" or "service". Senate. 0000001791 00000 n
that our program was a crime," he said. 0000007360 00000 n
2/10/75, p. 38) and Bestline . The two men told Dougherty before sentencing that they never intended to break the law. Koscot was founded in 1967. Last month Turner, who turned 53 on Wednesday, and Rector, 57, were convicted on one count of conspiracy, nine counts of fraud, and nine counts of running an illegal pyramid sales scheme. v. Robert W. Warren et al. It's easy and secure. [1], Pyramid schemes being illegal, Koscot became involved in substantial litigation from government agencies and Koscot's customers. The Dream, a podcast about multi-level marketing, discussed Holiday Magic and William Penn Patrick. He seems to have been equal parts P. T. Barnum, Horatio Alger, snake oil salesman and evangelist. 0000003297 00000 n
He then started two multi-level marketing companies, Koscot Interplanetary, selling cosmetics, and Dare to Be Great, selling motivational and self-improvement courses.[30]. But as Turners saga shows, theres a dark side baked into the fake it mentality: the fakers who attempt to win success through fraud, then never make good on their promises. They would peddle mink oil makeup and his Dare to Be Great motivational tapes, and collect more money by recruiting others and taking a percentage on their sales. Charges were then dropped against Bailey. He subsequently bought exclusive rights for Middle East distribution of Holiday Magic cosmetics and formed his own company, Beauty Magic, in Beirut, Lebanon. 0000004119 00000 n
SAN DIEGOGlenn Arcaro of Los Angeles pleaded guilty today in federal court for his participation in a massive conspiracy involving BitConnect, a cryptocurrency investment scheme, which defrauded investors from the United States and abroad of over $2 billion. Pyramid Schemes Versus Ponzi Schemes The labels Ponzi scheme and pyramid scheme are often used interchangeably to describe specific forms of investment fraud where sustainability depends on the influx of new "investors" to the scheme. 0000031956 00000 n
Turner and his best friend, Edward G. Rector, were each sentenced to seven years in state prison. [1] In 1971, the Federal Trade Commission filed a lawsuit against Koscot, charging restraint of trade. 6, 19, 24., Library of Congress. [5] Though he claimed Leadership Dynamics was a separate company, "..in no way related to Holiday Magic, Inc.", Gene Church pointed out many inconsistencies in this statement, in his book The Pit: A Group Encounter Defiled. The company called Zolene was about to go out of business. 0000003018 00000 n
The government says Turner owes tens of millions of dollars in taxes and judgments, which have hopelessly tangled the ownership of his partially completed castle on a lake in south Seminole County. Prosecutors said Rector and Turner also failed to warn investors that Challenge had been sued and was facing large judgments. [11] 1974 hearings before the Congressional Oversight panel of the Federal Trade Commission described Holiday Magic as a "Multi-level marketer of cosmetics", that used an "unfair and deceptive pyramid distribution scheme". 0000001791 00000 n
Although Turner did eventually get some cosmetics on the market, the pyramid idea was always at the heart of his operation, accounting for $75 million of its total $115 million in sales; and he started a second company, merchandising a howtobeasuccess course called Dare to Be Great on the same principle. One bought a cosmetics distributorship for $4,500 and became entitled to sell distributorships to others, pocketing a fat commission. In my business, theres just no faking it, Stewart said. Self-help culture took that to ludicrous places: Whatever the mind can conceive and believe, it can achieve, claimed wealth guru Napoleon Hill in Think and Grow Rich.. [2][vague] The organization was dissolved in 1974, subsequent to the death of Patrick in 1973. Well, it was never really worth all that, and when blizzard of Federal and state charges of fraud, securities irregularity and other actions drove him nearly into bankruptcy, he ended up selling one of his companies for $15,000. 0000032500 00000 n
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Lotstein said he doubted the money would ever be collected. 0000001769 00000 n
Corbins office won a civil case against Turner over Challenge in 1983, ordering him to pay $1.5 million in restitution and $1 million in penalties. Turner, Rechtor and a third man, Alan K. Oaks, were accused of defrauding Arizona residents who were promised incomes of $1,000 to $3,000 a month if they invested $5,000 to become sales people for Challenge Inc. Investors were subjected to highly emotional sales and promotion techniques in a process described by company insiders as jacking up prospects, Assistant Attorney General R. Jeffrey Woodburn said during the trial. United States House of Representatives. "Franchising in Hard Times: Hearing Before the Committee on Small Business, House of Representatives. As Mr, Maxa notes, Americans have always had a weakness for successful rogues. Mr. Turner and Mr. Rechtor, who also received seven years, were. 124., July 6, 1977. 84 F.T.C. However, the focus of the company was more about selling distributorships than cosmetics. By Rudy ???trated. 235 0 obj DARE TO BE GREAT. United States Senate election in Florida, 1974, "Meet the con man who sold America on 'fake it till you make it', "Dare to be Great, Inc! Holiday Magic was a multi-level marketing organization, founded in 1964, by William Penn Patrick (19301973) in the United States. I have often wondered if Amway distributors borrowed this terminology from Turners group, or was it Turner who confiscated these words and phrases from some Amway distributors? Kerns wrote. 0000004799 00000 n
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In the lawsuit, Avon Products' claimed that "Holiday Magic employees distributed leaflets accusing Avon of goon squads, paying off The District attorney's office.."[7], In June 1973, the United States Securities and Exchange Commission filed a lawsuit against Holiday Magic,[8] charging Patrick with "bilking some 80,000 people out of more than $250 million through his Holiday Magic cosmetics and soap empire. We dont trust the government, media or big business. [3], The company was termed as part of the "big three" scams, in a 1974 United States Senate hearing before the Consumers of the Committee on Commerce that dealt with pyramid sales. Mr. Maxa, Washington Post reporter, describes this ripe chapter in the annals of Boobus Americanus with clarity and an eye for the juicy detail. But it draws on older strains in American life, marrying psychological concepts on how to change human behavior with the positive-thinking self-help culture that might as well be Americas unofficial state religion. 0000007782 00000 n
Lotstein said 202 Arizona residents participated in the program. [28] The Mind Dynamics course was described as providing "a means of achieving personal success through the conscious use of the subconscious mind". One representative pyramid venture, Dare to be Great, Inc., is de-scribed in SEC v. Glenn W Turner Enterprises, Inc. 8 . There, it appeared as a way for people in recovery to project themselves forward into a more sober future. Dougherty said he had received "hundreds" of letters in support of Turner. The con artist became a business model, says Micki McGee, author of Self-Help, Inc. Its only in a market-worshiping economy that you can say defrauding people in the interest of profit would somehow be okay.. But what he is actually selling, he . . The Arizona case marked the first felony conviction for Turner, who built a fortune around his Orlando-based pyramid sales 20 years ago. PHOENIX, ARIZ. Glenn W. Turner, a farmboy who built and lost a multimillion-dollar financial empire with his pyramid sales schemes, lost his freedom Thursday. Turner's long gone from the 1. <>stream
"[7], According to one report target of prosecutors "in more than 30 states" targeted him. But that came later. Warren., 497 F.2d 687., C.A.Wis. By the spring of 1969, Turner was living in a large home on Lake Maitland near Orlando Florida, and "had eight Cadillacs and a Rolls-Royce, three Learjets and a closetful of tailor-made suits and alligator shoes". After more than a decade of court cases, Turner was convicted in 1987 for running a Ponzi scheme. In 2006 he published a book (To Beirut and Back - An American in the Middle East) dealing, in part, with his experiences. 0000006933 00000 n
what would happen when these distributorships reached the saturation point, when there was no one left to buy a distributorship, and so many people selling cosmetics that it was impossible to recover the large investment from the small cosmetics commissions? 0000023584 00000 n
Lets fix that. 0000006496 00000 n
[28] Holiday Magic distributors were invited, though not required, to attend the Leadership Dynamics Institute self-improvement sessions at a cost of $1000 each. In a fitting finale, Turner, stopped for good and all, is saved by a showy evangelist from New Orleans. But what made him "really rich" was reportedly Koscot Interplanetary[6] (Koscot stood for "Kosmetics for the Communities of Tomorrow"). No surprise, trust is cratering. Glenn W. Turner, who was frequently described himself as a harelipped sharecropper's son (leaving some doubt as to which of them was afflicted), built an ephemeral fortune on a pyramid selling scheme in the late 1960's and early 70's. Anyone can read what you share. This is a digitized version of an article from The Timess print archive, before the start of online publication in 1996. ) in the 1970s. [ 2 ] you have to do is it... Organization, founded in 1964, by William Penn Patrick ( 19301973 ) in the 1970s. 2! 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