Another Amway/Quixtar Distributor Lawsuit
Companies Owned by Crown Ken Stewart Sue Gooch, Childers, Foley and Woods for Undisclosed Amount
On January 14, 2002, a major lawsuit involving Amway/Quixtar Crowns and Diamonds, was filed in Greene County, MO. The list of defendants reads like a Who's Who of the Hal Gooch organization. Named, either individually or doing business through a company or corporate entity, are:
- JIMMY V. DUNN of Rogersville, MO -- Diamond
- HAROLD GOOCH, JR. of Thomasville, NC -- Double Diamond
- WILLIAM ("BILL") CHILDERS of Charlotte, NC -- Double Diamond
- THOMAS D. ("TIM") FOLEY of Tavares, FL -- Crown Ambassador
- STEVEN S. WOODS of Jensen Beach, FL -- Diamond
- PARKER E. GRABILL of Grand Rapids, MI -- Executive Diamond
- ROBERT A. BLANCHARD of East Grand Rapids, MI
- HAROLD GOOCH, JR. of Thomasville, NC -- Double Diamond
Ken Stewart, Crown, through his companies Nitro Distributing, Inc. and West Palm Convention Services, Inc. is suing AQMO (Amway/Quixtar Motivational Organization) leaders in his upline and crossline for a variety of complaints which have become all too common: running an illegal pyramid scheme, tortious interference in the Plaintiffs' businesses, breach of contract, and price fixing.
The complaint details a history of conspiracy on the part of the defendants to defraud the plaintiff of his AQMO "tools" business, and names a number of non-party co-conspirators as well.
The complaint also reaffirms that the "tools" and "functions" provide the vast majority of the income for the AQMO leaders, and that their "success" in Amway/Quixtar depends on enrolling new members who become consumers of these "tools."
"The BSMs industry has grown so large and powerful that it has become an industry in itself, separate and distinct, yet inextricably connected with Amway. The income a Diamond Amway distributor can potentially derive from the BSMs industry is vastly superior to that income that can be derived from the sale of Amway products alone. . . "
"Jimmy Dunn has represented to distributors that less than 10% of his income comes from the sale of Amway products through his organization, and over 90% comes from the BSMs business."
Stewart's complaint also reaffirms the allegations -- which have become more and more common in recent years -- that Amway/Quixtar does not enforce the rules consistently or fairly, if at all.
"However, Amway has not sought to enforce the rules governing BSMs; at least, not in any consistent or aggressive manner. Amway's more recent apparent ambivalence has made it easier for abuses within the BSMs industry to occur. The Defendants herein have taken Amway's ambivalence to manipulate the BSMs industry as hereinafter described to their own pecuniary benefit. . ."
The complaint then explains the "myths" fostered by kingpin distributors in recent years: 1) That anyone can become rich in Amway by working hard and 2) that the "tools" or "BSMs" business treats participants fairly.
"The Upline Defendants, in recent years, by and through their conduct and purported "leadership" as distributors at or near the top of the Amway pyramid, have created and fostered myths among the many lower Amway distributors. The first myth is that by working hard to build the Amway business, an Amway distributor can build his/her Amway network to a point where they can achieve the Amway dream or "riches" like those touted by the Upline Defendants. Very simply, one cannot achieve comparable "riches" by selling Amway products. It is only through the participation in the BSMs industry that ultimately can lead to the attainment of the "riches" like those of Upline Defendants. The second myth is that those engaged in the BSMs industry (Direct level and above), will be treated fairly with the BSMs rules, including the line of sponsorship and the servicing agreement rule, honored. The reality is that the Upline Defendants, as well as Defendants Foley and Woods, with the "riches" at the top of the Amway pyramid control the destiny of those below them, and they control and manipulate the BSMs business in such a way that one cannot attain these "riches" unless they so elect. And few do attain these "riches," regardless of the size of their downline."
The complaint also accuses the Defendants of operating an illegal pyramid scheme under Missouri law. Of course, one can't help but wonder how Stewart can claim the "BSMs industry" to be an illegal pyramid scheme while still demanding his cut.
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