", United States Congress. Koscot Interplanetary. The Arizona case marked the first felony conviction for Turner, who built a fortune around his Orlando-based pyramid sales 20 years ago. He subsequently bought exclusive rights for Middle East distribution of Holiday Magic cosmetics and formed his own company, Beauty Magic, in Beirut, Lebanon. 1. That spirit is everywhere. Yes, Mencken would have loved it. "Summary of Testimony and Findings and Conclusions Resulting from Hearings in New York on Drug Law. [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. New York: William Morrow & Co. $8.95. A technicality of the law is what got me., But Barnett Lotstein, an assistant state attorney general who helped prosecute the case, said the sentences satisfied the interest of justice.. "Pyramid Sales: Hearing Before the Subcommittee for Consumers of the Committee on Commerce, United States Congress", 1974, United States Congress, Pp. An interesting man, Glenn Turner, and Rudy Maxa, a Washington Post reporter, has an interesting problemwhat do you do with a con man who doesn't know he's a con man? Patrick bought all of the cosmetics supplies for $16,250, and founded Holiday Magic, Inc. After the purchase, Patrick began selling distributorships in his new company. 0000037159 00000 n Even then, he never stopped explaining. Under this type. ". Turner himself offers one cautionary tale. High by today's standards but even more powerful based on the times. A lot of books have been written about Mr. Turner and today weve put the final period in the final chapter of the saga of Glenn Turner, Lotstein said. Participants could pay $2,000 to be a supervisor or $5,400 to be a director. During the eight-week trial, however, two former top Turner aides testified that Challenge officials knew their operation was illegal. As a subscriber, you have 10 gift articles to give each month. 5616. hb```e`` /`"\}!5|Z1O(s@Tu4t5UL- M-\\mm||=C#cbC"R32S Abe F. March held several executive positions for Holiday Magic and parent company U.S. Universal; Regional Vice President, Canada (19711972), Vice President, Greece (19721973) and Managing Director for Sta-Power, Germany (1973). Turner and his best friend, Edward G. Rector, were each sentenced to seven years in state prison. [2][vague] The organization was dissolved in 1974, subsequent to the death of Patrick in 1973. Our intent was to help people. ={w5d[#"zM#h:.d\r,&4* 76I\@yH'H}T4idJq$nVsL(sXk TN4%8k;|PqK+I:p*K"&Z{Z;o;}X8z}r%. House Permanent Select Committee on Small Business., 1973, P. 127, 137, 157, 203. torture involving a mouse that was supposed to eat a recalcitrant witness's heart (Good Lord! He was featured in an 11-page article in Life magazine in 1971,[8] and was reportedly worth $300 million at the time. The distributors could make thousands. The state officer who conducted Turner's investigation noted, "Mr. Turner has demonstrated to this officer an uncanny ability to confuse issues and extend compliments.". [1] To form the pyramids of success, many directors, larger numbers of supervisors, salespeople and still more customers were needed. [9] "The end began in October 1969, when 14 Koscot distributors in Tennessee, Kentucky and Indiana sued Turner for failing to pay promised dividends. startxref "Equal Credit Opportunity Act Amendments and Consumer Leasing Act-1975., Hearings, United States Congress. Mr. Turner and Mr. Rechtor, who also received seven years, were. GLENN W. TURNER ENTERPRISES, INC., a Florida corporation, et al., Defendants. By the time one arrives at the scene with the Washington lawyers who helped keep Dita Beard under wraps and the description of an old O.S.S. (Free Speech issue - dismissed), Juice Plus AKA National Safety Associates, European Grouping of Marketing Professionals, https://en.wikipedia.org/w/index.php?title=Holiday_Magic&oldid=1140202664, Companies based in San Rafael, California, Short description is different from Wikidata, All Wikipedia articles needing clarification, Wikipedia articles needing clarification from March 2009, Creative Commons Attribution-ShareAlike License 3.0, Holiday Magic, Inc. v. [10] The FTC's decision on Koscot set a precedent for defining if a company is engaging in illegal pyramiding. [7] As one news story put it: .mw-parser-output .templatequote{overflow:hidden;margin:1em 0;padding:0 40px}.mw-parser-output .templatequote .templatequotecite{line-height:1.5em;text-align:left;padding-left:1.6em;margin-top:0}, Think about it: One person could sell 10 distributorships, and each of the 10 could sell 10 more, and so on. But his empire collapsed after state and federal investigators accused him of operating pyramid schemes that bilked thousands of investors. [12] The indictment said that Bailey had appeared in a film made for Turner's organization and had appeared with Turner at several rallies. However from a technical perspective, there are differences in the way the two types of schemes operate. "They have for years.". The castle and boathouse have been vacant for several years, and the castle has been used only for tours by the public for charitable events. To preserve these articles as they originally appeared, The Times does not alter, edit or update them. 256 pages. Some of the most famous pyramid schemes in U.S. history. A list of over 350 print sources on paper chain letters and pyramid schemes. He seems to have been equal parts P. T. Barnum, Horatio Alger, snake oil salesman and evangelist. [7] Disillusioned recruits testified against Turner or his companies, and one judge cited the phrase ('fake it until you make it') as evidence of malfeasance. 0000003839 00000 n 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. 0000001791 00000 n In 1967 Turner borrowed $5,000 to start his Koscot Interplanetary Inc., a cosmetics firm in which distributors could sell other distributorships for commissions. 0000002742 00000 n [12] Holiday Magic was also labeled a "pyramid scheme" and a "multi-level distributorship" by the United States Bureau of Domestic Commerce, in their 1976 published book: Crimes Against Business: A Management Perspective. It all carne tumbling down eventually. 124., July 6, 1977. "[23] One of the Holiday Magic Inc. cases was also cited by The University of Chicago Law Review[24] and the Columbia Law Review. 0000001769 00000 n When a federal judge lumped together 1,000 of those lawsuits into a single class-action suit seeking nearly $1 billion, Turner went bankrupt. 0000001791 00000 n But nowhere has the ethos of fake it found more fertile soil than in Silicon Valley, where the line between optimism and deceit can admittedly be a fine one. 0 [1][5] Navarro described the training as having "overtones of strict military training techniques. Turner's long gone from the 0000031956 00000 n The company had been investigated by the Market Court of Sweden,[3] United States Securities and Exchange Commission, the Federal Trade Commission, and the State of California. Targets for citations in Chain Letter Evolution. "Franchising in Hard Times: Hearing Before the Committee on Small Business, House of Representatives. Turner, imprisoned in Arizona prison for fraud, has owed the IRS millions of dollars in back taxes for more than a decade, and the agency has succeeded in foreclosure proceedings against the property in Seminole County. The main portion of the building is wide and round, while the top features a design that is fort-like in nature. [18] Clarke referred to the company as an "illegitimate" business. [5][29], William Penn Patrick bought Mind Dynamics in 1970. Citation Needed, a podcast, has an episode about William Penn Patrick (and Holiday Magic). In the end, Turner was saved by New Orleans evangelist, known as the Chaplain of Bourbon Street, who also pointed the way to fiscal salvation by introducing Turner to his own business managera former minister himself. 2(a) OF THE CLAYTON ACT Docket 8834 (1974), MLM Law - Lawyer Grimes & Reese PLLC - Attorney Specializing in Multilevel Marketing - Marshall v. Holiday Magic, Inc. (1977) 550 F.2d 1173, Door to Door Selling, Pyramid Selling, Multilevel Marketing, "L.A. Con Artist Behind Alleged Electricity Scam: Pyramid scheme linked to coming deregulation", "First Amendment Protection for Commercial Advertising: The New Constitutional Doctrine", "The Chaos of Multilevel Marketing and Pyramid Sales Laws: A Federal Remedy", In Re Koscot Interplanetary Inc., 86 F.T.C. 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.. [3] Another has him convicted in 1987 along with Edward Rector, on charges of conspiracy, fraud and operating a pyramid scheme, and sentenced to seven years in prison. See the article in its original context from. Theres a difference between psyching yourself up and misrepresenting yourself, and the latter is where fake it has gone too far. 2/10/75, p. 38) and Bestline . %%EOF It is a story that will finally end Thursday in Phoenix, Arizona, where Turner, who turns 53 on Wednesday, faces a potentially long prison sentence for the fraud convictions last month that. [15] Larry Stephen Huff, another key individual in the company, served two years in a Federal Prison, for charges related to a Ponzi scam (unrelated to Holiday Magic).[21]. trailer [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. Turner and Rechtor, who also received seven years, were convicted in July of 19 counts of conspiracy, fraud and promoting a pyramid scheme. Wk. The IRS, which had a $15 million claim, has been awarded a judgment of $9.275 million, but appraisals put the value of the Turner property at $1 million to $2 million. At the meeting Turner's proteges would run to the stage in their flashy suits and fancy shoes, with $100 or even $1,000 bills pinned to their lapels. Referring to Charles Ponzi, who earlier this century put together a huge investment swindle that still bears his name, Lotstein said, "I imagine there are still people that feel that Mr. Ponzi was doing good for the world. %%EOF 84 F.T.C. <> 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. It didnt. "The first time I ever heard those words from those men was in this courtroom," Rector said. <<7C981AD2C2A8B2110A00B0784D58FC7F>]/Prev 803466>> Glenn Wesley Turner August 19, 1934 - January 8, 2020 Lake Mary, Florida Set a Reminder for the Anniversary of Glenn's Passing Forward to Family & Friends Share a Memory Print Contact Support Upgrade Death Certificates Share This Obituary Make a Memorial Donation Tributes.com partners with over 100 national charities. 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. endobj If anybody was hurt by our program or suffered because of it, I am sure sorry, Rechtor said. "They come from all over this country and abroad. This is a digitized version of an article from The Timess print archive, before the start of online publication in 1996. 0 Glenn Turner was, as he liked to tell anyone within earshot of his pitch, sharecropper's son 'and a gradeschool dropout and had a harelip (albeit corrected by surgery) who had lifted himself. The House was supposed to grow with population. [4], Patrick, a student of Alexander Everett (founder of Mind Dynamics), used Mind Dynamics techniques as well as the Silva Method in the Holiday Magic organization. Turner was a former sewing machine salesman and son of a South Carolina sharecropper and an unwed mother, born with a cleft palate and a hair lip, who dropped out in the eighth grade, did a short stint in the U.S. Air Force before successfully finishing a school for those who had dropped out of high school. "They come from preachers, lawyers, housewives, plumbers, carpenters," Dougherty said. [28], CEO and President Roland R. Nocera pleaded guilty to securities fraud, in the case United States v. Nocera, et al. 0000009459 00000 n 0000003297 00000 n But the real bait was the right to sell the righttosell to other suckers on the principle of a chain letter. . 0000003839 00000 n On this Wikipedia the language links are at the top of the page across from the article title. And the Wells Fargo C-suite was looking the other way as employees, desperate to meet unrealistic sales quotas, opened millions of fake bank and credit card accounts. Dougherty said he had received "hundreds" of letters in support of Turner. The promised El Dorado, however, was reserved for those who put up the requisite amount for becoming distributors; this gave them the right to sell distributorships to others, retaining a healthy percentage of the fee. The election of Ronald Reagan marked the beginning of an era of worshiping wealth, one in which more and more people came to believe that anything that made money was by definition a success. Attorneys for the two said their convictions would be appealed and asked that they be freed on bond until their appeals are heard. Koscot Interplanetary, Inc. was an Orlando, Florida based multi-level marketing cosmetic company selling mink oil-based cosmetics, owned by Glenn Wesley Turner (19342020). Generally, the product or service is of poor quality, overpriced, or has no purpose other than as a ploy to give the company the appearance of legality. [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. they indicted me on aiding and abetting running a pyramid scheme. Since his victims were usually the little people, the guys who are always getting it in the neck from the system anyway, it was a matter of hitting cripples. Two dwarfs would hop out and unroll a red carpet. As he was led off to jail, he told reporters: The good that I have done outweighs the bad. 0000004799 00000 n 0000006933 00000 n 271 0 obj 0000000016 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. [19] Tobias poked fun at the pyramid nature of the organization, in his book The Only Investment Guide You'll Ever Need, telling readers to be wary of "..Holiday Magic - where the big money to be made was not in selling cosmetics, but in selling franchises to sell franchises (to sell franchises).."[20] Howe wrote in the San Francisco Chronicle that Holiday Magic was "..one of the largest of all pyramid schemes.."[21], Holiday Magic is used as an example in graduate level criminal justice coursework to analyze the nature of corporate scams. He first pushed cosmetics and later a motivation course called Dare to Be Great. the Glenn Turner modification is a good one. uOf2v]IM{7\~CPWb=sVX\IQ2ec )^y&wM9t>5YO! Turner, the son of a South Carolina sharecropper and a self-styled country boy, rose to fame in the early 1970s through inspirational speeches that promised great wealth if people bought distributorships in his operations. L|B@9`CwX}LKC In SEC v. Glenn W. 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