Overview:

Robert FitzPatrick is one of the nation's foremost experts on pyramid schemes, the fastest growing type of consumer fraud in America. He is president of Pyramid Scheme Alert, a non-profit consumer watchdog group that analyzes and exposes pyramid schemes. His book, co-authored with Joyce Reynolds, False Profits, has been featured on CBS 60 Minutes and NBC Nightly News with Tom Brokaw, ABC World News with Peter Jennings, BBC Radio and Wall Street Journal. He has served as expert witness in federal and state court cases involving pyramid schemes and delivered seminar presentations to regulators from the Federal Trade Commission, State Attorney General offices and the US Postal Inspectors Office.

From his research and consumer activism, Robert FitzPatrick has seen that the pyramid scheme is much more than a classic flimflam. It has become a distinct and pervasive new value system in America with its own rules, ethics and principles.

In his presentation, "False Profits: the Growth, Acceptance and Legalization of Pyramid Schemes in America," he reveals the pyramid scheme's influence in ways that surprise and enlighten his listeners. He exposes how the values of the pyramid scheme are now permeating popular culture, reshaping mainstream business and changing community life.

The pyramid scheme value system, he explains, can be seen in the Enron debacle, the dot-com stock bubble, the exorbitant compensations of CEOs, insider trading scandals, the dispensability of employees, and the enormous expansion of consumer debt.

But, most importantly, FitzPatrick reveals how it has crept into the thinking and conduct of virtually all Americans and has changed our ethical values and views.

To demonstrate how the pyramid scheme's values and principles have insinuated into our culture, he presents his audience with several Get-Rich-Quick tests. The tests measure a person's vulnerability to being enrolled in today's most popular pyramid schemes. The measure of vulnerability depends upon the victim's acceptance of the principles that pyramid scheme perpetrators present in their solicitations. Most people are shocked to discover how much they may agree with or accept unquestioningly the reasoning and appeals of pyramid perpetrators.

That pyramid scheme fraud is becoming a fixture of daily life in America is well documented.

• In 1996, the Better Business Bureau warned that pyramid schemes "are all over the country."
• Since 1996, the Federal Trade Commission (FTC) has prosecuted more pyramid schemes than in the previous seventeen years. All of them, were companies that operated as legitimate and profitable businesses and had enrolled hundreds of thousands of Americans as independent sales reps and promoters.
• In March 1998, the Securities & Exchange Commission (SEC) filed suit against the sales company, International Heritage, Inc, calling it the largest pyramid scheme in SEC history. 150,000 Americans were involved.
• Since 1997, large-scale pyramid schemes have been regularly reported in cities across the country. Some have involved the participation of sheriff's deputies, prominent clergy, churches leaders, and people from virtually all ethnic groups and income levels.
• Since 2000, more than 25 states have issued warnings or issued indictments against women who are joining and promoting the latest ­ and largest - pyramid scheme to sweep across the country. Called "Women Empowering Women" the scam clams that it is based on the the same principles and values that are espoused on the Oprah Winfrey show.

Robert FitzPatrick's presentation is an instructive, at times ironically funny, but ultimately a powerful and important look at today's culture and economy. The audience gains practical and useful tools for discerning pyramid scheme fraud even when it is disguised as a dynamic new business, personal empowerment network, or spiritual pathway. They learn how to avoid falling prey to the ubiquitous solicitations on the Internet and the awkward invitations from friends and family for a "great opportunity."

Fitzpatrick leads the audience on a disquieting inquiry into today's' standards of ethics, social philosophy, prevailing business practices and government regulation ­ viewed through the prism of the pyramid scheme.

After examining the pyramid trend from the outside, Robert FitzPatrick takes the audience deep inside an actual pyramid scheme. He compares this tour to Dante's poetic journey into the Inferno which exposed the frauds and follies of his day. Inside the scheme, the audience can see the manipulation of treasured American values, the distortion of hopes and expectations, and the misguided quests for "success" in the American Dream.

Pyramid scheme members are observed in a kind of dream world of delusion where extraordinary wealth can be achieved just by maintaining faith and optimism and enrolling others in the folly. They believe economic salvation lies in unquestioning adherence to the scheme without ever evaluating its perverse mathematics. They accept that wealth and success are everyone person's destiny if they will learn to expect it. Success in the scheme is more than just money. It is a kind of salvation, a validation of one's worth and a reward for keeping the faith.

Inside the deluded world of the pyramid scheme, values and precepts have the deceptive look and feel of the highest and best values of America itself. In this misguided state, members are led to plunder the future, commercialize and leverage the trust of family and friends, abandon responsibility to others and to define "success" only in dollars.

Trained in Sociology and with a 20-year background as management consultant, industry analyst and trade association manager, FitzPatrick brings a keen insight and much practical experience. He explores a fascinating subject that is seldom covered in the news media except to report its sad consequences ­ layoffs, 401K's wiped out, thousands of consumer investment losses, indictments issued, hopes and dreams dashed.

Topics Covered:

1. Pyramid Nation

• The epidemic of pyramid schemes in America: Everybody's doing it.
• Crimes without Criminals: When good people break the law
• The Dot-Com Bubble: Like the game of "Old Maid"­ The one still holding cards at the end loses
• The Arthur Andersen Scandal: Foxes and Hen Houses
• Silence of the Lambs: Winners and Losers at Enron

2. Disguises of the Pyramid Scheme: Straight from the Nightly News

• Women's' Empowerment Network
• Christian Gifting Club
• Ethnic Support Group
• Multi-Level Marketing Company
• Hot new penny stock
• Early Retirement Plan

3. Why Do People Join Pyramid Schemes? No, it is not just greed.

• Profile of a Pyramid Participant: Hey, that's me you're talking about!
• Victims and Perpetrators: Who is scamming whom?
• Behind the Smiles and Optimism: The dark side of a bull market.

4. Would You Join a Pyramid Scheme?

• Visualization Exercise: Imagining Yourself Rich and Happy.
• Pyramid Proposition: Are you a winner in life or one of the losers?
• Just Friends Helping Friends: Everyone can win.
• Pathway to Wealth: Just one penny doubling every day for a month.

5. Breaking the Code of the Pyramid

• The Limits of "Unlimited" Income.
• If everyone is selling the products, who's buying them?
• Opportunity of a Lifetime: Is anyone making money at this?
• If you enroll five friends and they each enroll five of their friends and then those people each get five friends ­ and you make a little off each one down the line ­ you're set for life! How many more will the ones on the bottom need for them to be "set" like you?

6. Into the Inferno: A Journey Inside a Pyramid Scheme

• Pyramid Values: It's Timing and Positioning, not Effort, that Count. Get in early:
• Pyramid Relationships: Working your "Warm List." What are friends for?
• Pyramid Leadership: If you are so smart why aren't you rich like that guy on the stage?
• Pyramid Communication: Don't Be Negative.
• Pyramid Vision: It's your last best hope.
• Pyramid Ethics: I guess you just didn't have what it takes.

7. Knowing a Pyramid Scheme When you See One

• Expendable people
• Reversing the Trickle Down Theory: When money flows upstream
• Stock Options: Paying for today's labor with tomorrow's value: Trust me on this one!
• But, It's Legal!
• Don't expect help from the government: lotteries, lobbyists, budgets and deficits
• Tests for spotting the American Pyramid Scheme
• Applying the guidelines of the Federal Trade Commission

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