How Multi-Level Marketing Became the Perfect American Scam

"With a $5,000 loan and some gumption, young entrepreneur Glen W. Turner launched a cosmetics company, Koskot Interplanetary, Inc., in 1967. Soon it was valued at hundreds of millions of dollars. Turner, the son of a dirt-poor South Carolinian sharecropper, would then go on to create 26 more companies, including one offering motivational courses known as "Dare to Be Great." Both Koskot and Dare to Be Great were direct sales companies with a multi-level marketing (MLM) structure."

"Turner's salesforce would not only hawk his cosmetics (featuring their hallmark special ingredient, mink oil), or his motivational "Adventure Meetings." They'd also pitch to customers a very exclusive business opportunity: the chance to become salespeople themselves, a once-in-a-lifetime offer they couldn't refuse. "There's not a man or woman with normal intelligence that I can't make a millionaire if they do everything I tell them to do for five years," Turner guaranteed."

"At "frenzied" Adventure Meetings, which cost hundreds of dollars to attend, speakers emulated Turner, wearing expensive clothing and driving flashy cars, telling fanatical "stories of great riches achieved through [Turner's] operations" to wild cheers and applause. Attendees would be heavily pressured into joining the company as salespeople. Those who claimed not to have enough money for the joining fee might be told how to lie to multiple banks to get the necessary loans."

Glen W. Turner launched Koskot Interplanetary in 1967 with a $5,000 loan and later created 26 more companies, including Dare to Be Great. Both Koskot and Dare to Be Great used multi-level marketing direct-sales models. Turner's salesforce sold cosmetics and motivational meetings while recruiting customers into exclusive sales opportunities with promises of millionaire status if instructions were followed. Turner projected wealth, buying jets, cars, and a lavish Winter Park home. "Adventure Meetings" charged hundreds, featured emulators of Turner, and pressured attendees to join, including coaching some to lie to banks for loans or singling them out on private tours to force contract signings. A Ninth Circuit record recounted these tactics.

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