. 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. 0000010114 00000 n Wk. 0000008424 00000 n . Turner and his best. This book may be edifying but, having long believed, considerable evidence to the contrary notwithstanding, that The People Is Not Dumb, I found it depressing. 0000003297 00000 n During the eight-week trial, however, two former top Turner aides testified that Challenge officials knew their operation was illegal. Glenn W. Turner worked briefly for Holiday Magic in 1966. Rector said the men -- Douglas Beekman of Apopka and Richard Mailman of Altamonte Springs -- never voiced such a concern to him. Turner packaged this dubious enterprise with a religious fervor that would make Billy Sunday look like the Archbishop of Canterbury. 0000009459 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. In 1967 Turner borrowed $5,000 to start his Koscot Interplanetary Inc., a cosmetics firm in which distributors could sell other distributorships for commissions. In 1975, Turner pleaded guilty to a single charge of violating securities laws and was given probation. "Franchising in Hard Times: Hearing Before the Committee on Small Business, House of Representatives. 0000006135 00000 n [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. 235 37 Martha Stewart sparked headlines in 2005 when she fired a contestant on The Apprentice who embraced the phrase. 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. 0000006135 00000 n Occasionally the digitization process introduces transcription errors or other problems; we are continuing to work to improve these archived versions. 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. ", United States Congress, Select Committee on Narcotics Abuse and Control, 1977, P.53. 0000032500 00000 n startxref United States House of Representatives. Oaks pleaded guilty last year to one felony count of operating an illegal pyramid scheme and agreed to testify against Turner and Rechtor. Although Turner was never convicted of a criminal charge, he received probation in a mailfraud case after arranging with the prosecution to plead no contest to a lesser charge. But when the claim has little to no basis in reality, it will almost certainly lead to failure and, as Turner discovered, to oblivion. 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. 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. Glenn W. Turner, 53 years old, was sentenced along with Edward G. Rechtor by Superior Court Judge Bernard J. Dougherty. they indicted me on aiding and abetting running a pyramid scheme. 271 0 obj He seems to have been equal parts P. T. Barnum, Horatio Alger, snake oil salesman and evangelist. 58.95. "They come from preachers, lawyers, housewives, plumbers, carpenters," Dougherty said. To preserve these articles as they originally appeared, The Times does not alter, edit or update them. [17] Turner described it as one of the first "pyramid marketing" companies in America. Glenn Turner's Winter Park castle currently is for sale for $1.8 million. https://www.nytimes.com/1977/02/20/archives/dare-to-be-great-a-sincere-con-man.html. C-74-1067-LHB., No. 0000004278 00000 n Turner, who was pale and appeared tired, and Rector, his former bodyguard, had no visible reaction to the sentences. It didnt. @D[cnS: lRORRXtkLrr)==mFdQMmnM'tv6KM;J_O3 +F:C+4i[k}d 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. United States District Court, D. Oregon. 0000005276 00000 n 0000002472 00000 n [13], The company was cited by the United States House of Representatives in a 1975 hearing[14] as an example of consumer fraud, again in 1977,[15] and in 1991, in a hearing by the House Committee on Small Business. Turner and a partner, Edward Rector, 57, were sentenced to seven years in prison in Arizona in August on charges of operating a pyramid scheme there and defrauding investors through a self-motivational company called Challenge Inc. Connect with the definitive source for global and local news. . 0000037159 00000 n (As for The Apprentices more famous host Donald Trump, a nepo baby who cosplayed a successful mogul on the show we all know how that turned out.). Occasionally the digitization process introduces transcription errors or other problems; we are continuing to work to improve these archived versions. DeMuro, RG. Lawyers for Turner and Rector asked Dougherty to let their clients remain free while they appealed their convictions. 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. Our intent was never to go out and commit a criminal act., Later, as he was leaving the courtroom in handcuffs, Turner told reporters, I think history will tell what I really was. House Committee on Small Business, 1991. 0000003018 00000 n 0000004278 00000 n 0 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. The company called Zolene was about to go out of business. 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.. But faking it in matters of money is another matter entirely. Yes, the ethos can lead to success, as long as you actually have the goods and the skills. 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. The history of fake it till you make it offers a lesson here, if we want to heed it. . Glenn W Turner, who started in Network Marketing in the late 60s and you will be blown away by the income earnings that he shares from that time. Investment of $5,000. 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. Lotstein said 202 Arizona residents participated in the program. Koscot was founded in 1967. xref [5] One report has him convicted of running a pyramid scheme in Arizona in 1985 and released after five years in prison. Dropping the creator of Dilbert is free speech at work, Ron DeSantis shows how not to run an education system, False Profits: Seeking Financial and Spiritual Deliverance in Multi-Level Marketing and Pyramid Schemes. . ", "Opinion This all-but-forgotten con man sold America on 'fake it till you make it', Juice Plus AKA National Safety Associates, European Grouping of Marketing Professionals, https://en.wikipedia.org/w/index.php?title=Koscot_Interplanetary&oldid=1142208959, Creative Commons Attribution-ShareAlike License 3.0, This page was last edited on 1 March 2023, at 02:56. In the Arizona case, Turner represented himself -- a stark change from the days in the early '70s when renowned defense attorney F. Lee Bailey represented him in his Koscot dealings. %PDF-1.6 % [28] The Mind Dynamics course was described as providing "a means of achieving personal success through the conscious use of the subconscious mind". 0000002201 00000 n [6], In February 1973, Holiday Magic was sued for calumny by Avon Products. [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. No surprise, trust is cratering. WASHINGTON, May 17 The Securities and Exchange Commission asked a Federal District Court today to halt the sale of Glenn W. Turner's pyramid franchising scheme on the ground that it is. By Rudy ???trated. [1], Pyramid schemes being illegal, Koscot became involved in substantial litigation from government agencies and Koscot's customers. Dougherty also ordered Turner and Rector to pay $44,000 each in fines to be distributed to victims. TimesMachine is an exclusive benefit for home delivery and digital subscribers. Two years later he founded Dare to be Great, a motivational program similar to the later Challenge. [1] To form the pyramids of success, many directors, larger numbers of supervisors, salespeople and still more customers were needed. PHOENIX, Ariz. (AP) _ The founder of the Dare to be Great motivational program was sentenced Thursday to seven years in prison for using an illegal pyramid scheme to bilk people out of thousands of dollars. 256 pages. [7] He told reporters as he was led away to jail: The good that I have done outweighs the bad. uOf2v]IM{7\~CPWb=sVX\IQ2ec )^y&wM9t>5YO! 256 pp. Turner would emerge under a banner reading "Dare to Be Great" and vacuum up money through a pyramid marketing scheme based on selling motivational tapes containing the secret of getting rich. Bids on the Castle property will be advertised over the next few weeks to notify any other bidders of the pending sale. He then started two multi-level marketing companies, Koscot Interplanetary, selling cosmetics, and Dare to Be Great, selling motivational and self-improvement courses.[30]. The two men told Dougherty before sentencing that they never intended to break the law. [18] Clarke referred to the company as an "illegitimate" business. [1], In 1974, after almost 10 years in operation and tied to pyramid schemes and controversy, both Leadership Dynamics and Mind Dynamics ceased operations. 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. This is a good little book about an earnest con artist who ripped off the American public for $75 million. endobj Lotstein acknowledged that not all of the Challenge "victims" were pleased that Turner was prosecuted. He then started two multi-level marketing companies, Koscot Interplanetary, selling cosmetics, and Dare to Be Great, selling motivational and self-improvement courses. In SEC v. Glenn W. Turner Enterprises, Inc., 474 F.2d 476, 482 (9th Cir. USA vs Glenn W. Turner, Nash Publications, New York, 1976 Rudy Maxa . It all carne tumbling down eventually. 0000041306 00000 n According to 2019 surveys done by the Pew Research Center, almost half of us say Americans are not as reliable as in the past. 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. 0000003839 00000 n Glenn Turner, operator of Challenge, Inc., of Goldenrod, Fla., and two other Florida executives were indicted Wednesday by a grand jury on 126 counts of conspiracy, securities fraud and. [25] The Office of the State Attorney General in Maine, United States cites In re Holiday Magic, Inc., 84 F.T.C. Unsatisfied investors also filed lawsuits. As Elizabeth Holmes gives way to Sam Bankman-Fried, who gives way to George Santos, its worth pondering why our society has embraced an ethos popularized by a huckster such as Turner. When newly minted salespeople found it impossible to make a go of it, they were told to fake it until you make it, by wearing expensive clothes and waving around $100 bills to lure in others, a disillusioned Oregon recruit testified in court in 1972. The Glenn Turner court was confronted with the pyramid sales scheme of Dare to Be Great, Inc., a wholly owned subsidiary of Glenn W. Turner Enterprises, Inc. Ostensibly Dare sold through four "adven-tures" and one "plan" a motivation training course consisting of printed [1] In 1971, the Federal Trade Commission filed a lawsuit against Koscot, charging restraint of trade. "Challenge had a positive effect on all of our lives," said one woman who was crying in the hallway outside the courtroom. Just before sentencing, Rector told Dougherty that Challenge had done nothing wrong. Those in the positions of Instructor General, Trainer General, and Senior General were required to take the training. 0000031782 00000 n 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. Theres a difference between psyching yourself up and misrepresenting yourself, and the latter is where fake it has gone too far. In 1979, his fortune gone, he attempted a comeback with another motivational company called Challenge, Inc.,[6] which led to more legal difficulties. Pyramid schemes are inherently unstable and eventually must collapse. All these characters in bright red polyester doubleknits, with rhinestone flag lapel pins, dashing around the country making people hum, MMMMMMMM MONEY!. Charges were then dropped against Bailey. He first pushed cosmetics and later a motivation course called Dare to Be Great. 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. He subsequently bought exclusive rights for Middle East distribution of Holiday Magic cosmetics and formed his own company, Beauty Magic, in Beirut, Lebanon. 0000007360 00000 n "All you have to do is believe it."[7]. We dont trust the government, media or big business. But Dougherty denied bond and ordered both men to begin serving their sentences immediately. They drove new Cadillacs and wore alligator shoes. U.S. District Court documents in Orlando indicate there are dozens of other Turner creditors, but it is unlikely they will be paid from any proceeds from the Castles sale, officials said. Government needs to return to enforcing meaningful financial regulation; politicians and entrepreneurs who deceive their supporters need to face consequences. There being no provision in either law or morality for fraud without intent, it's hard to figure out what that makes Glenn Turner. 6, 19, 24., Library of Congress. [16] Katz's Everybody's Business: An Almanac also referred to Holiday Magic as a "pyramid sales organization". 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.. 0000037159 00000 n 0000023584 00000 n Some "schemes" are specifically developed to sidestep Pyramid Scheme legislation by offering a "product" or "service". Turner and his best friend, Edward G. Rector, were each sentenced to seven years in state prison. Under this type. Turner barely escaped jail in 1975 when a federal jury in Florida was unable to reach a verdict after a nine-month fraud trial. 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