0000001036 00000 n A Maricopa County Superior Court jury convicted Turner and Rector Tuesday on charges that they promoted a pyramid scheme, similar to chain letters, with their motivational company Challenge. 0000004119 00000 n Charges were then dropped against Bailey. [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. %PDF-1.7 % A few of their supporters cried as the sentences were read. Prosecutors said Challenge officials misled investors by telling them they would not have to put up their own money. What does it mean for a nation to valorize faking it as a means to an end and is there any way for Americans to turn back? 0000003839 00000 n 0000023584 00000 n 748 - IN THE MATTER OF HOLIDAY MAGIC, INC., ET AL. Turner himself offers one cautionary tale. Turner and his best friend, Edward G. Rector, were each sentenced to seven years in state prison. 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. Some "schemes" are specifically developed to sidestep Pyramid Scheme legislation by offering a "product" or "service". (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. 235 37 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. Subcommittee on Consumer Affairs. 0000004278 00000 n 0000010114 00000 n 5 OF THE FEDERAL TRADE COMMISSION ACT AND SEC. In re HOLIDAY MAGIC SECURITIES AND ANTITRUST LITIGATION., James J. 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. To preserve these articles as they originally appeared, The Times does not alter, edit or update them. [5][29], William Penn Patrick bought Mind Dynamics in 1970. of plan, which will be referred to as the Glenn Turner or multi-level distributorship scheme, the promoters offer to the public a series of contracts called "Adventures." Turner, 57, served nearly two-thirds of a seven-year term in Arizona for fleecing investors in a scheme for distributing motivational tapes. 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). Cryptocurrency arrived, basically a fake it till you make it form of money. Today, the phrase is also a way to push back on the feelings of self-doubt we call impostor syndrome, or to put forward an advantageous personal or professional confidence we might not entirely feel. 0000002742 00000 n [1] To form the pyramids of success, many directors, larger numbers of supervisors, salespeople and still more customers were needed. [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. Bids on the Castle property will be advertised over the next few weeks to notify any other bidders of the pending sale. By Rudy Maxa. A technicality of the law is what got me. By the time he died in 2020, it took more than a year for a newspaper reporter to stumble across his Legacy.com obituary and make note of his death. 0000003563 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.). ", United States Congress. If anybody was hurt by our program or suffered because of it, I am sure sorry, Rechtor said. [16] Katz's Everybody's Business: An Almanac also referred to Holiday Magic as a "pyramid sales organization". 0000003018 00000 n "[7] Turner, attorney F. Lee Bailey, and eight others were also indicted by a federal grand jury on conspiracy and mail fraud charges. Anyone can read what you share. In SEC v. Glenn W. Turner Enterprises, Inc., 474 F.2d 476, 482 (9th Cir. Turner, who was pale and appeared tired, and Rector, his former bodyguard, had no visible reaction to the sentences. "[9], The company was investigated by the Federal Trade Commission,[4][10] and in June 1973 the company was found guilty of deceptive trade practices. Koscot and Dare to be Great grew rapidly and Turner became famous. The $5,000 investment paid for motivational seminars and tapes, but the indictment said the real business of the pyramid operation was to induce more people to invest money to become salespeople who, in turn, were expected to recruit others. If it can happen to Charles Colson, folks, you gotta believe. 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. 0000032500 00000 n <> Warren., 497 F.2d 687., C.A.Wis. 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. [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. United States House of Representatives. 0000006933 00000 n <> Targets for citations in Chain Letter Evolution. Some of the most famous pyramid schemes in U.S. history. what would happen when these distributorships reached the saturation point, when there was no one left to buy a distributorship, and so many people selling cosmetics that it was impossible to recover the large investment from the small cosmetics commissions? Thus one gets sentences such as Meanwhile, in a downtown Frankfurt prison, thirtyeightyearold Turner astounded a U.S. State Department official who visited his cell to explain that the British had requested his arrest on possible charges of fraud in England. Fine time to find out Turner's age. Our intent was to help people. DARE TO BE GREAT. Ward, et al. [28], Ben Gay, a high-level instructor at Leadership Dynamics, was President of Holiday Magic in the United States. The main portion of the building is wide and round, while the top features a design that is fort-like in nature. Lawyers for Turner and Rector asked Dougherty to let their clients remain free while they appealed their convictions. Since many of them were enmeshed as much by greed as by hope, one's sympathy is tempered. Participants could pay $2,000 to be a supervisor or $5,400 to be a director. Even as Turner attracted increasingly negative attention in 1972, he was arrested on 86 counts of violating securities laws the phrase gained popularity in a more earnest context within Alcoholics Anonymous. The unfinished castle, its boathouse, stables and surrounding 79 acres will be sold to the highest bidder after a federal court hearing April 26, according to court documents. "It is hard for me to believe . 0000003297 00000 n 0000005760 00000 n "The Role of Small Business in Franchising, Hearings Before the Subcommittee on Minority Small Business. There, it appeared as a way for people in recovery to project themselves forward into a more sober future. And we need to be less credulous and stop falling for the next shiny thing. Turner and his best. It's easy and secure. He said neither man would be eligible for release from prison before serving at least two-thirds of the sentence. 256 pages. 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. https://www.nytimes.com/1977/02/20/archives/dare-to-be-great-a-sincere-con-man.html. But Dougherty denied bond and ordered both men to begin serving their sentences immediately. : A Case Study of Pyramid Sales Plan Regulation", "Glenn Turner, Empire Toppled, Trying Again to Sell Motivation", "Glenn Turner -- Out Of Luck; Fraud Sentencing May Be His Day Of Reckoning", "Koscot Cosmetics Accused Of Illegal Business Actions", "Koscot and Turner Cited in Complaint Filed by the S.E.C. 0000037334 00000 n 0000002472 00000 n A group of a half-dozen former Challenge participants, who would not give their names, said after the sentencing that Turner and Rector did nothing wrong. I have remorse for these people that did not benefit by what we set out to do. Koscot Interplanetary. 0000031956 00000 n New York: William Morrow & Co. $8.95. 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. [26] Faltinsky described Holiday Magic as "..the largest pyramid scam of all time.."[27], In 1967, William Penn Patrick wrote a booklet, entitled Happiness and Success through Principle, and founded Leadership Dynamics based on those principles. . DeMuro, RG. Turner, the son of a sharecropper, told people they could all be rich and successful like him if, that is, they made an investment in his multi-level marketing company. 0 The guy at the top could make millions. 0000005760 00000 n 0000031782 00000 n . startxref Within a few years Turner's enterprises had made an estimated $300 million. endstream endobj 166 0 obj <>stream 0000004799 00000 n He then started two multi-level marketing companies, Koscot Interplanetary, selling cosmetics, and Dare to Be Great, selling motivational and self-improvement courses.[30]. Turner and Rechtor, who also received seven years, were convicted in July of 19 counts of conspiracy, fraud and promoting a pyramid scheme. 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. 0000023769 00000 n 0000041306 00000 n [1], Pyramid schemes being illegal, Koscot became involved in substantial litigation from government agencies and Koscot's customers. Before the IRS gets its share, Seminole County has the right to collect $16,900 in unpaid property taxes for 1987, said county Tax Collector G. Troy Ray. This page was last edited on 18 February 2023, at 23:43. One of them was Bob Hattaway, a former state legislator from Altamonte Springs who came to Arizona to testify for Turner. In a fitting finale, Turner, stopped for good and all, is saved by a showy evangelist from New Orleans. "They conspired to get Mr. Turner," said another woman. 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 Summary of this case from Great Western Bank & Trust v . "[7], According to one report target of prosecutors "in more than 30 states" targeted him. 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.". Lotstein acknowledged that not all of the Challenge "victims" were pleased that Turner was prosecuted. [25] The Office of the State Attorney General in Maine, United States cites In re Holiday Magic, Inc., 84 F.T.C. [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. [11] 1974 hearings before the Congressional Oversight panel of the Federal Trade Commission described Holiday Magic as a "Multi-level marketer of cosmetics", that used an "unfair and deceptive pyramid distribution scheme". The book has its lighter moments. [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. Koscot Interplanetary, Inc. was an Orlando, Florida based multi-level marketing cosmetic company selling mink oil-based cosmetics, owned by Glenn Wesley Turner (19342020). 0000003018 00000 n 0000004799 00000 n 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. In 1964, after a bankruptcy and several business failures, Patrick (age 33) was walking by a garage in San Rafael, California, and noted that fruit-scented cosmetics were being sold. 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. 0000031956 00000 n It is apparent from this Court's findings of fact that the defendants are promoting a type of scheme commonly known as a pyramid operation. PHOENIX, ARIZ. Glenn W. Turner, a farmboy who built and lost a multimillion-dollar financial empire with his pyramid sales schemes, lost his freedom Thursday. hb```e`` /`"\}!5|Z1O(s@Tu4t5UL- M-\\mm||=C#cbC"R32S Anyone can read what you share. Morrow. Pyramid Schemes Versus Ponzi Schemes The labels Ponzi scheme and pyramid scheme are often used interchangeably to describe specific forms of investment fraud where sustainability depends on the influx of new "investors" to the scheme. [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. [17] Turner described it as one of the first "pyramid marketing" companies in America. For more information, visit the listing at bit.ly/2mgnmna. That Turner was prosecuted Great grew rapidly and Turner became famous on Minority Small Business victims '' were pleased Turner... 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