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regard, petitioners compiled an extensive list of family members,
friends, and acquaintances that they used to identify and recruit
potential downline Amway distributors. Typically, petitioners
made contact with these individuals either by telephone or by
traveling to wherever these individuals lived to meet with them.
Nothing in the record suggests that petitioners made any effort
to develop a profile of a successful downline distributor on
which basis they would recruit; instead, petitioners recruited
family, friends, and acquaintances.
Petitioners’ attempts to recruit downline distributors also
consisted of describing the Amway business plan to friends and
acquaintances at gatherings in petitioners’ home or at
restaurants where food and beverages were routinely consumed.
Petitioners recruited 26 downline distributors in 1996, 37 in
1997, and 12 in 1998. The record does not disclose how many, if
any, of these downline distributors were in a familial or
preexisting social relationship with petitioners.
The relationship between petitioners and their downline
distributors was, at best, informal. There were no contracts or
minimum sales agreements. Downline distributors were free to
leave petitioners’ distribution network at will, and, if they
desired, could even join another Amway distributorship under a
different upline distributor. Petitioners were not assigned a
sales territory, and, like their downline distributors, they
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Last modified: May 25, 2011