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The JewelWay Craze

By Rabbi Eli Teitelbaum

One of the most devastating MLM pyramid schemes to hit the community during the 1990’s was a company called JewelWay. All one need do was invest $1,000 for which you received some “expensive” jewelry in return. You supposedly would strike it rich by seducing three of your friends to also become distributors for JewelWay. These people you suckered in were called your “down-line.” For each sale they made, you too received a handsome commission in the form of some beautiful jewelry that you choose from their catalogue. When the people under you (your down-line) would get others to join, you would also receive a commission in the form of jewelry. It sounded like a great deal! They had a super group of salesman that made lots of big meetings at which they made a great presentation hyping up the people to join. The JewelWay craze soon spread like wildfire in the Jewish community.  Everybody began to join. Even those that didn’t have any money began borrowing from friends, sure that they would soon be able to repay it from the great riches they would soon make.

When I realized what was happening and that thousands of people were living with “Alice in Wonderland” and were about to lose lots of money, I immediately started warning people to stay away from this big hot air balloon since it would certainly burst and leave thousands devastated and distraught. I soon realized that there were many that refused to listen to reason or logic. I was talking to people who were totally brainwashed by the riches and jewels they dazzled in front of their eyes and that JewelWay was like an obsession or compulsion. Nothing I said seemed to enter their brain. I warned them that their dream couldn’t go on forever and eventually this scheme would topple and collapse as do all such type of pyramid scams and that thousands would lose their investment. Yet, for the most part, my words fell on deaf ears. Once a person was hooked on JewelWay, all my warnings were in vain. Everyone knew better, and I was just considered a killjoy by trying to stop Jews from earning an honest and easy living. An article entitled “Not all that Glitters is Gold” appeared in the Country Yossi magazine warning people to stay away. Those that were still not brainwashed on the idea began to think twice and the Twin Towers of deceit and fraud began to shake. 

I then began getting calls from some of JewelWay’s sales representatives since I was obviously hurting their “business sales.” They sent their top salesmen to visit me and to try to convince me that I was wrong and that I should retract my “foolish” stand. When I refused to back down, I was put on the company’s black list and they sent out a letter to all their salespeople and distributors to totally ignore anything I had to say since I didn’t have the faintest idea what I was talking about and didn’t understand how their great “get rich quick” scam worked. I even began getting all sorts of threats on the telephone warning me that I’d better stop if I knew what was good for me. Some of these people were even stupid enough not to shut their caller ID. When I saw their telephone numbers, I called them back and told them that people in glass houses shouldn’t throw stones.

It didn’t take long and soon the inevitable happened. The FTC (Federal Trade Commission) seemed to get wind of what was happening and closed them down as an illegal pyramid scheme. Thousands of people lost their money. Some people who already had some jewelry soon realized that it wasn’t worth anything close to what they had made it out to be. The jewelry probably was worth less than $50.

I tell this story not to say “I told you so” but only because this is certainly not the end of the story since every few years another one of these MLM schemes opens up under another name and with a different twist entrapping thousands of the unwary into their net. They are like a snake that sheds its skin every year, taking on a new look The first thing they will tell you is that we are not a pyramid scheme and that they’re perfectly legal. Recent bankruptcies such as Enron and others should get people to realize that “What they say is not always what you get.” There is no hidden treasure at the end of a rainbow! If it sounds too good to be true then better beware! You’re probably being sold a barrel full of smelly old fish and not oil!

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