The American prophet making $6m a year from pyramid-selling schemes

Orrin Woodward, bestselling author of Launching A Leadership Revolution, is a firm believer in practising what he preaches. A master at whipping up crowds, he brings a messianic fervour to the faithful who pay $90 to hear him speak. Most are engaged in what is euphemistically known as "multi-level marketing" aka pyramid-selling, says Forbes. Their hopes of riches rest on a fruit-juice tonic called MonaVie, which sells for $39 a bottle. "Unload enough of this stuff on friends, recruit them to do the same, and you can be rich."

Pyramid schemes of this sort are a dime a dozen in America. But Woodward's organisation, Team (Together Everyone Achieves More), is "one step ahead of them all" not least because he doesn't have to sell a drop of MonaVie to make a killing. Team's product is motivational sales "tools" $258 sets of inspirational CDs featuring bullets from the leader on leadership ("Struggle is part of the victory", "Leaders are dealers in hope"). The message sent out to MonaVie vendors is that if they want to shift the juices faster or recruit more salespeople to their own "downline" they'd better join the Team. They could then make a tidy side profit flogging Woodward's tools to other MonaVie vendors. The operation, essentially "a pyramid within a pyramid", is a formidable machine. This year, Team reckons to make $42m, 90% of it from the MonaVie salesforce.

Not many people outside Michigan have heard of Woodward, says The Grand Rapids Press. But within the state, his "controversial" techniques have whipped up a storm. Some 60,000 people are members of the Team system and many see the 41-year-old as a kind of prophet. "I know God sent Orrin to us through the business," says one mother of five. Woodward plays on this. Alongside shots of him on his yacht, his website features a local preacher, Robert Dickie Jr. The latter's son, Robert Dickie III, is Team's chief executive.

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Woodward is a typical product of America's rust belt, says Forbes. He grew up near Flint the town Michael Moore immortalised as a symbol of industrial decay in the film Roger & Me and studied at the General Motors Institute. But he learned his real metier out of hours, becoming a rep for Amway, the "granddaddy" of the multi-level marketing industry, in 1993. Five years later, he quit GM to become an Amway "distributor" and fast realised that the company's "kingpin" distributors were making more money from sales tools than from skincare products. In 2001, he formed Team which, thanks to his charisma, quickly became one of the most influential groups within the Amway salesforce. At first, Amway was happy to keep this cuckoo in its nest: a motivated salesforce worked in its favour too. But when it became clear that such "tool vendors" could lead to legal nightmares (see below), it tried to ditch Woodward.

A lengthy court case ensued and while Woodward lost the battle he won the war. The publicity from the case cemented Team loyalties and proved a useful recruiting sergeant. Within months Woodward had found another operation to latch on to: MonaVie. He is at pains to deny some of the more far-fetched claims relating to the juice (in one YouTube video, a sales rep implies that MonaVie cures cancer). But it works for him: he figures he'll pocket $6m this year.

Can he really make you rich?

It's easy to see why Amway, the world's biggest direct-selling group, was at pains to get shot of Team. Such pyramids within pyramids are illegal in many countries, says The Times. Indeed, last November the UK government took steps to shut down Amway's UK subsidiary on grounds that its model was against "the public interest".

The legal situation in America is more grey, notes Forbes. In 1996, the Federal Trade Commission attempted to draw lines between "legitimate and fraudulent" pyramids eventually ruling they were lawful so long as the focus was on selling goods to retail customers. But it did not define what was meant by "retail", leaving "plenty of wiggle room".

Work hard, learn the techniques, keep the faith and you will make money, is the promise that Woodward makes to followers. Essentially, his scheme operates just like a chain letter. Team members get a percentage of revenues hauled in below them in the pyramid so, in theory, those close to the top (known as "Black Diamonds") can do very well. Woodward's website is big on inspirational case studies of Black Diamonds (typically middle-aged couples) who have reached the higher echelon "by staying focused and having an incredible attitude". But in reality, says Forbes, "a mere 1% of Team members make any money". Many more probably lose. One Michigan man reports his wife racked up debts of $20,000 buying Team sales tools and Amway products. "She still thinks Team is going to set her free," he says.