LOS ANGELES (CN) - The world's largest Amway distributors expanded their business from Taiwan into Chinese communities in the United States, defrauding their new clients with promises of "enormous profits," nine Amway sellers claim in court.
Lead plaintiff Longsheng Lei and eight other of the self-described "most successful distributors in the entire Amway organization" sued Amway and husband-and-wife Amway distributors Barry Chi and Holly Chen in Superior Court. They allege breach of contract, fraud, false advertising, unfair competition, unjust enrichment, conversion and negligent misrepresentation.
"Defendants, husband and wife Barry Chi and Holly Chen are the single largest Amway distributors in the world," the lawsuit states. "Barry and Holly's network has spread from her base in Taiwan to Chinese communities in United States, including the Southern California region."
Chi and Chen persuaded the plaintiffs to attend their seminars and become "independent business owners" through Amway's pyramid selling structure, Lei says.
According to the 14-page lawsuit, the husband and wife made "false promises of enormous profit" and Chen told seminar attendees that she has so much money she "doesn't even know how much she makes."
Lei claims that although the defendants promised she could make hundreds of thousands of dollars or even millions in commissions, the reality is that Amway knows its business owners make closer to $200 a month.
She claims that Amway and Chen and Chi, like other high-level distributors, make most of their money through the sale of "non-Amway" motivational books, tapes and seminars.
Lei claims that after she became an independent business owner in 2011, Amway falsely accused her of using other Amway sellers to send products to an Army base in Texas.
Another distributor, plaintiff Hui Cao, was accused, with scant evidence, of selling Amway products through Amazon storefront, Platinum Wire, according to the lawsuit.
Amway suspended Lei's registrations and withheld Cao's commissions even though Amway represents to distributors that they work for themselves and are not "bound one to the other in any other relationship other than that of an independent arm's length business relationship," the lawsuit states.
The plaintiffs seek punitive damages and costs and are represented by Long Liu of San Gabriel.
Amway did not immediately respond to a request for comment.
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