Word: amway
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...criminal charges, which were also brought against Amway itself and two other top company executives, appeared to take Van Andel and DeVos by surprise. But Amway's troubles in Canada are nothing new. Two years ago the Canadians brought suit against the company to collect $118 million in back customs taxes and penalties, arguing that Amway had understated the value of the goods it was importing for sale...
...Amway says that the problem arises because its unusual structure makes figuring the customs taxes difficult. Under Canada's rules, the amount of duties on American-made items is determined by the wholesale selling price in the U.S. But Amway has no wholesale prices as such, only the much higher prices used by its system of independent distributors, many of them husband-and-wife teams...
DeVos and Van Andel say the Canadians approved the company's system for handling valuations back in 1965, but the Canadians are arguing that Amway never stuck to that plan at all. Further, they claim that Amway fabricated bogus invoices to fake a low level of wholesale prices. After the customs people filed civil charges against the company, a criminal investigation leading to the indictments was begun by the Royal Canadian Mounted Police...
...Andel said Amway was "totally innocent of any wrongdoing." Said DeVos: "The 1965 agreement was made between honorable people at the time." DeVos also told TIME, "We don't think they have a case. In no way whatsoever are we crooked...
DeVos blamed Amway's problems on "false and misleading evidence" given the Canadians by the company's former financial vice president, Edward Engel, who is now business manager of the Detroit Free Press. In August, the newspaper published a sweeping expose of Amway's business practices, replete with internal corporate memorandums, but denies that Engel was its main source...