Stop The Amway Tool Scam Scott Johnson and Peter Mingils talk with a person from Australia who goes by the online name of Kangen Cringe. He talks about the infiltration of Kangen opportunities on advertisements on line that are targeting young tradesmen.
The show covers a bunch of topics including Scott’s opinion on retail sales and undisclosed profits from tool sales. We have covered this on Building Fortunes Radio and on MLM News https://mlm.news
Direct Selling News https://directselling.news and Direct Sales news sites https://directsales.news are covering this topic as well
The landscape of multi-level marketing (MLM) and high-ticket “success coaching” is currently undergoing a seismic shift. From the grassroots activism of industry veterans like Scott Johnson to the corporate pivots of giants like BODi, the mechanisms of what critics call “the dream machine” are being dismantled.
This report explores the ongoing exposure of undisclosed profit schemes, the financial realities of moving away from the MLM model, and the cultural impact of both defenders and critics of the industry.
The Origin of Resistance: Scott Johnson and Building Fortunes Radio
For over a decade, Scott Johnson operated within the Amway machine. Like many, he was sold on the “Plan”—a promise of financial freedom through the sale of household products. However, Johnson’s perspective shifted when he discovered the “hidden” economy of the business: the Tool Scam.
The Undisclosed Profit Scheme
In many large-scale MLMs, the real money isn’t made by selling soap or vitamins; it is made by selling the method to sell those products. Scott Johnson identified that high-level “Diamonds” and “Emeralds” were generating massive, undisclosed profits through the sale of:
- Motivational Media: MP3s and books that distributors were pressured to buy weekly.
- Functions: Large-scale rallies and seminars where ticket prices far exceeded the cost of the venue.
- System Subscriptions: Recurring fees for “education” that often yielded no tangible retail results.
Johnson realized that for the vast majority of distributors, the cost of these tools effectively wiped out any profit made from actual retail sales. When he went public with these findings, he teamed up with Peter Mingils on Building Fortunes Radio. Their regular segment, Stop The Amway Tool Scam, serves as a historical and ongoing archive for ex-distributors to share how these “educational” systems operate as a pyramid scheme within a pyramid scheme.
The BODi Pivot: From MLM (2024) to Affiliate (2025)
The most significant corporate validation of the “MLM is failing” thesis came from The Beachbody Company (now BODi). Between late 2024 and early 2025, the company executed a radical transformation, abandoning its 20-year-old network marketing structure in favor of a single-level affiliate model.
Year-Over-Year Financial Impact
The transition was financially jarring but strategically necessary. In 2024, the company was drowning in the overhead costs of supporting a complex multi-level “Coach” network while facing a steep decline in revenue.
| Metric | 2024 (MLM Model) | 2025 (Affiliate/Omni-Channel) |
| Total Revenue | $418.8 Million | $251.7 Million |
| Net Income/Loss | ($71.6 Million Loss) | ($2.9 Million Loss) |
| Operating Income | ($66.2 Million Loss) | $5.5 Million Profit |
| Gross Margin | 68.6% | 73.0% |
The Positive vs. Negative Trade-offs
The data shows a company that shrunk to survive. While revenue plummeted by nearly 40%, the company achieved its first full year of operating income since going public.
- The Positives:
- Sustainability: By eliminating “over-rides” (paying commissions to multiple levels of uplines), the company drastically improved its margins.
- Regulatory Safety: Moving to an affiliate model removes the risk of FTC “pyramid scheme” investigations, which focus heavily on recruitment-based earnings.
- Reduced Friction: Customers no longer feel pressured to “join the business” just to buy a fitness program.
- The Negatives:
- The “Human Cost”: BODi cut its workforce by 33% and left thousands of high-ranking “Coaches” without their expected residual income.
- Retention Challenges: Without the “social pressure” and community of a downline, digital subscriber retention dipped slightly to 96.9%.
Danny de Hek: The “Crypto Ponzi Avenger”
While Scott Johnson tackles traditional MLM, New Zealander Danny de Hek has become a central figure in the fight against the “new wave” of scams: Crypto-MLMs. De Hek uses his platform to conduct Open-Source Intelligence (OSINT) investigations into “Passive Income” platforms that combine the recruitment tactics of MLM with the opacity of cryptocurrency.
Major Takedowns and Legal Battles
De Hek’s impact is measured by the magnitude of the schemes he has helped expose:
- HyperVerse/HyperFund: De Hek was an early whistleblower for this $1.89 billion fraud. His videos predicted the collapse years before the SEC filed charges in 2024.
- Goliath Ventures: In late 2025, de Hek faced a 124-page defamation lawsuit from CEO Christopher Delgado for calling the company a Ponzi scheme. In early 2026, the lawsuit was dropped after federal agents arrested Delgado for a $328 million fraud, exactly as de Hek had described.
De Hek’s work highlights a critical truth: modern scammers use “defamation” lawsuits as a “gagging writ” to silence critics while they continue to drain investor funds.
Stormy Wellington: The “Millionaire Coach” Critique
In the realm of personal branding and “Success Coaching,” Stormy Wellington represents the opposite end of the spectrum. Known as “Coach Stormy,” she has built a massive following through companies like Total Life Changes (TLC) and, more recently, Farmasi.
The Knowledge Gap and Success Paradox
Critics, including many in the Anti-MLM movement, point to Wellington as an example of the “Lack of Knowledge” prevalent in distributor-led coaching. The critique focuses on several areas:
- Financial Literacy vs. Showmanship: While she displays immense wealth (Rolls Royces, mansions), critics argue she offers little in the way of actual business operations knowledge, focusing instead on “mindset” and aggressive recruitment.
- The Model Flip: In late 2024/early 2025, Wellington notably parted ways with TLC—a company where she was a top earner—to join Farmasi. This move highlighted the fragility of the “Success Coach” narrative; if the model is so lucrative, why the need to constantly jump to new “ground floor” opportunities?
- Exploitation Allegations: Podcasts and documentaries have scrutinized her methods, alleging that her “success coaching” focuses on vulnerable demographics who spend their last savings on “kits” that rarely lead to the promised lifestyle.
Conclusion: The Death of the “Old Guard” MLM?
The transition of BODi suggests that the “traditional” MLM model is becoming too expensive and too legally risky to maintain. When combined with the activism of Scott Johnson (exposing tool profits) and Danny de Hek (exposing crypto fraud), the “curtain” is being pulled back.
Figures like Stormy Wellington continue to find success through sheer force of personality, but the data—and the regulators—are catching up. The era of undisclosed tool profits and unregulated crypto-pools is facing its most significant challenge yet.
Would you like me to look into the specific FTC guidelines for 2026 that influenced these corporate transitions?
Stop the Amway Tool Scam – Scott Johnson on Building Fortunes Radio
This video features Scott Johnson discussing his personal journey and the specific mechanics of the “Tool Scam” that he and Peter Mingils expose on their radio show.
You can see more of what Scott Johnson has on https://www.facebook.com/stoptheamwaytoolscam
The Amway tools scam is a hidden profit scheme within the Amway multi-level marketing (MLM) structure that exploits distributors, often leaving them with financial losses instead of the promised wealth. Amway, a well-known MLM company, markets health, beauty, and home products through independent business owners (IBOs). While the company emphasizes product sales, the real money for top-tier distributors, often at the Diamond level or above, comes from selling motivational “tools” like books, tapes, seminars, and rallies, not from product sales. These tools, promoted as essential for success, create a separate revenue stream that disproportionately benefits upline leaders while draining the profits of lower-level distributors.
Distributors are pressured to purchase these overpriced tools, often costing hundreds or thousands annually, with promises of learning the secrets to building a lucrative Amway business. However, studies and lawsuits reveal that 99% of Amway distributors lose money, with average earnings below $100 monthly after expenses. The tools business, controlled by high-ranking distributors like Dexter Yager, generates millions for the elite, who earn significant markups on items like cassette tapes sold at rallies for up to $10,000 a night in cash. Meanwhile, new recruits face high startup costs—starter kits, training sessions, and product samples, further eroding their profits. This creates a pyramid-like structure where uplines profit from downlines’ purchases, not retail sales, resembling an illegal scheme.
