Austria denies responsibility for its ignorant complicity

What was supposed to be D-day for anyone interested in the Lyoness story, turned into a bitter disappointment. On the day on which the Austrian Ministers of Finance and Justice were legally required to answer to the parliamentary inquiries filed by Gerhard Huber, member of the Austrian parliament for the BZÖ, it became clear that the Austrian government could not care less about the racket developing under their very noses for almost a decade, scamming 3 million people out of billions of euros worldwide.

The answers provided by both Ministers, which they waited to provide for 2 months, until the last day before the statutory deadline, were outrageously short and of an abominable quality, to say the very least. Beatrix Karl, Austrian Minister of Justice, came to the conclusion that the Austrian authorities have dealt with the Lyoness racket satisfactory, and crushed the dreams of millions of victims that they could count on government support in their strive for the retribution they deserve, as well as of millions of Austrian citizens believing they live in a country where justice is served.

Next to referring to her own answers to earlier questions, which contain little more than summed-up, irrelevant facts, Karl is of the opinion that anyone deliberately scammed out of his or her life savings by these racketeers, with the apparent approval of the Austrian government, has to take action him or herself to redeem the money. The Austrian authorities occupied with the investigation of Lyoness, which have been working on this case for quite a while now, will need a lot more time to conclude their investigation - and can therefore not be counted on by the victims of the Lyoness racket.

Beatrix Karl:

"To the number 14535/J-NR/2013:

Member of parliament Gerhard Huber, and his colleagues filed a written request with the subject "the growing number of victims of Lyoness".

I answer these question as follows:

To questions 1, 2, 11, 12, 15 and 16:

First, I refer to the reply to the earlier answers to questions filed by Gerhard Huber and his colleagues, concerning "the Lyoness system", with the number 11785/J-NR/2012 and concerning "allegations and confusion about Lyoness", with the number 13277/J-NR/2012.

The public prosecutor for economic and corruption has not yet finished its investigation. I ask for your understanding I cannot answer questions about the results of an ongoing investigation, as that could jeopardise the rights of the injured parties and the future success of unfinished investigations. Speaking of whether criminal investigations are conducted against certain persons would also violate data protection regulations.

To questions 3, 13 and 14:

In the area of ​​civil law legislature the justice department cannot take action for the benefit of victims. Civil claims are the responsibility of the injured themselves, and they should pursue their own interests in individual cases in front of independent courts.

To questions 4 to 10:

For the requested statistics, I refer to the answer to the questions of parliament member Johann Maier and his colleagues, with the subject "Judicial proceedings pursuant to § 168a of the Criminal Code", with the numbers 4128/J-NR/2006, 557/J-NR/2007, 93727/J-NR/2008, 1153/J-NR/2009, 5050/JNR/2010, 8200/J-NR/2011, 12054 / J -NR/2012 and 14230/J-NR/2013."

The Minister of Finance, Maria Theresia Fekter, has not got any better news for the victims and unconsciously admits that she has not fully understood the Lyoness racket - comparing the Lyoness membership with a 'hobby' and generally describing the fraudulent 'advance payments' as a way to acquire a 'future customer base'. Perhaps Fekter should have a look around and study the subject a bit more intensively.

Maria Theresia Fekter:

To the written parliamentary questions filed under number 14534 / J of 25 April 2013, filed by parliament member Gerhard Huber and his colleagues:

To the questions 1, 4 to 6, and 7:

Due to the tax law confidentiality rules, in accordance with § 48a of the Federal Fiscal Code (BAO), no information may be shared about the implementation of the specific methods of delivery or fiscal court proceedings.

Additionally it should be noted that to ensure a stable revenue in times of budget cutbacks, the protection of taxpayers' money and a high tax morale are essential. As part of an effective and efficient detection and prosecution of tax evasion and fraud in any form, intensive cooperation between authorities at both national and international levels are required.

To question 5:

Concrete facts about ongoing investigations cannot be provided to the parliament. In the following text, the tax treatment of payments for the acquisition of market share or a customer base in general are described:

Basically, it is assumed that the consideration of advance payments for the acquisition of market share in future commission income, will render potential future customers. A contribution to a customer base is thus made, yet the details of the payment date are not yet known. The exact amount of the deposit of the member has no direct influence on the future customers, the resulting influent commissions are unknown and can not be influenced by the member.

With the deposit therefore a future customer base is acquired. Its acquisition is, however, only at the time prior to the first commission from this customer base actually accrue. According to the Income Tax Regulations 2000, Rz 523 expenses for the acquisition of a customer base are a capitalisation of a portion of the representing business or goodwill. Therefore, the payments for the acquisition of a market share (customer) are not tax-deductible immediately, but according to §8, paragraph 3, of the Income Tax Act of 1988 mandatory tax should be considered as distributed over 15 years. However, the depreciation begins
to run when the first commission from the acquired market shares in the position (settlement) lands on the account. If a taxpayer claims losses, in any case it will have to be examined whether a hobby was responsible for these losses."

This is all quite funny if one considers that Lyoness has been hiding in plain view for a decade now, and was spotted by - and brought to the attention of the Austrian government and authorities in 2004 (!!!). For almost a decade, less than nothing was undertaken to stop or forbid the racket and prevent millions of people worldwide from being scammed out of their money, and now, when the fairy tale falls to pieces, the Austrian government waives all responsibility and leaves its tax-paying, legitimacy-providing citizens (of which more than 470,000 were enticed to hand over their money to the Lyoness racketeers), which are legally their only source of power and whom they are supposed to represent and protect, standing in the cold.

Victims seeking financial retribution for their damages might have a better shot using the civil courts for suing the Austrian state, which is largely responsible for the harm done to them, than to sue the effectively bankrupt Lyoness racket, which will make sure it has not got a single traceable dime to repay its deceived 'members'. It may also be more effective than desperately trying to peddle their valueless positions for a strongly discounted price on eBay.

P.S. Did anyone else notice the familiar hand gesture of both Ministers?


  1. I don't view the parliamentary comments so negatively. There is, after all, an ongoing criminal investigation and they must let those officials carry on and reach their conclusions. I can understand them wanting to be cautious at this point. As much as we don't like it, we must remember the wheels of justice turn slowly.

    Please remind those in the USA to contact the Federal Trade Commission in Wash. D.C. at 877-382-4357. The more complaints they receive, the sooner the US opens its own criminal investigation into this heinous fraud.

    1. Dear Anonymous,

      These authorities have had over a decade now to carry out their investigation, and they still have not managed to close the Lyoness lie down. The wheels of justice may turn slowly, but this is of course ridiculous.

      We'd encourage everyone duped by Lyoness to file complaints in their own countries, especially in the United States.

  2. Sad news indeed. Eventually Lyoness will crumble but when it does it may be too late for most of the victims. We could at least hope that these two will be held accountable as everyone else involved in allowing this scam to run unhindered for these years.
    This is also a bitter lesson for everyone to learn, that we need less clueless people in top government positions. If a ministry of finance has no freaking clue how this scam works, that practically makes you question her expertize and knowledge of what constitutes for pyramid and ponzi schemes.

  3. All this makes me wonder how these morally, and intellectually, feeble politicians have the cheek to cash their fat salary cheques; for, in theory, they have sworn an oath to defend their employers (the people of Austria), but, in order for them to do so, they will have to start looking beyond the ends of their noses and apply some serious thinking.

    What can be deduced from this strangely-familiar, parliamentary tragicomedy, is that, in general, Austrian politicians are no different to any other elected representatives around the world; in that when they are faced with a dissimulated, totalitarian threat to democracy and the rule of law, but which they don't understand, instead of behaving like adults and telling the truth, they behave like children, by putting on an act that they know exactly what they are doing.

    It should be remembered that the ongoing, major, organized crime group known as 'Lyoness,' is neither original nor unique and, consequently, it cannot be fully-understood in isolation.

    'Lyonesss' has been maliciously set up (exactly like the Italian-American 'Mafia', 'Scientology', 'Amway', 'Herbalife', 'Second KKK,' etc ) to a perverted, esoteric pattern designed to prevent, and/or divert, investigation and isolate its bosses from liability.

    The technical questions posed by Gerhard Huber, demonstrate that he probably doesn't yet fully-understand the ugly cultic phenomenon lurking inside the pretty corporate Trojan Horse of 'Lyoness.' However, the current (temporary) Austrian Finance Minister, Maria Theresia Fekter, and the curent (temporary) Austrian Justice Minister, Beatrix Karl, have a severe conflict of interest when it comes to facing the pernicious cult hidden inside 'Lyoness.'

    In simple terms, the truth remains unthinkable to members of the Austrian government and to the Austrian authorities, because they have not only completely failed to recognise this blame-the-victim cultic racket dressed-up as an 'innocent cash-back scheme and income opportunity,' and allowed it to grow unchallenged in their own land, but, by doing nothing, they have allowed it to spread all around the globe.

    Given the tragic history of Austria in the mid 20th century, and the fact that familiar red-flags started to appear around 'Lyoness' in 2004, it seems inconceivable that today, Austria's elected leaders are again incapable of looking beyond the ends of their noses.

    It would also be interesting to know just how deeply führer Freidl has managed to infiltrate Austrian politics.

    David Brear (copyright 2013)

    1. Readers should be aware that Mr Brear has turned his comment into an article on his own Blog:

  4. Regarding the Maria Theresia Fekter answer for question 5. although the English translation is poor, it does prove that downpayments/deposits to lyoness are used to pay out commissions (gaining market share)and not to buy your vouchers.

    Where in the lyoness sales propaganda do they mention this? If you (like me) have joined lyoness being told that your downpayment/deposit remains yours, and as it says on your "TAILORED" downpayment/deposit invoice, that the funds are used to "BUY THE VOUCHERS" then you are being scammed liked I have been.

    Laughably... I was told by an employee in the London office that my downpaid vouchers were purchased and kept in a safe at the lyoness office, and that staff would help themselves to them for their own benefit!!!! No wonder the perverted Werner Kaiser and Hubert Friedl love to shop in Harrods!!! And no wonder there are no voucher audits or stock takes (Info from the now MD UK). It would be an interesting exercise to see how much money has been stolen by these fraudsters. Call already made to BBC Crimewatch ;-)

    So... if downpayments/deposits are being used to pay commissions, proved above, and specially ordered voucher orders are being stolen by directors and staff, no wonder there is no money for the tax man!

    If every single member of lyoness completed the payment of their downpaid/deposit invoice, the TAX POINT on that invoice will become due. MEANING... Lyoness has got to pay up its taxes (or the taxes it hasn't managed to avoid/evade so far.

    Isn't it a wonder why Lyoness screws up voucher orders and every SME gets totally pissed off (if they ever make it on to the system in the first place...), and not forgetting to mention TOTALLY pissing of its members eventually! lyoness doesn't want you to complete your unpaid invoice by SHOPPING! SHOPPING! SHOPPING! They stand to get a tax bill if you do. They need your downpayments/deposits to buy their children houses and fuel their jets, and all with company money! Mine and your money!!!!!

    The question is... is there enough money in their grubby hands to afford to pay any tax bill? If not then lyoness is insolvent! And not when you complete your payment... they are effectively insolvent now!

    GET YOUR BEGGING BOWL READY HUBERT AND CO, and get ready for the legal battle of your lives!!!

    Why wait for the authorities to close them down when we have the tools to do it ourselves.

    1. Dear Anonymous,

      Thank you for your comment.

      Please note that, as you probably did already, no members of our team are native German nor English speakers. We do our best to understand the German coverage of the developments around Lyoness, and translate it into acceptable, readable English for our readers. Our apologies if we fail in this.

      If, however, you can work up a better translation of the answers of Austrian Finance Minister Maria Theresia Fekter, we would be happy if you could post it here.

      Our conclusion is the same as yours - Lyoness is insolvent and this labyrinth of corporate structures is effectively bankrupt: