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⚫	{{citecheck~~\|section~~}}
	'''Holiday Magic''' was a ] ] organization founded by ] ( - 1973) in the ] that played a role<ref name="thepit" /><ref name="navarro" /> in the development of ] in the ]. Originally the organisation distributed goods such as ] and ].		'''Holiday Magic''' was a ] ] organization founded by ] ( - 1973) in the ] that played a role<ref name="thepit" /><ref name="navarro" /> in the development of ] in the ]. Originally the organisation distributed goods such as ] and ].

	The organization ceased operating in 1974, after being investigated by the Market Court of ]<ref name="micklitz" />~~{{fact}}~~, ], the ], and the ]. Holiday Magic was characterized as a ], in hearings in the ], the ], and in graduate level coursework on ] and law journals.		The organization ceased operating in 1974, after being investigated by the Market Court of ]<ref name="micklitz" />, ], the ], and the ]. Holiday Magic was characterized as a ], in hearings in the ], the ], and in graduate level coursework on ] and law journals.

	== Organization ==		== Organization ==
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	== History ==		== History ==
	=== Origins ===		=== Origins ===
	Patrick had experienced a number of business failures, including ]. At age 33, in 1964, Patrick walked by a garage in ], and noted that fruit-scented cosmetics were being sold. Patrick bought all of the cosmetics supplies for about $16,000, and founded Holiday Magic, Inc. After this purchase, Patrick immediately began to sell distributorships in his new company<ref name="roleofsmall" />. More on the story of how William Penn Patrick came to found Holiday Magic, is detailed in hearings before the United States House of Representatives, Permanent Select Committee on Small Business<ref name="roleofsmall" />.		The story of how William Penn Patrick came to found Holiday Magic, was detailed in hearings before the United States House of Representatives, Permanent Select Committee on Small Business<ref name="roleofsmall" />. Patrick had experienced a number of business failures, including ]. At age 33, in 1964, Patrick walked by a garage in ], and noted that fruit-scented cosmetics were being sold. Patrick bought all of the cosmetics supplies for about $16,000, and founded Holiday Magic, Inc. After this purchase, Patrick immediately began to sell distributorships in his new company<ref name="roleofsmall" />.

	=== ~~Legal~~ ~~Proceedings~~ ===		=== Found guilty of fraud ===
	The ] filed suit against Holiday Magic, in December 1972<ref>{{cite news		The ] filed suit against Holiday Magic, in December 1972<ref>{{cite news
	\| last = Staff		\| last = Staff
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	</ref>.		</ref>.

	The SEC charged ] with "bilking some 80,000 people out of more than $250 million through his Holiday Magic cosmetics and soap empire."<ref name="time73" />		The SEC charged ] with "bilking some 80,000 people out of more than $250 million through his Holiday Magic cosmetics and soap empire."<ref name="time73" /> ] and President ] pleaded guilty to ], in the case ''United States v. Nocera, et. al.''<ref name="77consumerfraud" /> Another key individual in the company, ], served two years in a Federal Prison in ], for charges related to a ]<ref name="howe">{{cite news
		⚫	\| last = Howe
		⚫	\| first = Kenneth
		⚫	\| coauthors =
		⚫	\| title = L.A. Con Artist Behind Alleged Electricity Scam: Pyramid scheme linked to coming deregulation
		⚫	\| work = ]
		⚫	\| pages = A 1
		⚫	\| language =
		⚫	\| publisher =
		⚫	\| date = March 10, 1998
		⚫	\| url = http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/1998/03/10/MN44556.DTL
		⚫	\| accessdate = }}<br>"As far back as 1973, Huff helped start one of the largest of all pyramid schemes, a cosmetics marketing business called Holiday Magic, which defrauded investors of $250 million, according to the Securities and Exchange Commission."</ref>.

	The company was also investigated by the ]<ref name="roleofsmall">"The Role of Small Business in Franchising, Hearings Before the Subcommittee on Minority Small Business.", United States Congress. United States House of Representatives. House Permanent Select Committee on Small Business., 1973, P. 127, 137, 157, 203.</ref><ref>{{cite news		The company was also investigated by the ]<ref name="roleofsmall">"The Role of Small Business in Franchising, Hearings Before the Subcommittee on Minority Small Business.", United States Congress. United States House of Representatives. House Permanent Select Committee on Small Business., 1973, P. 127, 137, 157, 203.</ref><ref>{{cite news
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	\| accessdate = }}		\| accessdate = }}
	</ref>		</ref>
	== Employee Information - not directly related to Holiday Magic ==
	] and President ] pleaded guilty to ], in the case ''United States v. Nocera, et. al.''<ref name="77consumerfraud" />

	Another key individual in the company, ], served two years in a Federal Prison in ], for charges related to a ]<ref name="howe">{{cite news
⚫	\| last = Howe
⚫	\| first = Kenneth
⚫	\| coauthors =
⚫	\| title = L.A. Con Artist Behind Alleged Electricity Scam: Pyramid scheme linked to coming deregulation
⚫	\| work = ]
⚫	\| pages = A 1
⚫	\| language =
⚫	\| publisher =
⚫	\| date = March 10, 1998
⚫	\| url = http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/1998/03/10/MN44556.DTL
⚫	\| accessdate = }}<br>"As far back as 1973, Huff helped start one of the largest of all pyramid schemes, a cosmetics marketing business called Holiday Magic, which defrauded investors of $250 million, according to the Securities and Exchange Commission."</ref>.

	==References==		==References==

Revision as of 20:33, 30 May 2007

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Holiday Magic
Company type	For-profit
Industry	Consumer products
Founded	1964
Founder	William Penn Patrick
Defunct	1974
Headquarters	San Rafael, California, United States
Key people	Roland R. Nocera, President, CEO
Products	Cosmetics
Owner	William Penn Patrick

Holiday Magic was a fraudulent multi-level marketing organization founded by William Penn Patrick ( - 1973) in the United States that played a role in the development of Large Group Awareness Training in the human potential movement. Originally the organisation distributed goods such as home-care products and cosmetics.

The organization ceased operating in 1974, after being investigated by the Market Court of Sweden, United States Securities and Exchange Commission, the Federal Trade Commission, and the State of California. Holiday Magic was characterized as a pyramid scheme, in hearings in the United States Senate, the United States House of Representatives, and in graduate level coursework on criminal justice and law journals.

Organization

Leadership Dynamics, Mind Dynamics

William Penn Patrick wrote a booklet entitled Happiness and Success through Principle, in 1967, and founded Leadership Dynamics based on those principles. Every employee in the management of Holiday Magic were then expected to take part in the Leadership Dynamics coursework, which was described as having "overtones of strict military training techniques.

It later became corporately linked with Mind Dynamics (in 1970), and with Patrick's training organisation, Leadership Dynamics. William Penn Patrick, owner of Leadership Dynamics, bought Mind Dynamics in 1970. Patrick was a student of Alexander Everett, founder of Mind Dynamics, and used Mind Dynamics techniques as well as the Silva Mind Control Method in the Holiday Magic organization. When Patrick's businesses became "embroiled in pyramid schemes" both Leadership Dynamics and Mind Dynamics ceased operating. Every employee in management positions at Holiday Magic was required to participate in the coursework.

Ben Gay, a high-level instructor at Leadership Dynamics, was President of Holiday Magic in the United States. Though he claimed Leadership Dynamics was a separate company, "..in no way related to Holiday Magic, Inc.", Gene Church pointed out many inconsistencies in this statement, in his book The Pit: A Group Encounter Defiled.

History

Origins

The story of how William Penn Patrick came to found Holiday Magic, was detailed in hearings before the United States House of Representatives, Permanent Select Committee on Small Business. Patrick had experienced a number of business failures, including bankruptcy. At age 33, in 1964, Patrick walked by a garage in San Rafael, California, and noted that fruit-scented cosmetics were being sold. Patrick bought all of the cosmetics supplies for about $16,000, and founded Holiday Magic, Inc. After this purchase, Patrick immediately began to sell distributorships in his new company.

Found guilty of fraud

The State of California filed suit against Holiday Magic, in December 1972. In February 1973, Holiday Magic sued by Avon Products. Avon Products' lawsuit stated that "Holiday Magic employees distributed leaflets accusing Avon of goon squads, paying off The District attorney's office.." In June 1973, the United States Securities and Exchange Commission filed a lawsuit against Holiday Magic.

The SEC charged William Penn Patrick with "bilking some 80,000 people out of more than $250 million through his Holiday Magic cosmetics and soap empire." CEO and President Roland R. Nocera pleaded guilty to securities fraud, in the case United States v. Nocera, et. al. Another key individual in the company, Larry Stephen Huff, served two years in a Federal Prison in Lompoc, California, for charges related to a Ponzi scam.

The company was also investigated by the Federal Trade Commission, and in June 1973 the company was found guilty of deceptive trade practices. The Federal Trade Commission found that Holiday Magic was in violation of section 5 of the Federal Trade Commission Act, and section 2 (a) of the Clayton Antitrust Act. Holiday Magic later folded, amidst investigations by authorities and accusations of being a multi-level marketing pyramid scheme. Also in 1973, Holiday Magic's proceedings were prohibited by the Market Court of Sweden, and a fine was imposed of 2 million kronor.

Pyramid scheme

The company was termed as part of the "big three" scams, in a 1974 United States Senate hearing before the Consumers of the Committee on Commerce that dealt with pyramid sales. 1974 hearings before the Congressional Oversight panel of the Federal Trade Commission described Holiday Magic as a "Multi-level marketer of cosmetics", that used an "unfair and deceptive pyramid distribution scheme". Holiday Magic was also labeled a "pyramid scheme" and a "multi-level distributorship" by the United States Bureau of Domestic Commerce, in their 1976 published book: Crimes Against Business: A Management Perspective.

The company was cited by the United States House of Representatives in a 1975 hearing as an example of consumer fraud, again in 1977, and in 1991, in a hearing by the House Committee on Small Business. Katz's Everybody's Business: An Almanac also referred to Holiday Magic as a "pyramid sales organization". Turner described it as one of the first "pyramid marketing" companies in America. Clarke referred to the company as an "illegitimate" business. Tobias poked fun at the pyramid nature of the organization, in his book The Only Investment Guide You'll Ever Need, telling readers to be wary of "..Holiday Magic - where the big money to be made was not in selling cosmetics, but in selling franchises to sell franchises (to sell franchises).." Howe wrote in the San Francisco Chronicle that Holiday Magic was "..one of the largest of all pyramid schemes.."

Holiday Magic is used as an example in graduate level criminal justice coursework to analyze the nature of corporate scams. According to the Duke Law Journal: "Illegality permeated every facet of the promotion of the Holiday Magic marketing program." One of the Holiday Magic Inc. cases was also cited by The University of Chicago Law Review and the Columbia Law Review. The Office of the State Attorney General in Maine, United States cites In re Holiday Magic, Inc., 84 F.T.C. 748 as an example of pyramid schemes. Faltinsky described Holiday Magic as "..the largest pyramid scam of all time.."

References

^ Navarro,, Espy M. (2002). Self Realization: The Est and Forum Phenomena in American Society. Xlibris Corporation. pp. 54, 55, 61, 62. ISBN 1401042201. {{cite book}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)CS1 maint: extra punctuation (link)
Page. 54. :
"Mind Dynamics, founded by Alexander Everett, was the major forerunner of large group awareness trainings. Although Mind Dynamics was only in existence for a few years, it sparked an entire industry of similar trainings."
^ Church, Gene (1972). The Pit: A Group Encounter Defiled. New York: Outerbridge and Lazard. {{cite book}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)
^ Micklitz, Monazzahian, and Robler; Door to Door Selling, Pyramid Selling, Multilevel Marketing, CONTRACT NO. A0/7050/98/000156, A STUDY COMMISSIONED BY THE EUROPEAN COMMISSION, VOLUME II: ANALYSIS. November 1999.; Pages 196, 205, 209, 214, 215, 233.
Church, Gene., The Pit, Pp. 2, 8.
"Ben Gay stated that leadership Dynamics Institute was a separate company, in no way related to Holiday Magic, Inc. (It must have been a coincidence that Ben Gay was at that time President of Holiday Magic in the United States. A coincidence that the founder of Holiday Magic, William Penn Patrick was co-owner of LDI. Coincidence that instructor Jerry Booz was National Vice-President for Holiday Magic Ltd. in Canada, that instrutctor Sharoll Shumate was Regional Vice-President for Holiday Magic in the United States Northeast, and that instructor Vance Powell was Regional Vice-President for Holiday Magic in the United States Southwest.)"
^ "The Role of Small Business in Franchising, Hearings Before the Subcommittee on Minority Small Business.", United States Congress. United States House of Representatives. House Permanent Select Committee on Small Business., 1973, P. 127, 137, 157, 203.
Staff (December 7, 1972). "Holiday Magic was the sixth company brought to court.". Star-News, Pasadena, California. {{cite news}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
Staff (February 23, 1973). "Avon's Suit Cites Accusations". The Fresno Bee. {{cite news}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
Staff (June 30, 1973). "SEC Files Suit against 13 firms". The Fresno Bee. {{cite news}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
^ Staff (July 16, 1973). "Battling the Biggest Fraud". Time Magazine. pp. 2 pgs. {{cite news}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
William Penn Patrick, a former mentor of Turner's, was charged last month by the Securities and Exchange Commission with bilking some 80,000 people out of more than $250 million through his Holiday Magic cosmetics and soap empire.
^ "Summary of Testimony and Findings and Conclusions Resulting from Hearings in New York on Drug Law.", United States Congress, Select Committee on Narcotics Abuse and Control, 1977, P.53.
^ Howe, Kenneth (March 10, 1998). "L.A. Con Artist Behind Alleged Electricity Scam: Pyramid scheme linked to coming deregulation". San Francisco Chronicle. pp. A 1. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
"As far back as 1973, Huff helped start one of the largest of all pyramid schemes, a cosmetics marketing business called Holiday Magic, which defrauded investors of $250 million, according to the Securities and Exchange Commission."
Staff (September 22, 1974). "Mondaie Says Pyramid Selling Top Consumer Fraud Problem". The Coshocton Tribune. {{cite news}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
Staff (December 20, 1972). "Endless Chain Scheme Suit Hits Cosmetics Co". Star-News, Pasadena, California. {{cite news}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
"Pyramid Sales: Hearing Before the Subcommittee for Consumers of the Committee on Commerce, United States Congress", 1974, United States Congress, Pp. 6, 19, 24., Library of Congress.
Federal Trade Commission Oversight, Hearings, 1974, Pp. 83., March 1, 7, 14; May 9, 1974, United States Congress., Senate. Committee on Commerce.
United States Bureau of Domestic Commerce (1976). Crimes Against Business: A Management Perspective. U.S. Dept. of Commerce. pp. 103, 106, 114. {{cite book}}: Cite has empty unknown parameter: |coauthors= (help)
"Equal Credit Opportunity Act Amendments and Consumer Leasing Act-1975., Hearings, United States Congress. Senate. Committee on Banking, Housing and Urban Affairs. Subcommittee on Consumer Affairs. 1975, P. 304., Hearings on S. 483, 1900, 1927, and 1961, and H.R. 5616.
"Franchising in Hard Times: Hearing Before the Committee on Small Business, House of Representatives.", United States Congress. House Committee on Small Business, 1991, ISBN 0160368979 , P. 14, 90.
Katz, Michael (1980). Everybody's Business: An Almanac: An Irreverent Guide to Corporate America. Harper & Row. pp. Pp. 243. ISBN 0062506218. {{cite book}}: |pages= has extra text (help); Unknown parameter |coauthors= ignored (|author= suggested) (help)
"Shaklee tries hard to distinguish themselves from pyramid sales organizations, such as "Holiday Magic," that have run afoul of the law."
Turner, Glenn W. (2007). All Things Are Possible. Xulon Press. pp. Pp. 161-164. ISBN 160034898X. {{cite book}}: |pages= has extra text (help); Cite has empty unknown parameter: |coauthors= (help)
Clarke, Margaret D. (2002). The Triumph of Louise Laurel & Successful Parenting/Nurturing: By the Hand of God. Xulon Press. pp. Pp. 59. ISBN 1591602777. {{cite book}}: |pages= has extra text (help); Cite has empty unknown parameter: |coauthors= (help)
Tobias, Andrew (1989). The Only Investment Guide You'll Ever Need. Bantam Books. pp. Pp. 12. ISBN 0553262513. {{cite book}}: |pages= has extra text (help); Cite has empty unknown parameter: |coauthors= (help)
"Things that look like the cosmetics companies but are really chain letters in disguise, like Glenn Turner's Koscot International and Holiday Magic - where the big money to be made was not in selling cosmetics, but in selling franchises to sell franchises (to sell franchises).."
DeMuro, RG. "Holiday Magic Inc.: An Anatomy of a Scam", Rutgers University, NJN Brunswick - 1982 - Rutgers University. Graduate School of Criminal Justice
Hildebrandt, Stephen A. (May 1975). "Heater v. FTC and the Federal Trade Commission Improvement Act: The FTC's Power to Order Restitution". Duke Law Journal. 1975 (2): pp. 379-388. doi:doi:10.2307/1371995. {{cite journal}}: |pages= has extra text (help); Check |doi= value (help); Cite has empty unknown parameter: |coauthors= (help)
Merrill, Thomas W. (Autumn, 1976). "First Amendment Protection for Commercial Advertising: The New Constitutional Doctrine". The University of Chicago Law Review. 44 (1): 205–254. doi:doi:10.2307/1599265. {{cite journal}}: Check |doi= value (help); Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
Magaziner, Fred T. (June 1975). "Corporate Defamation and Product Disparagement: Narrowing the Analogy to Personal Defamation". Columbia Law Review. 75 (5): 963–1008. doi:doi:10.2307/1121559. {{cite journal}}: Check |doi= value (help); Cite has empty unknown parameter: |coauthors= (help)
Pyramid Schemes Are Illegal, Consumer Law Guide, Chapter 22: Consumer Rights And Multilevel Marketing (Pyramid) Schemes, Office of the State Attorney General, Maine, United States
Faltinsky, Raymond J. (Spring 1992). "The Chaos of Multilevel Marketing and Pyramid Sales Laws: A Federal Remedy" (PDF). Supervised Analytical Writing: Yale Law School: Pages 13, 14, 23, 35. {{cite journal}}: Cite has empty unknown parameter: |coauthors= (help)

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