Susy, to answer you question... As others have stated, your family member needs to get away from those in his "business" and get some serious counseling.
Lindsay, I'd disagree with that assessment to a large degree. There are two entities at work here: Amway/Quixtar and the nephew's QMO (Quixtar Motivational Organization, AKA "Upline"). A little background: For about 9 years (ending about 2 years ago) my parents were hip-deep in Amway/Quixtar. I watched as they effectively went broke trying to "Be Free". My Dad blew threw his parent's inheritance, their savings, you name it. Once I my sister and I had to loan them money so they wouldn't lose their house... and still they wouldn't get out of the Amway/Quixtar trap. Their marriage of 40 years has been strained almost to the breaking point several times during the ordeal.
The main problem is that largely the QMO's sells a vision to their "IBOs" that they too will become millionaires if they just "work the business" and get "plugged into the System". "The System" being overpriced books, tapes, meetings (both local and major functions), etc. etc. What the lower level IBO's aren't told is that the big shots on the stages are making most of their money, not from Amway/Quixtar commissions, but from their profits for sales of "The System". So my Mom and Dad bought into a false vision and held on to it for years.
So what is Amway/Quixtar's "fault" in this? For starters, they have been fully aware of the abuses being committed by the QMO's, but have largely failed to act on the problems. This is because they have become co-depended on the "big pins" and their armies of IBO's. Without them, Amway/Quixtar would be dead in the water with no real meaningful sales. Several years ago, instead of trying to fix the problems that were cropping up in the forms of lawsuits over things like the profits from "The System", Amway decided that the best way to deal with the problems was to make distributors sign binding arbitration agreements that gagged parties from talking publicly about any internal Amway squabbles and forced everyone to abide by the decisions of arbiters of Amway's choosing! Fortunately, judges have often thrown the agreements out, noting their gross unfairness, when Amway/Quixtar has tried to use them to get filed lawsuits thrown out of court.
And then there's Amway/Quixtar's "looking the other way" when it comes to the rules designed to insure that the business isn't an illegal Pyramid Scheme. Since Amway signed a consent decree with the FTC in the late 1970's, they are supposed to insure that a certain amount of sales are actually retail sales to non-distributors/IBO's. By law, any system that is built on "self-consumption" of product among members that are recruited is illegal. For decades there was a set percentage of sales that had to be real genuine retails sales in order for any bonus to be paid. A few years ago the absolute rules was re-worded to be less absolute. Amway/Quixtar also relies on unverified self-reporting to "enforce" the rules on bonus payouts. When you used to walk into my parents' garage and basement, it looked like an Amway warehouse up in Ada. They were packed with product they had been encouraged to by so they could maintain their standing in their line of sponsorship. Water conditions, air purifying fans, stacks of "starter kits",... you name it.