BULLETIN: BurnLounge MLM Operators, Top Promoters Ordered To Pay Nearly $17 Million In FTC Pyramid-Scheme Case

BULLETIN: A federal judge in California has ordered the operators and top promoters of the BurnLounge MLM scam to pay nearly $17 million.

The FTC brought the BurnLounge pyramid-scheme case in 2007, saying the program “primarily provided payments to participants for recruiting of new participants, not on the retail sale of products or services.”

In an amended final judgment and order for permanent injunction released by the FTC today, U.S. District Judge George H. Wu of the Central District of California directed BurnLounge Inc. and CEO Juan Alexander Arnold of Studio City, Calif., to pay $16,245,799.

Pitchman John Taylor of Houston was ordered to pay $620,138 , and pitchman Rob DeBoer of Irmo, S.C., was ordered to pay $150,000. In 2007, pitchman Scott Elliott of Forney, Texas, settled with the agency for $20,000.

BurnLounge masqueraded as a legitimate multilevel-maketing firm and made misleading claims about earnings while sucking in more than 56,000 participants, the FTC said.

“BurnLounge recruited consumers from across the country by telling them that participants earned huge incomes,” the FTC said. “Investors could buy into the BurnLounge organization for prices ranging from $29.95 to $429.95, plus monthly fees. While participants were compensated for music and album sales, most compensation came from recruiting others into the plan.”

More details at the FTC site.

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4 Responses to “BULLETIN: BurnLounge MLM Operators, Top Promoters Ordered To Pay Nearly $17 Million In FTC Pyramid-Scheme Case”

  1. I am shocked that Adam Gilmer was not mentioned or charged in this Ponzi. At one time I believe he was the CEO of this company when it started. I know he got fired, but still shocked that he was not named and charged, because in my opinion he should have been. It was a Ponzi from day one, not after he left the company.

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  2. I was one of the suckers that Alex Arnold fool here in Puerto Rico when he had Nueworld he sold shares of that company to the members and we never see a penny out of it .
    I lost $10,000.00 so it is good what is happening to Alex,Scott and the others they are the wild bunch they deserve to be in jail.

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  3. Can I get my money back from Burnlounge? I paid 500 to join plus monthly fees.

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  4. Johnny Hutcherson:
    Can I get my money back from Burnlounge? I paid 500 to join plus monthly fees.

    Hello Johnny,

    There is an FTC “Contact Us” link near the bottom of this page:

    http://ftc.gov/os/caselist/0623201/index.shtm

    Patrick

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