FTC, 3 State Attorneys General Move On Fortune Hi-Tech Marketing (FHTM) Amid Pyramid Allegations; MLM Site Now Resolves To Court-Appointed Receiver’s Page

breakingnews72BULLETIN: The FTC and attorneys general for the states of Illinois, Kentucky, and North Carolina have moved against Fortune Hi-Tech Marketing (FHTM), alleging it is a pyramid scheme. A federal judge in the Northern District of Illinois has appointed a receiver and ordered an asset freeze. FHTM’s website at FHTM.com now resolves to a site controlled by the receiver, Robb Evans & Robb Evans & Associates.

“This is the beginning of the end for one of the most prolific pyramid schemes operating in North America,” said Kentucky Attorney General Jack Conway. “This is a classic pyramid scheme in every sense of the word. The vast majority of people, more than 90 percent, who bought in to FHTM lost their money.”

A top FTC official called FHTM a “rigged game.”

“Pyramid schemes are more like icebergs,” said C. Steven Baker, director of the FTC’s Midwest Region. “At any point most people must and will be underwater financially. These defendants were promising people that if they worked hard they could make lots of money. But it was a rigged game, and the vast majority of people lost money.”

Named defendants were FHTM President and Director Paul C. Orberson; FHTM CEO Thomas A. Mills, Fortune Hi-Tech Marketing Inc. of Lexington, Ky.; FHTM Inc. of Lexington, Ky.; Alan Clark Holdings LLC of Danville, Ky.; FHTM Canada Inc. of Ottawa; and Fortune Network Marketing (UK) Limited of Berkshire.

Among the allegations in addition to the pyramid charge is that FHTM furnished “consumers with false and misleading materials for recruiting more participants.”

Twitter was used to push the scheme, with one affiliate claiming, “Bring ur friends & learn how 2 make $120K aYR,” the FTC charged.

“At its 2012 national convention in Dallas, FHTM called its top 30 earners to the stage to present them with a mock-up of a $64 million check, which several of them shared as a photo on social networking websites,” the FTC said.

In the FTC’s complaint released today, the agency said FHTM has been operating an illegal pyramid scheme “since at least 2001.”

“FHTM’s complicated and convoluted compensation plan ensures that the vast majority of FHTM’s Reps make little or no money,” the FTC said.

Evans, the receiver, has broad experience. He is the receiver in the alleged Jeremy Johnson Internet fraud case, and Evans rose to national prominence as a liquidator in the Bank of Credit and Commerce International (BCCI) case in the 1990s.

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15 Responses to “FTC, 3 State Attorneys General Move On Fortune Hi-Tech Marketing (FHTM) Amid Pyramid Allegations; MLM Site Now Resolves To Court-Appointed Receiver’s Page”

  1. Will Craddock now also fight the FTC, as he helped FHTM shut down one of its critics? :D

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  2. At least they didn’t call it a PONZI !!!!!!!

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  3. This could be a Zeek-class case (emphasis added below):

    More from Kentucky Attorney General Jack Conway:

    “After our office began reviewing the documents, we believed that Fortune Hi-Tech Marketing was operating a massive pyramid scheme that involved more than 100,000 people across the United States and in several other countries. We think damage to consumers could be in the HUNDREDS OF MILLIONS of dollars.”

    Added North Carolina Attorney General Roy Cooper:

    “Operations like this claim to offer career success and high earnings. But the reality is that only the few at the top make money, and they make it at the expense of new recruits who end up losing.”

    Lots of readers will remember Cooper from the Zeek Rewards case. (Cooper’s office was taking a look at Zeek even as the SEC brought the Zeek Ponzi action in August 2012.)

    Illinois also is on board the FHTM action:

    “The perpetrators of this pyramid scheme promised big returns, but instead delivered significant losses for thousands of families in Illinois and all across the country,” Illinois Attorney General Lisa Madigan said. “In collaborating with our state and federal partners, we’re seeking to bring the full force of the law against this entity to ensure that it is put out of business for good.”

    What’s interesting about this is that FHTM has used its ties to at least two former state attorneys general in marketing materials — even as the FTC says FHTM has been a fraud since 2001.

    That’s reminiscent of the situation in Utah involving Jeremy Johnson, who gave campaign donations to former Utah AG Mark Shurtleff and now also claims a tie to current Utah AG John Swallow.

    So, it’s pretty clear that some MLMs or IM companies are looking to former or current politicians to plant the seed that all is OK because the pols are on board.

    There was an element of that in the ASD case, too, with Andy Bowdoin/ASD planting the seed that then-President George W. Bush was on board. Some “UltimatePowerProfits” reps are doing that now with President Obama. Of course, the Mantria Ponzi scheme traded on the names of President Clinton and some of America’s top business titans.

    As noted above, the Johnson receiver also is the receiver in the FHTM case.

    Patrick

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  4. K. Chang: Will Craddock now also fight the FTC, as he helped FHTM shut down one of its critics?

    There does seem to be the beginnings of a cottage industry springing up in which participants or consultants for schemes try to take critics out of play with lawsuit threats, website takedown threats and other forms of menacing.

    One dot the great MLM defenders don’t seem to connect is that these practices look like strong-arm bids. The interesting thing with respect to Craddock’s Zeek-related actions is that they appear to have occurred AFTER Zeek was on AG Cooper’s radar in North Carolina and also on the SEC’s radar.

    Setting aside the legal issues, it is just godawful PR for MLM. In Zeek’s case it was even worse because after Craddock did his handiwork, the company announced on its Blog that certain “North Carolina Credit Unions” were slandering Zeek.

    FHTM had trouble in Montana, North Dakota and Texas — and now it’s clear that it was on the radar screens of the FTC and at least three other state attorneys general.

    Patrick

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  5. You have got to be kidding me. Any of you that compared FHTM to Zeek should be ashamed to even have an opinion. I make my living with FHTM and very soon you will be informed of the truth…stay tuned!!!! Lance

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  6. FHTM has been trying to take out the whistle-blower that originally exposed the fraud and pyramid scheme since 2010. They filed bogus lawsuits to intimidate him. They lied to the judges just like they lie to all of the participants in the scheme. The are master manipulators of the truth. “Skapegoat”, the memoir will be released this summer and is a tell all of how FHTM and their high priced attorneys attempted to destroy Mr. Isaacs emotionally, financially and then physically by harassing him into having multiple heart attacks. They have posted lies about him and has worked as diligently on discrediting his reputation as theyhave on destroying the financial means of the hundreds of thousands of their victims over the years. The Orberson ego borderlines insanity.

    This would make a perfect “American Greed” story. A documentary is aready planned for Summer 2013.

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  7. What does Craccock have to do with FHTM?

    K. Chang:
    Will Craddock now also fight the FTC, as he helped FHTM shut down one of its critics? :D

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  8. Mr. Isaacs,

    The question should be “What does Craddock have to do with ANYTHING??” He inserts himself into things like an out of date suppository.

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  9. Joe,

    Robert Craddock’s previous ~legitimate~ MLM experience was with FHTM and it seems he did odd jobs for them as well. In the last month or so Troy Dooly changed the software his MLM Help Desk website uses and I can no longer find the statement on his site but if you put “Robert Craddock” and “Joe Isaacs” (both in quotes) into a Google search it will still return a blog post Troy made on August 25th of last year which once included the following among Robert’s work experience:

    “.,..2011 Help FHTM deal with Joe Isaacs in his quest to post false information including filing UDRP complaints to remove fhtmclassaction[dot]info fhtmclassaction[dot]in fhtmscamnews[dot]com…,.”

    In that same Google search you’ll find a link to a post K.Chang made the next day on RealScam dot com quoting Troy. K.Chang was another of Robert’s take down targets when a HubPage critical of Zeek Rewards authored by Kasey was briefly taken offline.

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  10. Thanks for this, Glim.

    Patrick

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  11. Joseph Isaacs: What does Craccock have to do with FHTM?

    If you *are* the real Joe Isaacs, Craddock was the one who files the UDRP motions shutting down your fhtmclassaction and such websites. For who I don’t know, but he claimed he did it to various people. For a while he also masqueraded as a FHTM rep on LinkedIn and such.

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  12. He may have filed UDRP protests but they weren’t against Joseph Isaacs as I never owned those websites. My information can be clearly found at http://www.joseph-isaacs.com

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  13. Jo i was a top 20 leader in fhtm.
    Goto my email [deleted by Admin]
    We NEED TO TALK
    GOT SOME STUFF YOU NEED TO KNOW

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  14. Has anyone taken a look at the latest findings that Robb Evans and Associates has published on FHTM’s website? Incredible and confirms that the focus was on recruiting. Also shows the high drop out rate and the high % of people that didn’t make money.

    http://www.robbevans.com/pdf/fortunereport01….

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