BULLETIN: 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.