Fortune High-Tech Marketing Inc. (FHTM), the Kentucky-based MLM firm that has caught the attention of multiple state regulators, has agreed to pay Texas customers up to $1.3 million in refunds, the office of Texas Attorney General Greg Abbott said.
But do not tarry if you’re a Texas resident and believe you were ripped off by the firm. Although Abbott’s office formally announced the refund program yesterday, the deadline for filing a claim is Nov. 28 — only 12 days from now.
Here is a PDF the claim form, which Abbott’s office says must be submitted to FHTM. In an “Assurance of Voluntary Compliance” between FHTM and Texas (signed in July), the address for the firm is listed as 880 Corporate Drive, Suite 300, Lexington, Kentucky 40503.
FHTM, according to the agreement, also consented to pay the attorney general’s investigative costs of $200,000.
The firm and its operators “deny that they have done anything wrong and insist that they have not violated any law,” according to the agreement.
Among the terms of the agreement was that FHTM shall “remove all references to FHTM ‘University’ from its marketing materials and website.”
FHTM has contacted Texas customers by email to let them know they might be eligible for refunds, Abbott’s office said. The most recent email was sent on Oct. 28, according to investigators.
“Fortune Hi-Tech’s customers complained that the defendant falsely represented the earnings they would achieve if they became one of the defendant’s independent representatives,” Abbott’s office said.
The settlement agreement announced yesterday “prohibits Fortune Hi-Tech from engaging in deceptive trade practices in the future and requires the defendant to refund up to $299 to each qualified Texas customer, up to a total of $1.3 million,” Abbott’s office said.
A Texas jury has found that a debt-repair company with an MLM component engaged in deceptive trade practices and committed more than 1,400 violations of state law. The jury returned a verdict of $13.8 million.
BULLETIN:
UPDATED 10:03 P.M. EDT (U.S.A.) A jury in Harris County, Texas, has thrown down the gauntlet to hucksters targeting financially strapped consumers by finding more than 1,400 violations and returning a spectacular verdict of $13.8 million against a purported “debt repair” firm that had a multilevel-marketing component.
The jury, which found that the accused firms engaged in deceptive trade practices and were required to register under the Business Opportunity Act but did not do so, assessed a penalty averaging $9,732 for each of 1,418 violations it found, bringing the total to $13.8 million.
In announcing the verdict, the office of Texas Attorney General Greg Abbott published the jury’s actual findings that outlined the violations and the spectacular financial penalties against the defendants. The jury not only awarded the state $342,590 to handle the cost of bringing the prosecution, but also awarded $38,880 to apply to the state’s costs if the verdict was challenged in the Court of Appeals or the Texas Supreme Court.
As part of the verdict, the panel specifically found that Jubilee Financial Solutions LP, Jubilee Financial Management LLC and Robert M. Lindsey did not register the purported “business opportunity” with the Texas Secretary of State as required when the “initial consideration” involves more than $500 and customers believe they will earn or likely will earn a profit by paying the fee.
Jubilee Financial Solutions did business as The Credit Card Solution (TCCS).
Prosecutors said Lindsey and the companies — along with another entity known as the Freedom from Debt Alliance — “used illegal ‘debt invalidation’ schemes that purported to help financially struggling Texans.”
More than 700 people paid an “average” of $3,000 for the fraudulent services, and emerged “worse off financially after paying TCCS,” prosecutors said.
“Under state law, multilevel marketers must register with the Texas Secretary of State and obtain surety bonds in order to lawfully operate in the state, but the defendants failed to do so,” prosecutors said.
Read more about the Texas Business Opportunity Act and registration requirements here.
Fox News 11 in Los Angeles visited YouTube to collect information for an investigative report on NarcThatCar, also known as Crowd Sourcing International.
A company that recruits members to record the license-plate numbers of cars for entry in a database now has drawn the attention of the attorney general of California, Fox News 11 in Los Angeles is reporting.
Although it previously was known that Texas Attorney General Greg Abbott was working with the district attorney of Henderson County, Texas, in a Narc inquiry, Fox News 11 became the first outlet to report that California Attorney General Jerry Brown also is seeking information on the firm.
Narc That Car, which recently changed its name to Crowd Sourcing International, was the subject of an investigative report by Fox 5 in Atlanta last week. The Atlanta station interviewed Georgia Attorney General Thurbert E. Baker, who raised questions about the manner in which Narc purportedly was verifying license-plate data through the state’s Department of Driver Services. The station shared video with the Fox station in Los Angeles, which has video from its own investigation into Dallas-based Narc.
As part of its Narc report, Fox News 11 (Los Angeles) aired video from a YouTube sales promo by former Narc promoter Jeff Long, who jumped ship earlier this year and threw in his lot with Data Network Affiliates (DNA).
It is possible that DNA could become part of any government probe that evolves in California, Texas or Georgia because the firms are known to have promoters in common and because of claims made by promoters.
DNA, which uses a Cayman Islands address in its domain registration and a free gmail address from Google to conduct customer service, purportedly is a competitor of Narc. Long started out by pitching Narc, instructing prospects in a YouTube video to record plate numbers on their cell-phone cameras as they strolled through Walmart parking lots, according to his YouTube video.
But Long then switched to promoting DNA, according to the YouTube site.
“This video talks about NARC That Car… IF YOU ARE PLANNING ON MARKETING THIS BUSINESS ON THE INTERNET DO NOT JOIN!!!!! NarcThatCar CANCELED AND DISABLED My distributorship because I put this video on YouTube…I’m now the #1 leader and sponsor in their BIGGEST COMPETITOR’S BUSINESS…DataNetworkAffiliates. Again…don’t join NarcThatCar if you plan on marketing on the internet!!!!!! JOIN DNA WITH ME FOR 100% FREE!” a screaming message on the website says.
Long, who reportedly went on to become DNA’s largest affiliate, participated in a DNA conference call to tout Narc’s supposed competitor. DNA, which gained a reputation for authoring bizarre communications, suddenly then announced it had gotten into the cell-phone business and was offering an unlimited talk and text package for $10 a month.
Even Dean Blechman, DNA’s former CEO, described some of the communications authored by the company as “bizarre.” Blechman quit in February after only a few weeks on the job. DNA waited nearly a week to announce his departure, then butchered the announcement, Blechman said in an interview with the PP Blog.
DNA claimed on April 26 that it had been snookered into believing that it could offer an unlimited cell-phone usage plan for $10 a month and withdrew the offer. The withdrawal — and the ceaseless hype that has emerged from DNA — has led to questions about what, exactly, the company is offering and whether it was engaging in bait-and-switch tactics.
Questions also have been raised about the worth of both the Narc and DNA databases. Long, for example, said he gathered extra license-plate numbers and offered them for free to prospects so they could qualify for their initial multilevel marketing (MLM) payouts by entering data he supplied.
Other Narc promoters have used the same approach, which could lead to a polluted data stream. If a promoter in Florida supplied plate numbers to a prospect in Alaska, for example, it could lead to a result in which a car sighted in Florida was listed in Narc’s database as having been sighted in Alaska — or any state the prospect chose.
Such an approach could undermine Narc’s claim that it exists in part to assist law enforcement and the AMBER Alert program for missing children. Experts say corrupt or untimely data actually could hinder efforts to locate abducted children, and the Justice Department, which manages the AMBER Alert program, has denied it has any affiliation with Narc — despite promoters’ claims to the contrary.
Even if a Florida sponsor, for example, provided an accurate address at which a car was sighted, the mere fact an Alaska prospect was asked to input the data as though he or she actually had seen the car in Florida leads to troubling questions about whether Narc members were simply gaming the system to earn commissions.
And there may be other questions in any probes that emerge: Are police officers — off-duty and on-duty — helping Narc and DNA collect data? If the officers are collecting data on-duty, is it an appropriate use of their time? If they are collecting data off-duty, are they participating in a pyramid or Ponzi scheme?
Not a single Narc promoter interviewed by Fox 5 in Atlanta could identify a single data client of Narc. Narc itself says its clients identities are proprietary, but the Better Business Bureau, which gave Narc an “F” rating, has received thousands of inquiries on the company. The BBB also said it is concerned about Narc advertising claims.
Some promoters have claimed the firm was endorsed by the FBI and the Department of Homeland Security. Others have claimed it was endorsed by AMBER Alert. Narc removed a reference to AMBER Alert from a sales video after the Justice Department denied it had any affiliation with the firm.
Still other promoters have used craigslist to pitch Narc as though the company were a jobs-provider, rather than an MLM opportunity in which members are independent contractors reliant on their ability to recruit new members to make money. Some members even have started .org websites, as though joining Narc was the same as donating to a charity.
Reckless advertising claims have led to questions about whether both Narc and DNA had come into possession of money as a result lies told by promoters. The claims also have caused some MLM observers to wonder if the industry had reached a new low. Despite the uncertainty about both Narc and DNA, promoters are in the field recruiting members. DNA now says its has more than 125,000 members.
This Narc That Car promoters' check-waving video is now missing from YouTube's public channel, after being placed there March 1. The video, however, is said to be available through a private YouTube channel. It is unclear whether Narc That Car asked its promoter — "Jah" of the Cash For Car Plates Blog — to remove the video, which also claimed repping for Narc That Car was like working for the U.S. "Census Bureau."
First, some news: A website titled DeanBlechman.com now resolves to a parked page at the offshore registrar directNIC. As first reported on the PP Blog, the site previously redirected to the website of Data Network Affiliates (DNA).
directNIC is “based in Grand Cayman, Cayman Islands,” relocating from its former base in Louisiana after Hurricane Katrina, according to the firm’s website. directNIC is DNA’s registrar, and also the registrar for the DeanBlechman.com domain and a DNA-associated domain known as TagEveryCar.com.
In a bizarre autoresponder message earlier this week, DNA said it had chosen “privacy” protection for $5 “to prevent management from having to “put up with 100 stupid calls a day,†a source told the PP Blog.
In an interview Wednesday with the Blog, Blechman, DNA’s former chief executive officer, said he was “surprised” to learn of the DeanBlechman.com site, painting a picture that the company was not in control of its own message and had a “back door guy” who was authoring “bizarre” communications.
Blechman did not identify the “back door guy.” Precisely when the DeanBlechman.com domain stopped redirecting to DNA’s website is unclear. It was still redirecting to the site early yesterday, but now is resolving to the directNIC page.
Meanwhile, the PP Blog contacted the office of R. Scott McKee, the district attorney of Henderson County, Texas, yesterday. McKee is training for deployment to Iraq, and was not available immediately to answer questions on his inquiry into Narc That Car, according to a woman who answered the phone.
The woman said it was possible that an assistant prosecutor would contact the Blog, but the call was not returned yesterday.
McKee’s office opened a civil inquiry into Narc That Car (NTC) more than a month ago, turning to the office of Texas Attorney General Greg Abbott for assistance and saying it had received “numerous calls and complaints inquiring into the legitimacy and legality” of NTC.
How that inquiry is proceeding is unclear. Two days ago, the Dallas branch of the BBB reduced its rating on NTC from “No Rating” to “F,” the worst possible rating on the BBB’s 14-step scale that begins with “A+.”
It is possible that NTC could improve its score at the BBB over time, but the score of “F” it holds now was arrived at after the company had been given more than a month to explain its compensation program to dampen pyramid concerns. The BBB also said it asked NTC to “substantiate some claims made in its advertising” Jan. 18. That inquiry remains open.
NTC does not publish the name of customers of its database product. Some affiliates have claimed the firm was associated with major automobile manufacturers, the FBI, the Department of Homeland Security and the AMBER Alert program.
The company removed a video reference to the AMBER Alert program after the U.S. Department of Justice, which administers AMBER Alert, denied it had any affiliation with NTC.
ASD never improved its BBB score because it became consumed by a government investigation. ASD is implicated by the U.S. Secret Service in a Ponzi scheme.
Speed of Wealth, which also became consumed in government litigation, also did not improve its BBB score. It is implicated by the SEC in a Ponzi scheme involving Mantria Corp., whose BBB rating is being “updated,” according to the BBB. Mantria currently is listed as “No Rating.”
On another matter, MLM aficionado Troy Dooly now is openly challenging DNA officers Arthur Kurek and Donald Kessler to explain what is happening at the company.
Rumors are rampant that Phil Piccolo, a notorious figure in MLM, somehow had become involved in DNA. Absent a firm denial from company management, the rumors continue to fly.
For his part, Blechman, DNA’s former CEO, did not rule out that Piccolo was involved in the firm.
In the absence of a unified message from DNA and plain statements on issues such as whether Piccolo is involved and what steps have been taken to assure that DNA is compliant with state and federal law, events are controlling DNA, not the other way around.
The suggestion that “privacy” protection was chosen so management would not have to put up with “stupid” calls is patently absurd — as is the amount of hype being put out under DNA’s name.
No one at the company has emerged to speak on issues of legality and privacy. DNA says it is in the business of recording license-plate numbers. Like Narc That Car promoters, DNA promoters have made sweeping statements, asserting that affiliates could record plate numbers at places such as Walmart, Target, church parking lots and parking lots at doctors’ offices.
Company conference calls have been cheerleading sessions — with DNA’s own pitchmen leading the cheers.
Whether DNA and NTC affiliates are required to seek permission from owners of private property or the permission of local jurisdictions to record plate numbers remains unclear. Also unclear is how affiliates are required to behave if confronted by property owners or police who question what they are doing.
Sweeping assertions have been made by affiliates that plate data is “public information” available for the taking in the parking lots of large retail stores. One NTC promoter said on YouTube that his wife recorded plate numbers at a university. The PP Blog believes the university was the University of Nevada, Las Vegas.
The office of Sen. Harry Reid, D.-Nev., did not return a call from the Blog seeking comment on the practice recommended by the NTC promoter. Nor did Reid’s office return an email sent by the Blog. Reid is Senate Majority Leader. One of the buildings on UNLV’s campus bears his name. The same NTC promoter recommended “libraries” as excellent sources of plate numbers.
Among the privacy concerns is whether the companies, which appear to be targeting as clients of the database product firms that repossess automobiles, could use the data to create profiles on the movement of people.
In a DNA conference call, one company pitchman said DNA hoped to attract enough affiliates to make it possible for the company to record a plate number at Walmart at noon — and the same plate number at a “doctor’s office” at 1 p.m. and the same plate number elsewhere at 4 p.m. The same pitchman suggested churches were good sources of license-plate numbers.
Adding to the fog of uncertainty is a pattern of strange communications from the firm, which is using Google’s free gmail service to conduct customer service. Emails received by DNA members do not include a street address, which brings issues of transparency into play and potentially brings issues of federal compliance into play.
The PP Blog, which is a Blog among millions of Blogs, has received repeated affiliate spam from DNA and Narc That Car promoters. For weeks, there was no way even to contact DNA to report spam. The Blog will not contact the company via the gmail address — which was made public only days ago –out of concern its email address will be harvested and added to a database controlled by an unknown party.
Narc That Car, meanwhile, has a “Span Policy” — as opposed to “Spam Policy” — link at the bottom of its website. Some of its promoters have produced check-waving videos, including a video that claimed repping for NTC was like working for the “Census Bureau,” a government agency.
One of the videos showed that NTC payments are issued by check drawn on the account of “National Automotive Record Centre Inc.” That entity, which uses the word “National” in its name and the British spelling of “Centre” — as opposed to the U.S. spelling of “Center” — is registered in Nevada. NTC also is associated with a Texas company known as Narc Technologies, which, according to a YouTube video now made private, once issued checks for affiliates.
These things hardly inspire confidence in the NTC enterprise.
Just this morning, the PP Blog received information from a DNA member that the company emailed members, claiming “D.N.A. archived e-mail communications were erased by design.
“We will send you the last 3 e-mail communications within the next 24 hours,” the email said. “If you do not wish to receive D.N.A. Daily Communications please visit your back office.”
Even if the email was perceived by management as a means of demonstrating that DNA was trying to gain control over its message, such a communication only leads to more questions. The email did not include a street address. It also implied that members needed to opt out of communications by doing so within their back offices, rather than opting out by clicking on a link at the bottom of emails they receive.
The hype from DNA and its promoters — dropping names of icons such as Donald Trump and Oprah Winfrey — and making claims that a “MEGA MILLION DOLLAR DEAL with a publicly known industry giant” and a “Top Secret Product” are on the horizon are rubbing some MLM aficionados the wrong way.
MLM has a miserable reputation. Messages from DNA are doing the industry no favors.
If DNA is attempting to seize back its communications apparatus, it needs to explain precisely why it lost control of it early on. And a corporate face must emerge for the company — one who is willing to answer the hard questions on the propriety, safety, legality and privacy concerns the firm is sparking.
For now, at least, it is a tangled web fueled by hype that ducks the issues and causes the company to look silly — day after day.
Bob Guenther has told the Mods and members of the ASD-Biz forum that his previous “Bob Guenther” account had been “compromised.” He announced that he had deleted the “Bob Guenther” account and now would embed a secret code word in posts under his new forum identity, so members would know he was the actual author of posts and not a hacker using his identity to post.
Under the new forum identity “Robert L,” Guenther said he came to the conclusion that someone had hacked his old account after “in depth investigation” revealed “[s]omeone had accessed my account, had my email and my password.”
Meanwhile, in an unrelated but equally strange development, a poster at the Surf’s Up forum threatened to beat up ASD President Andy Bowdoin for lying to him.
“[I]f I ever see you face to face I will knock the f— out of you,” the poster said. “I met you and had breakfast with you and you lied to my face on that Sunday in [M]iami . . .”
Miami was the site of a July 12 ASD rally — a rally attended by federal agents working undercover.
Bowdoin was 74 at the time federal agents seized tens of millions of dollars from the firm a few weeks after the Miami rally, in the opening days of August. The poster who threatened Bowdoin also appears to be a senior citizen. Earlier discussion in the forum suggests the man lost $52,000 by trusting Bowdoin.
The Surf’s Up post, which stood for hours, now has been deleted. The man’s wife, who also appeared to be a senior citizen, was pictured alongside him in a loving pose. Some seniors are none too happy with Andy Bowdoin. The threat, however, was excessive.
No good can come through violence, suggestions of violence or menacing behavior. The man, who said he lives in California, made no threat to travel to Florida to harm Bowdoin.
The ‘Secret’ Code
At roughly the same time Guenther was deleting his old account at the ASD-Biz forum and announcing his secret code, he also was sending an email to this Blog. We deem the email menacing and convoluted.
Guenther is the de facto head of the ASD Members Business Association (ASDMBA) Trust, the subject of some recent posts on this Blog and elsewhere on the Web.
All of Guenther’s old posts at the ASD-Biz forum were wiped away when he deleted his account, including threatening posts and posts that triumphantly announced a slander and libel lawsuit against Florida resident Jack Arons by Dallas-based attorney Larry Friedman, who is the attorney for the Trust.
Bob Guenther introduced Larry Friedman during an ASDMBA conference call last year while ASDMBA was solicting funds to protect contributors’ interests in the ASD case. Friedman now blames Arons for stirring the pot online and encouraging people to file complaints about his handling of the Trust’s affairs, claiming Arons is a felon and a menace.
Links to the slander and libel lawsuit were posted in the ASD-Biz forum under the “Bob Guenther” identity, which now is wiped away. Also wiped away were goonish threats from “Bob Guenther” that Friedman would sue other people.
Here are two questions an investigator might ask if considering recent developments concerning Guenther:
Who could derive a benefit from the claim the “Bob Guenther” identity at the ASD-Biz Forum was compromised by a hacker?
Who could derive a benefit by deleting the “Bob Guenther” account and thus deleting the posts associated with it?
Friedman immediately should fire the Trust as a client and disassociate himself from Bob Guenther. He also should report this matter to law enforcement. These acts are disturbing and too unnatural to ignore.
Some people said they saved copies of the old posts, anticipating that the account might go missing. Some ASDMBA members said they filed complaints with the Texas Bar and the office of Texas Attorney General Greg Abbott about the manner in which the Trust’s affairs have been handled.
Secret code? Guenther could post something inflammatory, not include the secret code — and then claim someone else is the author because the post didn’t include the secret code.
A secret code is proof of nothing. The notion itself strains credulity at a level that cannot be ignored.
Along those lines, a claim by Guenther that he was at a volleyball tournament in Dallas “about the time” an unauthorized poster was using his old forum account and claiming to be heading to Mexico also is proof of nothing. A poster in Dallas could claim to be posting from Mexico. So could a poster from Arizona, at a location near the border with Mexico. (As noted in a previous post, in January we captured an Arizona IP address of Guenther’s near the Mexico border.)
Guenther explained that he hadn’t been to Mexico since 2003 and that “[a]nyone that actually knows me, also knows why.” Again, however, the claim proves nothing . Even a person who claims not to have been in Mexico since 2003 could claim to be posting from Mexico — or anywhere.
Restraint is not a word we associate with Guenther. His lack of restraint is what is driving one of the stories associated with the federal probe into the business affairs of AdSurfDaily Inc. (ASD).
Within hours of establishing a new posting identity at the ASD-Biz forum, Guenther was back to threatening people with lawsuits.
Guenther is the de facto head of the ASD Members Business Association (ASDMBA) Trust. As noted above, ASDMBA was formed with member contributions in the aftermath of the government seizure last summer of tens of millions of dollars from ASD. Federal prosecutors say ASD was selling unregistered securities, operating a Ponzi scheme and engaging in wire fraud and money-laundering.
ASDMBA’s stated goal was to protect the legal interests of ASD members who contributed to the association. People concerned want to know why that hasn’t happened, despite the fact ASDMBA raised more than the $100,000 said to be needed to pay for the retainer of Larry Friedman.
In our view, Guenther has a duty to explain precisely to ASDMBA members from whom money was collected how the money was spent. If he chooses not to do so, he should have no expectation that ASDMBA members will stop asking questions.
Something this basic should not be difficult or painful. In fact, publishing a detailed accounting is the quickest way for Guenther to disarm his critics. Concerned ASDMBA members want sunlight, the best disinfectant. What they’re getting is rudeness, hostility, profanity, tirades, threats and juvenile insults — and now secret codes.
What they’re not getting is sunlight.
Friedman should drop the slander and libel lawsuit against Jack Arons. The filing of the lawsuit was repugnant, especially under these bizarre conditions.
Arons, on Social Security, is an amateur Web critic with a fly swatter. Friedman met Arons with a Howitzer, suing him in a blitz of paperwork and then trying to force Arons to appear in Dallas for a deposition at Arons’ expense with three days’ notice.
It was disgraceful, the stuff from which lawyer jokes are born. All of it flowed from ASDMBA’s lack of transparency. If anything, Arons owes Friedman an apology — if even that.
Friedman has considerable stature in the Dallas legal community — and every right to defend his reputation. This lawsuit doesn’t help. Nor does the behavior of the Trust and its de facto head, Bob Guenther.
Guenther needs people to believe in him now, and he’s doing very little to give them any reason to.
Fortune High-Tech Marketing Inc. (FHTM), the Kentucky-based MLM firm that has caught the attention of multiple state regulators, has agreed to pay Texas customers up to $1.3 million in refunds, the office of Texas Attorney General Greg Abbott said.
