Fortune Hi-Tech Marketing shut down as pyramid scheme
ReutersWASHINGTON--Federal and state regulators on Monday shut down direct-sales company Fortune Hi-Tech Marketing following complaints that the company was operating a pyramid scheme.
January 30, 2013, 12:07 am TWN
Fortune Hi-Tech, which promoted itself as a way for average people to achieve financial independence, had recruited people to sell products made by Dish Network, certain cellphone providers and Frontpoint Home Security, the U.S. Federal Trade Commission said. It also sold a range of health and beauty products.
The company's distributors earned very little for selling goods and services and made more for signing up additional sales people, Kentucky Attorney General Jack Conway said after a raid on its Lexington, Kentucky, offices.
“Legitimate firms work the other way,” he said. “This is a classic pyramid scheme in every sense of the word.”
Law enforcement estimated that 100,000 people across the United States had been affected by the scheme. In some areas, including Chicago, the scheme targeted Spanish-speaking consumers.
Most paid US$100 to US$300 in annual fees and some paid additional money to be eligible for sales commissions and recruiting bonuses.
The FTC and the states of Illinois, Kentucky and North Carolina filed a complaint against Fortune Hi-tech Marketing on Thursday. A judge granted a temporary restraining order requiring the company to be shut down.