FHTM Ordered to Pay Nearly 1 Million to Settle Pyramid Allegations

• Posted by System April 22, 2010 - Filed in Archive - 295 views
  Helena- Kentucky-based Fortune Hi-Tech Marketing (FHTM) agreed today to pay nearly $1 million to settle an allegation by Montana Commissioner of Securities and Insurance Monica Lindeen that the company was operating a pyramid promotional scheme in Montana. On March 4, 2010, Lindeen ordered the company to stop operations in the state and filed an action against the company, arising from consumer complaints that her office received and investigated. ?This agreement sends a clear message to businesses operating illegally in Montana that I am committed to protecting consumers,? Lindeen responded. ?Montanans work hard to support their families and I will not tolerate the sale of false promises to them.?

  The Order and Proposed Action alleged that FHTM representatives were marketing the company as income potential to participants who agreed to recruit new participants. Those individuals were asked to pay $299 to join the program. FHTM representatives also lured new participants by claiming it offered huge income opportunities through partnerships with large companies such as Travelocity, General Electric, and The Home Depot, when such partnerships did not exist.

  Details of the Consent Agreement and Order with Fortune Hi-Tech Marketing (FHTM):

  ? FHTM agrees to refund up to $840,000 to more than 3,400 Montana participants.

  ? FHTM and the company?s founders, Thomas Mills and Paul Orberson, will pay a fine of $100,000 to the Montana?s general fund. Dianne Graber, a Montana FHTM representative, will pay a $5,000 fine to the general fund.

  ? FHTM will contribute $50,000 to the Investor Protection Trust, a non-profit organization that provides investor education in Montana.

  ? In addition, FHTM will be required to change its business practices in Montana:

  -New participants in FHTM will only be required to pay $75.00 to become a representative,

  -FHTM will conduct training seminars along with representatives of the Commissioner?s Office, in Billings, Bozeman, Great Falls, Helena, Kalispell and Missoula, and will conduct web-based training that is mandatory for all current or prospective representatives,

  -FHTM will provide a disclosure brochure to each current and prospective representative outlining FHTM?s program, including the average amount of income achieved and the average amount of time in the program required to reach each level,

  -FHTM will reinforce with representatives that product sales are not primarily for self-consumption but for sale to non-participants, and

  -FHTM will require its representatives to maintain records of non-participant customers and submit those records on a monthly basis.

  Approximately two weeks from the settlement, Montana FHTM representatives entitled to refunds will be receiving letters from Commissioner Lindeen outlining the requirements to get their money. The refund amount is equal to the participants? cost less any earnings they received from FHTM.

  The settlement agreement can be found at www.csi.mt.gov. For more information about FHTM, call the Montana Commissioner of Securities and Insurance at 1-800-444-2040