by Adam Walser
WHAS11.com
Related:
(WHAS11) - It's been
called the fastest, easiest and cheapest way to own your own business…
Fortune Hi-Tech Marketing, based here in Kentucky, is growing rapidly
worldwide.
The company says average people can quickly make big bucks by selling
products from well known, trusted companies.
But former Fortune managers tell WHAS11 that the company is a pyramid
scheme, where raises and promotions are not based on product sales, but
on recruiting.
FHTM is seemingly turning up everywhere…all over the Internet, on
YouTube and in meeting rooms, auditoriums and restaurants in all 50
states.
An estimated 200,000 representatives have been recruited, mostly at
scheduled weekly gatherings.
In Louisville, they're held at the Fern Valley Inn and at Furlong's
Restaurant.
“You’re gonna get paid $100,000 a year for doing exactly what you do
today,” said Florida Fortune Representative Trey Knight, one of the
company’s top recruiters in a promotional video obtained by WHAS11.
Todd Rowland, a Fortune Rep from Arkansas, claims before a packed
meeting room, “Last month, what I was paid on a monthly basis was more
than I would have been paid in five years coaching at the high school
level.”
The pitches promise fast cash with help from a higher power.
Kevin Mullens, a Pentecostal pastor out of Crawford, FL delivers his
recorded speech inside a church.
He encourages other pastors in the audience to get involved by
signing up members of their congregations.
“The Lord wanted you to be here today,” he says during a recruiting
session under a cross. “Can't survive. Can't pay your bills and all of
the sudden, the Lord opened a door.”
FHTM says you can make money by representing products your family
already uses, like GE, Dish Network, Travelocity, and Home Depot.
“Everyone in this room is familiar with these names on the screen,”
said Woodson Gardner, an Executive Sales Manager from Charlotte, NC, as
she shows a Power Point presentation featuring the names of several
Fortune 500 companies. “Chances are you are already doing business with
them. They factor in your life. They factor in your world.”
But some former representatives we talked to said that the focus of
Fortune Hi-Tech Marketing is on anything but the products.
“They don't even train you in how to sell the product,” said Joseph
Isaacs of Tampa, who joined Fortune in 2009.
“It's a people mill. They just run them through,” said Isaacs.
“Your promotions are not based on product volume. They're not even
based on product sales. They're based on the number of people you bring
in and recruit into the business,” Isaacs said.
Recruitment is a recurring theme.
“When you get your first three people signed up, you will have made
$300, so you're quickly back to even on your investment,” said Rowland,
while pointing to a graph on the screen during his presentation. “Then
we'll teach them the exact same thing and everything necessary to repeat
the process.”
“If you've got 90 people in the room and five of them are guests,
something's wrong. It means you didn't put someone in the car and bring
them,” said Mullens, speaking at the church.
Joseph Isaacs brought plenty of people to meetings, and signed them up
for FHTM. That helped him quickly rise to the level of Regional Manager.
“98 percent of my income came from recruiting others into the
business,” Isaacs said. “I made $16 in residuals in six months.”
Residuals are the payments from the sale of products.
The commissions are as low as one-half percent, according to
Fortune’s pay structure plan.
“If I got switch my own cell phone over, as an example, I make a $1 a
month on my cell phone bill. So I'm making $12 a year. If I switch over
somebody else, I make a nickel a month, so I make 60 cents a year.”
But payments received for recruiting new members range from $100 for
those at the lowest level to $480 for a National Sales Manager.
Former representatives say that the top National Sales Managers can
each make $20,000 on a good night of recruiting, so they constantly tour
the country, speaking at local Fortune meetings.
“He's there for one reason and one reason only. When you get in the
business, the guy makes $400. So the only thing he cares about is your
$400. He doesn't care if you're successful or not. He knows it's a
numbers game,” said Isaacs.
WHAS11 talked to another woman who sold her business to join Fortune.
“I can't tell you how stupid I feel that I fell for this,” said the
woman, who doesn’t want to be named.
“Once I started doing the numbers, I realized something's terribly
wrong here,” she said.
The former Regional Director says Fortune overcharges for many
products.
“I called Allstate and asked them how much this package of roadside
assistance would be. It was $52 a year. Ours was $191.”
Each Fortune representative is required to buy or sell multiple
Fortune products and services in order to accumulate points which allow
them to get paid.
Fortune also charges service fees of up to $30 a month just for
members to receive weekly commission and bonus checks.
That's in addition to a $299 joining fee, a $250 optional training
fee and a $199 annual renewal fee.
Fortune Hi Tech Marketing, headquartered in Lexington, KY, was formed
by Paul Orberson and Tom Mills.
Both made millions of dollars in the now-defunct Excell
Telecommunications network marketing company, which sold long-distance
service in the late 1980s and early 1990s.
“Just this year, there have been three magazines, two cover-to-cover,
plus there's been a book written about Paul, our company, his journey,”
said Knight, showing the magazine and book covers to an audience of
potential recruits.
Knight says in the presentation that Fortune has revenues of $500
Million per year.
Yet the whole operation is based in a suite in a Lexington Office
building that it shares with several other businesses.
According to Fayette County, KY land records, Fortune does not own
the building, which is featured prominently on the company’s website and
in marketing materials.
“If they told you that, the smoke and mirrors would all be gone,”
said Isaacs. “They have to have this big facade that they're this giant
mushroom.”
WHAS11 News recently went to the corporate headquarters try to learn
more.
Adam spoke with Fortune C.E.O. Tom Mills.
Their crew also recorded the interview.
“People, they're having some tough economic times,” said Mills.
“There is the possibility that they're willing to work hard, that they
can come with our company and make some money.”
“Everybody wants that dream to be able to have your own business. Be
able to build something and not have the boss,” Mills said. .
WHAS11 asked Mills about Cease and Desist Orders filed earlier in
2010 in North Dakota and Montana.
The Montana Auditor alleged that Fortune conducted "a pyramid
promotional scheme".
Included in the complaint are letters from many of the alleged
partner companies saying that they have no direct sales agreements with
Fortune Hi-Tech Marketing.
“I have a great deal of respect for the people from both North Dakota
and Montana,” Mills said. “The authorities handled it appropriately in
my mind, and I think we're moving forward and we're still doing business
in their states.”
To continue doing business in those states, Fortune will have to pay
about $1 million in fines and refunds. It will also have to change many
of its business practices, according to Consent Agreements.
“We can't control, even though we try, everything that's said
throughout the country. We're gonna be doing some more concentrated
training,” said Mills.
But Joe Isaacs says he doesn't expect the company to really make
changes.
“It's an endless recruiting scheme, because it never stops. If you
stop recruiting. you don't have any income. You're basically done,”
Isaacs said.
(WHAS11) At 6:00 p.m., we took you inside Kentucky-based Fortune Hi
Tech Marketing.
The fast-growing company sells products and services, but former
members tell us that they made most of their earnings from recruiting
new members.
Fortune is believed to have 200,000 members and revenues of up to
$500 million a year.
But the company has also been the target of plenty of complaints,
from the Better Business Bureau, to the Kentucky Attorney General’s
Office, to consumer protection offices in other states.
By most accounts, Fortune Hi Tech Marketing is thriving.
Its members and recruits fill up hotel meeting rooms, churches and
even auditoriums nationwide; thanks largely to get rich pitches and
relentless pressure to recruit.
“Don’t leave this business! For your children’s sake! For your
wives and husbands,” pleads Fortune founder Paul Orberson in a video.
“Let’s get you in the system right now,” Pentecostal pastor Kevin
Mullens said in a recorded sales pitch. “Get your game plan. Get your
system. Get your business paid off. How soon can you have 5 to 10
people in your house?”
“They announce it at the meetings,” said a former Fortune Regional
Manager that WHAS11 interviewed. “They talk about how much they’ve
grown. Right now, I believe it stands at 200,000.”
But there’s also a growing disillusionment among many Fortune
members. The former Fortune rep quoted above said she sold her business
to join the company.
“It’s not right,” said former Fortune Regional Manager Joseph
Isaacs. “There are a lot of people in a recession that are getting
burned. There are a lot of people who are getting hurt,” said Isaacs.
Isaacs said most of the money he earned came from recruiting dozens
of new members, not from selling products.
“I filed a complaint with the Better Business Bureau of Kentucky.
Two weeks later, I got a letter from Fortune telling me I was
terminated. I wasn’t wanted as a rep anymore and it told me to go
away,” said Isaacs.
They are not alone in their complaints.
North Dakota and Montana both filed Cease and Desist orders against
the company.
In Montana, the state auditor describes the company as a “pyramid
promotional scheme”, in which most members they contacted earned little
or no money.
Fortune had to pay about $1 million as part of a consent agreement
reached last month.
Fortune C.E.O. Tom Mills said those incidents were caused by a few
people who didn’t understand the business.
“We can’t control everything, though we try, everything that’s said
throughout the country,” said Mills.
Mills didn’t tell us much about his company. “I don’t really know
the number of active reps in the country and Canada and the United
Kingdom,” he said.
But when pressed, Mills named his top selling product. “With Dish,
we’re one of their top two or three sellers.”
A letter from Dish’s legal department said the company is not a
partner of Dish, but a third party contractor, which anyone can become.
GE, Travelocity and Home Depot have written similar letters denying
any direct relationship with Fortune.
Some representatives of Fortune claim sales of $500 million a year.
Yet only five dozen people actually work in the rented suite in
Lexington, KY which serves as the company’s headquarters.
Employees there aren’t on the phones talking to customers, but to
Fortune sales reps from all over the world.
“Kentucky’s our home state and it’s a matter of pride and honor that
we stayed here,” Mills said.
The state of Kentucky is now starting to take notice of Fortune,
including the Attorney General’s Office.
“We work in conjunction with federal, state and local law
enforcement, and with agencies at the federal, state and local level,”
Conway said. “We’re aware of the situation. We’re monitoring it.
Besides that, I really can’t say much.”
The Better Business Bureau, which gives the company an “F” rating,
has received more than 40 recent complaints.
“From all I can tell about this operation, it’s primarily about
recruiting other people into the network,” said Louisville BBB President
Charlie Mattingly. “So I would say people should be cautious.”
“Can you make money in this business? No doubt about it,” said Joseph
Isaacs. “You’ve got to recruit tons and tons and tons of people. If
you can’t do that and you want to just sell products, you won’t make
very much at all.”
“…this company, you cannot make an income just on your own by selling
these items,” said the former rep, who didn’t want to be named.
Former representatives said there are constant recurring fees.
From $299 to sign up, to training costs, to website fees, to
mandatory purchases and even charges of up to $30 a month just to get
paid.
They quickly add up to several hundred dollars a year. That’s bad
news for the growing ranks of the unemployed who turn to Fortune.
“People, they’re having some tough economic times and there is the
possibility that if they’re willing to work hard, that they can come
with our company and make some money,” said Fortune C.E.O. Mills.
“Most people that become involved go broke,” said Isaacs.
But a handful of top Fortune managers are also faring well; earning
up to $480 for each new recruit who signs up. Former reps told us that
National Sales Managers can earn tens of thousands of dollars on a good
night.
“The problem with pyramid plans is that the people on the front-end
make money, but the larger number of people on the back-end always lose
money,” said Mattingly.
Only time will tell if Fortune will face more governmental actions or
keep on growing.
“My goal, obviously, would be to be the biggest, best network
marketing company ever,” said Tom Mills.