Montana says Fortune Hi-Tech Marketing (FHTM) is a pyramid scheme
This makes the second time in the last few months that Fortune Hi-Tech Marketing’s legal status has been questioned.
The first time, it was the North Dakota Attorney General. It appeared to be a minor infraction and was quickly cleared up.
The language in this report looks a lot different. The Kentucky.com web site reported on the action by the state of Montana Auditor’s office on Tuesday March 16, 2010…
Montana has banned a prominent Lexington network marketing company from the state after a five-month investigation found that the company is an illegal pyramid scheme.
Former Danville basketball coach Paul Orberson is the founder and owner of Fortune, which has received as much $1.9 million from Montana residents. The company is prohibited from doing business there until there is a hearing or settlement, said Jackie Boyle, spokeswoman for the Montana Auditor’s office.
“Basically a lot of the claims they’ve been making are false,” Boyle said.
Fortune has about 160,000 representatives in the U.S., Canada and Great Britain, according to Orberson. To become a Fortune representative, the literature says, a person pays the company $299, then sells services such as the Dish Network and True Essentials vitamins while recruiting a sales force of their own.
The person at the top of the pyramid receives commissions from each sale and each new membership. It’s legal, Fortune officials say, because they sell products. However, the Montana authorities disagree.
“FTHM is not a multi-level distribution company but rather a pyramid promotional scheme because the compensation each participant in the program receives is derived primarily from obtaining the participation of other persons in the program and not the sale of goods and services,” the cease and desist order says.
Out of 17 witnesses interviewed in Montana who signed up with fortune, only two made more than the $299 they paid to join the company. There are 1,300 people represented in the complaint, Boyle said.
“Recruitment has happened very quickly here,” she said. “We’ve been getting a number of calls just in the past week, so that number could potentially grow.”
The Montana order also names Diane Graber, an “executive” for Fortune in Billings, Mont., who allegedly earned at least $65,458 through 2008 through Fortune.
The last statement above is the most sobering but important to know. Sometimes the legal authorities go after top distributors!
Without rendering an opinion on this particular case, clearly, it is our responsibility also to know the difference between legal MLMs and illegal pyramid schemes. It’s not always easy since the illegal pyramids most often try very hard to look like legal multilevel marketing companies.
Read more from the Kentucky.com site.
See also, “Related Posts” below.
- Fortune Hi-Tech Marketing Hit with Class Action Suit
- Fortune Hi-Tech Marketing (FHTM) under Attack Again
- Fortune Hi-Tech Marketing (FHTM) Settles with Montana Regulators but Disagrees over Headline
- Cease and Desist Order issued against Fortune Hi-Tech Marketing
- Fortune Hi-Tech / FHTM Facts, News and Reviews