• Report: #584818

Complaint Review: Fortune Hi-Tech Marketing

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  • Submitted: Wed, March 24, 2010
  • Updated: Wed, May 25, 2011

  • Reported By: Paul O. — Lexington Kentucky United States of America
Fortune Hi-Tech Marketing
880 Corporate Drive Lexington, Kentucky United States of America

Fortune Hi-Tech Marketing FHTM - Paul Orberson - Fraud - Scam - Rippoff - Deceitfull - Lexington, Kentucky

*Consumer Comment: FHTM Screws everyone out of their life

*Consumer Comment: Paul Orberson (FHTM) is a GOD!

*UPDATE EX-employee responds: Another major lie revealed - FHTM gets dumped by Verizon

*Author of original report: Whistleblower fights back after frivolous suit by FHTM for exposing their ILLEGAL Pyramid Scheme

*Author of original report: FHTM ordered to pay $1 Million fine!

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Fortune Hi-Tech Marketing (FHTM) Analysis of Product and Business Model



FHTM is a multi level marketing company that purports to allow you to work directly with well known companies and make lots of money by taking a percentage back from purchases made through your FHTM representative site. In reality, if a representative stops signing people up under them, they will make very little money, as little as .5% on products sold through the site (unless you have eight levels of representatives sign up under you, and you also get a small cut of those under you who sell services or products). [continued below]....

..... The get rich quick portion of the presentation relies on signing up people under you for $299 a person, and getting them to sign others up, as well as pay for training at $250 a person. Note that you also must pay a $199 renewal fee each year, and if you pay for the trainer course, an additional $100 trainer renewal fee. This is a text book example of a pyramid scheme, with a token product line on the side to try and make the business legitimate.

I will analyze some of the products that a FHTM representative can get a percentage back on (.5%), which is supposedly the primary focus of the business (if it is not, it is possibly illegal, so they have to pretend that this is the focus). From research and hearing actual representatives say it, the way to make money is to sign people up under you. One representative I heard from only made $17 in a month through the products, but made much more by convincing others to sign up too.

The whole point of this analysis is to show that the sale of products and services through FHTM is not a way to make large amounts of money, and in fact is offered to try and mask the true source of most earnings, which are derived from the sign up fees of new people joining. Thus the primary purpose of the company is to sign up new representatives, making it an illegal pyramid scheme.

MyTelTag
This is a product only available to Representatives and costs $19.99 a month. So clearly buying this wont make you money as a representative, and in fact will cost you $19.99 a month.

Peter Lamas has a direct affiliate program paying 20% http://www.lamasbeauty.com/affiliate/, that is free to sign up for. So going through FHTM pays you .5%, and signing up for a free affiliate account pays 20%.

Choice Plans RX
This is a FHTM company that they pay Ocenture to set up and run for them. When you go to the website, it has copyright FHTM, but when you look who owns the domain name, all contact emails are to ocenture.com email addresses. If you use this product, remember you are actually buying from FHTM, and be sure to check prices you are paying against a site such as drugstore.com. ChoicePlanRX Price List is available at http://www.choiceplansrx.com/downloads/pricesheet.pdf. A spot check of the price list shows the drug Pegasys for 180MCG/0.5 for $1,482.23. It appears to be available from drugstore.com as a 1ml vial for $651.98. If the 0.5 in the ChoicePlanRX price refers to half a ML, then you pay $2,964.46 for 1ml, while at drugstore.com you can get it for $651.98. I suggest you look at the prices yourself.

Health Card
This product is yet another product that FHTM paid Ocenture to run, and Ocenture uses VantageAmerica Solutions, Inc. to run the card discounts. It looks like FHTM paid Ocenture to rebrand their pre packaged product called MedAffordable. If you want a Medical Card, I suggest you go straight to www.vantageamericasolutions.com so you can work with just one middle man instead of three (FHTM, Ocenture, and VantageAmericaSolutions)

Travel FHTM
This is another service where FHTM paid Ocenture to rebrand and rename their existing product called TrotHop http://ocenture.com/docs/OC_Prod_Travel.pdf, and to set up an affiliate site through Travelocity, to book tickets through an airline. If you buy from TravelFHTM, you are going through three middlemen to reach the airline (FHTM, Ocenture, & Travelocity). Basically this service uses Travelocity, rebranded to look like TravelFHTM, adding on a fee to each ticket. Tickets tend to be $5 $10 dollars more on TravelFHTM than buying straight from Travelocity, you can test this by checking the price for an identical flight through Travelocity and TravelFHTM. Also, in order to offer this product, the representative must pay $49.99

Roadside AutoClub
This is simply a service set up by Ocenture to provide roadside assistance. You can go to http://ocenture.com/PrePackPrograms to look at all the services Ocenture can set up for your organization. It looks like this is what FHTM did.

Ingrid Home Security
The link to this service did not work, so I was unable to assess what this service was. If the link is not working, its safe to say you cant use this service.

Protect America
This appears to be a GE security product that FHTM markets, by going through an authorized dealer, greatalarms.com. So you have 2 middle men, (FHTM and greatalarms.com) As of 2.26.10, the FHTMs site had free* sign up options, but the asterisk beside the FREE does not have an explanation. It should include this: * Standard monitoring agreement required with approved credit. , FHTM is misleading if they dont show the disclaimer. It is not free.

FortuneTV.info
This is a product only available to Fortune Representatives, and so is not a way for FHTM reps to make money.

EZnet Tools
This is a Quick Website Creation Company that welcomes Multi Level Marketing Companies as affiliates. Information about joining EZnet Tools as an affiliate is available at http://www.eznettools.net/reseller/multiunitcorp.html. If you want to set up a simple website, I suggest you use a reputable company like wordpress.com, who can have you online on your own domain name for $15 a year

Dish Network
Anyone can become an affiliate of Dish Network, and be paid $120 per installation, you can become an affiliate here
http://www.vmcsatellite.com/red_design/program_overview.cfm. Compare that to .5% through FHTM, and the best choice is clear.

Magazines.com
You can sign up for free to be an affiliate of Magazines.com, and earn a 35% commission on subscriptions sold. http://www.magazines.com/affiliate/index . Compare that to .5% through FHTM.

The Wireless Shop
One of the most talked about services at FHTM is the wireless shop. This is a website that FHTM uses Simplexity to run. You can buy cell phones and cell phone contracts through this service. Simplexity uses linkshare.com to purchase these services. By going through FHTM Wireless Shop you appear to be using three middlemen (FHTM, Simplexity, and Linkshare). Linkshare can be joined for free by going to simplexitys site which can be joined for free by going to http://www.simplexity.com/Pages/affiliate_main.html# and clicking on Join Our Wireless Program Today Alternately, you can go straight to LinkShare.com http://www.linkshare.com/publishers/join/ and create a free affiliate account, and start earning the full commission instead of the .5% FHTM gives back to their representatives. With this free account, you can earn affiliate money from many companies, a list of which can be found here http://www.linkshare.com/clients/ . So FHTM does not really have a direct relationship with Verizon and AT&T, contrary to the impression given by the company.

The money that is implied to be available to be made to Representatives (as much as $80,000 a month is shown) is derived almost entirely from spreadsheets showing what would happen if you signed up three people at $299 a person, and they each signed up three people, and so on, down to eight levels. The problem with this type of business model, besides possibly being illegal, is that in order for people to make the money they were told they could, they have to continue signing up people. Whenever people no longer sign up, then all of the people at the bottom of the pyramid will lose their money. So even if you can get into a pyramid scheme like this before it collapses, and make money off of signing people up under you, when it does fail, most of the money that you made would have been taken from those under you, and they would lose it. For ethical and moral reasons, I would not want to take other peoples money, knowing that sooner or later the money I make will be lost by someone down the line.

If you are still not convinced that this is not a legitimate business, the North Dakota attorney general issued a cease and desist order against FHTM in December (it has since been lifted).

Update: News Coverage of the Cease and Desist order in Montana available here (thanks to comment below for this info)

Update 2: You can read the Temporary Cease and Desist Order here. It is lengthy, but has a lot of very relevant information.


This report was posted on Ripoff Report on 03/24/2010 04:01 AM and is a permanent record located here: http://www.ripoffreport.com/r/Fortune-Hi-Tech-Marketing/Lexington-Kentucky-/Fortune-Hi-Tech-Marketing-FHTM-Paul-Orberson-Fraud-Scam-Rippoff-Deceitfull-Le-584818. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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#1 Consumer Comment

FHTM Screws everyone out of their life

AUTHOR: fhtmclassaction - (United States of America)

We have also been screwed with this company... we were the "golden child" of NSM Aaron
decker until we went through our list and had nobody else to talk to...then he moved on to someone else that was making him money, My wife lost her job because of FHTM, we have spent money we couldnt afford to spend, eneded up getting cell phones through ourselves for customer points...now we pay a higher cell bill then we did before FHTM, they have changed the pay plan 3 times since we  joined, they are losing companies like AT&T, Dupont, Verizon and lying about why, if you are legit, why do you need to lie? The training sessions after the business presentations is where they entice you with dollar figures, talk about empty promises, Now everyone we know will never talk to us if a genuine company comes along, We were told we could quit our jobs in a year or
so of joining because we would be making so much money...I am so sick and tired of the BS, anytime I had questions about what was going on, I was dissmissed as being negative and they never talk to me again, I have recorded "training sessions" etc. All they do is deceive and lie. We made it to RSM, but quickly ran out of gas, and when they talk about it being a "team effort" everyone helps everyone....yeah, wait till you run out of people and ask for help on how to get more, I was told by Aaron Decker (NSM) "quit crying about it and go find some more prospects". Now I have been discontinued from their phone and text list because we ask questions and
are not bringing new people in. All I want now is to try and get back to where we were before FHTM, I would love to get out of these cell contracts etc and go back to the way we were....can anyone help? We were just happy with our cell service the way it was, I dont like contracts etc, so we were talked into getting phones through our own company for the residuals and customer
points etc, now we pay twice as much in phone bills for the same service and are locked into a contract we cant get out of.

Mike and Jennifer Barrington

P.S. The ex- AG for FHTM, Judy Hammerschmidt was spotted applying for a job at Burger King in Sacramento California yesterday. After losing money in her restaurant venture and now unemployed the near retirement age attorney has no choice left but french-fry making. Hope she gets the job.

 

  
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#2 Consumer Comment

Paul Orberson (FHTM) is a GOD!

AUTHOR: fhtmclassaction - (United States of America)

Fraudulent Scam or real Business Opportunity, you decide

2010,  and the 1st quarter of 2011, have been bone chilling times for the Fortune Hi-Tech Marketing representatives or IRs as known in their world. The owners of this scam continue to take advantage of  1000s of new victims weekly by convincing them into joining as they reap the benefits of a purported $500Million dollar nationwide criminal enterprise. 2010 started off with the Attorney General of North Dakota issuing a cease and desist for operating a business in that state without the proper licensing. That was followed by the Montana Securities Commissioner, Monica Lindeen also shutting them down, but this time, it was for operating as an illegal endless recruiting pyramid scheme. The company was forced to change their business practices (in an attempt to make their business appear to be legal. Can you do that if you were already legal or is that an oxymoron), charge only $75.00 entrance fee (from the then current $299.00) to new Montanans who wished to explore the American Dream through FHTM and refund almost $1,000,000 to the good folks of that state who made no money and wanted a refund of monies paid.

FHTM was also forced to produce (one time only) an income disclosure statement (IDS) which according to industry expert, Robert FitzPatrick who is the President of Pyramid Scheme Alert, is so skewed that it isnt worth the paper it is written on because the figures do not include the almost 30% who did not make even a dime in this business opportunity. Looking at the numbers produced by FHTM itself, over 90% fail.

In talking to FHTM reps, they insist on telling the story that every business is a Pyramid and so is the government. What they fail to differentiate is what is a legal and an illegal pyramid scheme. They go on to explain that 95% of all businesses in America fail and the team they have an opportunity to build in FHTM will produce a lifetime of residual income. FHTM claims that building the Fortune opportunity is a willable, trustable and saleable enterprise, but that is false. They have
coined the phrase, Loyal Customer. In fact, the reality is that when reps drop out of this business (and 90% or better will do so within 6 months) all of those loyal customers are gone along with the residual income. Most sales of products and services are to the IRs that have paid for the right to be part of this business opportunity.

Existing IRs saw multiple compensation changes that were sold to them as a message from God and as another pay raise yet it was merely a way to screw more at the bottom of this pyramid and enrich those that were hand-picked by the self proclaimed King of MLM, Paul Orberson.

In fact there were more than a half dozen compensation changes that occurred in 2010 which somehow parallels the dozen state Attorneys General (IL, TX, SC, NC, CA, KY, ND and MT) that began active investigations into this alleged pyramid scheme. FHTM had an F rating with the KY BBB until November/December 2010, when top leaders in the organization posted bulletins asking for their IRs to report FHTM as a model company which assisted in raising the current rating to a C. What a sham that system is. Self rating goes against the grain of having the BBB in the first
place.

According to Corporate Frauds Watch: Like the bosses, and reality-inverting propagandists, of the 'Amway' mob, the bosses, and reality-inverting propagandists, of the 'Fortune Hi-Tech Marketing' mob have steadfastly pretended that:  Their direct selling company is perfectly lawful and is associated with all manner of trusted household-names in the USA. They cannot be held responsible if some rogue 'Independent FHTM Business Owners' do not obey the company's own rules which oblige them regularly to sell significant quantities of good-value products, and services, to the public for a profit. 

At the same time, numerous dissidents, testify that the 'FHTM' plan for financial freedom is, in point of fact, a dissimulated closed-market swindle, in which unlawful internal payments (in exchange for effectively-unsalable wampum) have been arbitrarily defined as lawful external 'sales.' In this way, tens of thousands of 'FHTM' adherents continue to be deceived into handing over regular  cash-payments to a counterfeit 'direct selling company' controlled by a little gang of sanctimonious racketeers, on the pretext that  anyone can retire from work by being their own loyal 'FHTM ' customer and by recruiting their friends and relations to be their own loyal customers, etc. ad infinitum.

Fortune Hi-Tech has lied about everything in their business presentations since day one including statements about being debt-free, its D&B rating and its business relationships/partnerships with real fortune 100 companies to cover up their illegal ways and to produce the aura that they are some way legal because of these affiliations (Legal by Association). Since 2010 major companies like GE, DuPont, AT&T, Verizon Wireless, Travelocity, Home Depot and Peter Lamas have either run from these relationships or claimed they never existed in the first place including the their demand that FHTM discontinue the unauthorized use of their coveted logos, trademarks and names in presentations and printed materials. Fortune thought it was ok to use the logos of major international enterprises to enhance their own image in order to appear as if they were legal when in fact their entire enterprise is built on misrepresentations. They attempted to tie themselves to Fortune Magazine until ex-representatives revealed the truth, henceforth the recent (end of 2010) disclaimer on the bottom of the FHTM corporate website that now states FHTM is not sponsored by, endorsed by, affiliated with, or otherwise associated with, Time Inc. or Fortune Magazine. For years this company has used the names of famous people to provide evidence of legitimacy, all which were lies http://www.youtube.com/watch?v=DyGaQfDP--c&feature=related

The nightmare for representatives deepened as FHTM was about to hold its national convention in Lexington, Kentucky in September 2010. On the eve of the convention USA Today appeared there to interview IRs and attend its presentations. It was the same day that Fortune, its officers and 40 top distributors were served with its first of two class action lawsuits claiming mail and wire fraud, RICO violations, pyramid scheme and money laundering.

The FHTM outside legal team got an early Christmas present with the filing of the 2nd class-action lawsuit in the Southern District of California on December 22, 2010. This lawsuit mirrors, in many ways, the one originally filed in Kentucky in early September with the addition of multiple violations of California consumer protection laws. The California judge recently sent that case to combine with the Kentucky one.

FHTM has only succeeded in recent years because of the recession and the fact that its top reps in 2004 brought their teams from the defunct Excel Communications (Another MLM that operated in the gray area of the law until it went bankrupt). They were hand-picked by Paul Orberson to be the top reps in FHTM, paid to bring their teams, given large cash bonuses and a back door deal which included a piece of the pie (equity).

They are referred to as the Fab 6 by Paul Orberson. This enterprise will always remain private to hide these side deals and the money made by its founders.

How can representatives in 2011 continue to tout this as the best marketing plan and business opportunity ever when the founders have been caught in so many lies, changed the compensation plan to further enrich those at the top, have such a huge 95%+ failure rate, are being sued in Federal court by ex-reps as well as ex-vendors and have multiple states investigating their illegal ways?

They buy magazine covers, give to charity and self published their own autobiography in an effort to prove legitimacy. Some reps even claim that they are approved to do business in all 50 states. That is far from the truth as no State ever approves or disapproves the business plan of any business.

In 2010 Fortune made a decision to solicit the Latino markets throughout the USA and recruit by promising green cards. They dont care whether the Latino immigrants are legal or not. Anyone can join FHTM if they pay the fees. If you are an illegal immigrant, an unemployed truck driver or just a fool this business is for you. If you dont mind operating an enterprise that never can be willed, sold or profitable - this business is for you. If you dont mind screwing your friends and family to get into a business with you that you know they will lose money in this business is for you. If you dont mind buying or selling overpriced goods and services this business is for you. If you have the ability to tell folks this is your destiny per Gods word this business is for you. If you are a great liar this business is for you.

Most of the revenues created by FHTM reps are made by recruiting others into this Ponzi scheme and not from the residual income as they claim. 80% or better sales are to the reps themselves so they can qualify their business in order to get paid bonuses for bringing in others. This violates the FTC rules and the laws in almost 50 states.
 
In 2011 FHTM was added to the joint investigation by the FTC and individual state AGs Operation Empty Promises. It was recently discovered that many representatives at the Executive and National level are pocking huge sums of cash from presentations and meeting and skirting their obligations to the IRS. This is not only promoted by but is also endorsed by Paul Orberson the self proclaimed highest paid network marketer of all times.

I have attached a disk with copies of all of the pertinent information, recent lawsuits and business presentations. Please help to stop this scam from ruining the lives of another 100K Americans.

For more on this company go to (((Redacted)))


CLICK here to see why Rip-off Report, as a matter of policy, deleted either a phone number, link or e-mail address from this Report.
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#3 UPDATE EX-employee responds

Another major lie revealed - FHTM gets dumped by Verizon

AUTHOR: fhtmclassaction - (United States of America)

Fortune Hi-Tech Marketing loses Verizon Wireless from product offering
Courtesy of Article Monster
http://www.articlemonster.com/busine...-offering.html

So many questions and not enough answers. In a world fighting for customers and companies watching over their reputations like a hawk, what do these companies all have in common? I am referring to major Fortune 100 icons like General Electric, DuPont, Time, Verizon Wireless and AT&T as well as some smaller ones like Travelocity, Peter Lamas and BSP Rewards Mall.

The answer is simple, somehow over the past 10 years and probably unbeknownst to them, they became aligned with a Multi-Level Marketing company known as Fortune Hi-Tech Marketing (FHTM). This was mainly accomplished because Fortune Hi-Tech does business with some of their authorized dealers and 3rd party affiliates. Fortunes attempt to prove its legal by association has backfired,
as it normally does. It is very difficult to build your reputation at the expense of someone bigger, when they have no idea who you are.

Should these companies have a say in who gets to use their brand in the pursuit of the almighty dollar? For the first time in FHTMs history the number of companies represented by it on the menu board at fhtm.net is shrinking. How can that be good?

According to court documents and a major USA Today expose, last September, none of these companies had direct relationships with FHTM.

In March 2010, Monica Lindeen, the Securities Commissioner for the State of Montana, issued a cease and desist against Fortune HI-Tech Marketing for operating an illegal endless recruiting pyramid scheme. Since then Texas has demanded documents in an investigation, South Carolina AG Roy Cooper, has opened an investigation into Fortunes business practices, as part of the FTCs
Operation Empty Promises, and its own home state of Kentucky has done the same.

Two blistering heart pounding class-action lawsuits have pummeled FHTM in 2010 as well. The first was filed in Federal Court in Kentucky in September 2010 and the other in Federal Court in Southern California two days before Christmas last year too. Neither of these lawsuits have been certified as a class yet, and mainly due to some extensive manipulation of the legal system by the Fortune legal team.

What is the cost of that battle? Some estimate legal costs upwards of $500K monthly. That certainly will take a huge chunk out of any business cash flow. Fortune is not the first MLM or pyramid scheme to be involved in major lawsuits. Amway just agreed to pay a record settlement of close to $150 Million. Most top law firms and executives know they cant win these types of suits, and mainstream media leaves a negative impact on their business.

Attorneys have very little defense to RICO and pyramid scheme allegations, and after spending millions trying to defend the allegations, usually make arrangements for settlement conferences. They may win some of the small battles but not the war. What is the depth of the scars these lawsuits leave to deter others to join?

So the important question now remains, why did these huge conglomerates allow their names and reputations to potentially be smeared by a company like FHTM?

The answer is simple - they didnt know what was happening.

According to ex-representative, Joseph Isaacs from Tampa, Florida, When these companies find out that their trademarks, names, logos and reputations are being used by FHTM in order to aide FHTM in proving its legitimacy they will issue a cease or desist, insist on the actions to stop or not allow FHTM to market their products. Which others will walk when they find out the real business model and litigation history of Fortune Hi-Tech?

As of March 2011 every one of the companies listed above has either issued a cease and desist or no longer allows itself to be aligned with Fortune Hi-Tech Marketing. How has this affected their aura of legitimacy? How do they explain all of this to new and even existing independent representatives?

In reviewing some FHTM business presentations on YouTube, it was apparent that the logos of GE, DuPont, Verizon and AT&T were there for one reason. What are the repercussions of only being legal by association? According to Joseph Isaacs, Top leaders would tell prospects during the business presentation that they must be legal because no iconic Fortune 100 company would affiliate with a scam. All of these major companies sent their CEOs and legal teams to meet
with founder Paul Orberson to evaluate FHTM and check out their books. This cannot be so and was nothing more than a lie used to recruit, he added. What rhetoric do these leaders use today to explain the loss of such major brands?

Only time will tell.

Will FHTM leaders and owners blame the latest Verizon fiasco on the reps like they did in their announcement pertaining to DuPont only a few weeks ago? How long will this saga continue? Which other company will research the true business model of Fortune Hi-Tech Marketing and un-align themselves next? It is too early to tell but this story is far from over.

If the massacre continues then Fortune will be nothing more than a vitamin and dog food MLM. That is not very hi-tech and not too many fortunes will be made by affiliation. How much representative revenue has been lost as a result of these major companies walking away? How many current representatives are scrambling to replace so many customer points? How many Regional and Executive managers wont get bonuses because their team points are greatly depleted
because of the latest loss? We searched high and low for the answers but didnt find any.
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#4 Author of original report

Whistleblower fights back after frivolous suit by FHTM for exposing their ILLEGAL Pyramid Scheme

AUTHOR: FHTM - (United States of America)

Whistleblower fights back after frivolous suit by FHTM for exposing their ILLEGAL Pyramid Scheme

Lexington, Kentucky - June 16, 2010 - In light of all of the recent investments scams including the infamous Bernie Maddoff, whistleblowers and those with morals fear that the frauds they expose will result in unjust lawsuits filed against them by the companies they complain about. One such situation was that of the lawsuit filed by Fortune Hi-Tech Marketing against Fortune Social LLC and Joseph Isaacs in May 2010.

 

Joseph Isaacs and Fortune Social, LLC (collectively “Isaacs”) deny each and every claim brought by Fortune Hi-Tech Marketing, Inc. (“FHTM”) in a filing made today with the American Arbitration Association, who is overseeing this case. In addition, Isaacs fights back and asserts his own counterclaim for relief against FHTM, Paul C. Orberson (individually and in his capacity as President of FHTM), Jeff Orberson (individually and in his capacity as Chief Operating Officer of FHTM), and Thomas A. Mills (individually and in his capacity as Vice-President and Chief Executive Officer of FHTM) (collectively “FHTM”). Isaacs counterclaim claim Breach of Fiduciary Duty, Breach of Contract, Common Law Fraud, Unfair & Deceptive Business Practices, Failure to Register Securities, Fraudulent Practices Regarding the Sale of Securities, Civil Racketeering Conspiracy (violation of the Federal RICO statutes) and Defamation.

 

FHTM operates an unlawful product-based endless recruiting pyramid scheme that relies on untrue and misleading representations and unlawful, unfair, and fraudulent business practices. While FHTM purports to be in the business of selling name-brand services like wireless, satellite television, home security, vitamins, nutritional products and travel services, its true business is using consumers to generate fee income for representing non-existent partnerships, major sports figures, and prominent businessmen. To entice consumers to participate, FHTM makes untrue or misleading claims regarding its relationship with Fortune 100 companies like Verizon Wireless, GE Security, Dish Networks and Travelocity to create the illusion that consumers can become millionaires in three to five years.

 

FHTM’s growth exploded when it began to lure consumers disenchanted with traditional jobs and the recession that began in 2007 to inspirational and high-pressure business opportunity seminars touting an innovative business model that promises huge financial rewards through multi-level network marketing. FHTM erring presenters claim to have proprietary tools, special relationships, and other support that allow consumers to grow their own business by partnering with FHTM’s “companies”.


It would not be long before Isaacs (and the world) made several troubling discoveries about FHTM’s business plan and practices that doused his enthusiasm: (1) Paul Orberson had not made any special arrangements with the companies mentioned at the business opportunity/presentation seminar or in the company produced videos; (2) the only way to earn a significant income and be promoted up the ranks was to recruit additional IRs; (3) FHTM had not received regulatory approval for its pyramiding scheme in every state; (4) only a handful of IRs had earned anywhere near the residuals projected; (5) the prominent businessmen, politicians, former attorney generals and sports figures to whom FHTM constantly alluded were in fact IRs actively promoting their own FHTM business; and (6) a growing number of state attorneys general had already begun investigating FHTM in response to numerous complaints.


It turns out that FHTM’s ‘innovative’ marketing plan is nothing more than a face lift to an age-old scheme. According to the FTC’s Consumer Protection Bureau:

Pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public. Some schemes may purport to sell a product, but they often simply use the product to hide their pyramid structure. There are two tell-tale signs that a product is simply being used to disguise a pyramid scheme: inventory loading and a lack of retail sales. Inventory loading occurs when a company's incentive program forces recruits to buy more products than they could ever sell, often at inflated prices. If this occurs throughout the company's distribution system, the people at the top of the pyramid reap substantial profits, even though little or no product moves to market. The people at the bottom make excessive payments for inventory that simply accumulates in their basements. A lack of retail sales is also a red flag that a pyramid exists. Many pyramid schemes will claim that their product is selling like hot cakes. However, on closer examination, the sales occur only between people inside the pyramid structure or to new recruits joining the structure, not to consumers out in the general public.



 Nonetheless, the truth is catching up with FHTM. On December 10, 2009, The North Dakota Attorney General's Office filed a Cease and Desist Order for violation of the Consumer Fraud Law, the Transient Merchant Law, the Home Solicitation Sales Law, and the North Dakota Pyramid Schemes Act. On January 19, 2010, FHTM entered into a Assurance of Voluntary Compliance with the North Dakota Attorney General's Office. On March 16, 2010, the Montana State Auditor's Office filed a Temporary Cease and Desist Order against FHTM, Paul C. Orberson, Thomas A. Mills, and Dianne Graber (a Montana IR). According to the Montana State Auditor's Office, FHTM has engaged in acts or practices constituting violations of the Securities Act of Montana, Montana Code ANN.30-10-101 et seq. On April 22, 2010, FHTM agreed to pay nearly $1 million and to change its business practices to resolve the charge that it is operating a pyramid promotional scheme.



With each passing day, more states are jumping on FHTM’s bandwagon. The alarming rise in consumer complaints and governmental sanctions has prompted the Better Business Bureau of Central and Eastern Kentucky to downgrade FHTM’s rating from “B-” to “F”. At the same time, a proliferation of online bulletin boards and blogs, such as (((Redacted)))and (((Redacted)))criticize FHTM’s pyramid scheme confirms that Isaacs’ experience is not unique. Will those operations be the next target of Fortune’s high price legal team?




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#5 Author of original report

FHTM ordered to pay $1 Million fine!

AUTHOR: FHTM - (United States of America)


FOR IMMEDIATE RELEASE                                                         Contact:Jackie Boyle

Contact: Jackie Boyle, jboyle@mt.gov, 406-444-2040             

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 companys founders, Thomas Mills and Paul Orberson, will pay a fine of $100,000 to the Montanas 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 Commissioners 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 FHTMs 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.

###

FINAL CONSENT ORDER




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