FTC Pyramid Cases Post-Amway

In the last 42 years, the FTC has filed 31 cases against MLMs alleging that they were operating illegal pyramid schemes. In all of these cases, the FTC has also alleged that the defendants made false earnings representations. Moreover, of those cases, the FTC filed 19 motions for a temporary restraining order (TRO) and obtained that relief 17 times. It succeeded in obtaining preliminary injunctions in 19 of those cases and in three other cases as well for a total of 22 preliminary injunctions granted. In five cases, a settlement agreement was filed simultaneously with the complaint. In 28 of the cases, the FTC either won on summary judgment or at trial, or obtained a favorable settlement, with most settlements occurring within a year of the FTC filing its case.

Case name (year filed) TRO Obtained Preliminary Injunction Obtained Outcome
 FTC v. Fortuna Alliance, LLC (1996)  √  √  Settled within 1 year
 FTC v. Global Assistance Network for Charities (1996)  √  √  Default judgment within 1 year; others settled within 1 year
 FTC v. Mentor Network, Inc. (1996)   √  √  Settled within 1 year
 FTC v. World Class Network Inc. (1997)  √  √ Settled within 1 year
 FTC v. Rocky Mountain International Silver and Gold, Inc. (1997)  √  √ Settled in approx. 2 years
 FTC v. Jewelway Int’l Inc. (1997)  √  √ Settled within 1 year
 FTC v. Cano (1997)  √  √ 1 default within 1 year; rest settled within 16 mths
 FTC v. FutureNet, Inc. (1998)  √  √* Settled within year
 FTC v. Kalvin P. Schmidt (1998) Simultaneous filing of complaint and settlement
 FTC v. Affordable Media, LLC (1998)  √  √ Granted FTC’s Motion for Summary Judgment; affirmed on appeal
 FTC v. Five Star Auto Club, Inc. (1999)  √  √ Some settled within year; trial verdict for FTC
FTC v. David Martinelli, Jr. (1999)  FTC’s motion denied  √ Settled within year
 FTC v. Equinox Int’l, Corp. (1999)  √  √ Settled during trial after FTC’s case in chief **
 FTC v. 2Xtreme Performance Int’l, LLC (1999)  √ Default within 2 years; others settled within 2 years
 FTC v. Netforce Seminars, Inc. (2000) Settled within 2 years
FTC v. Bigsmart.com (2001) Simultaneous filing of complaint and settlement
FTC v. Streamline International, Inc. (2001)  √ FTC’s unopposed Motion for Summary Judgment granted
FTC v. Skybiz.Com, Inc. (2001)  √  √ Settled within 2 years
FTC v. Trek Alliance, Inc. (2002)  √  √ Settled within 3 years
FTC v. Linda Jean Lightfoot (2002)  √ Settled within 18 mths
FTC v. NexGen3000.com (2003) Default within year; others settled within 2 years
FTC v. Mall Ventures, Inc. (2004) Simultaneous filing of complaint and settlement
FTC v. BurnLounge (2007) FTC’s motion denied  √ Trial verdict for FTC; affirmed on appeal
FTC v. Fortune Hi-Tech Marketing (2013)  √  √ Settled within 16 mths
FTC v. Vemma (2015)  √  √  Settled within 16 mths
FTC v. Herbalife (2016) Simultaneous filing of complaint and settlement
FTC v. Dluca (2018) Settled within 17 mths
(Aug. 2019 Filings)
FTC v. Advocare et al (2019) 4 defendants settled (Advocare/Connolly, the Hardmans); claims against the remaining 2 defendants were dismissed
FTC v. Neora f/k/a Nerium International et al (2019)*** Pending****
FTC v. Success By Health et al (2020) Pending
FTC v. BINT Operations, LLC et al (2021) Pending

*Characterized as a modified TRO

**After the FTC presented its evidence at trial and rested, the case settled before defendant put on any defense case.

*** Neora’s (aka Nerium’s) lawsuit against the FTC was dismissed in August 2020. The complaint, which was filed on the same day the FTC sued the company, alleged that the FTC was attempting to improperly change direct selling laws. In the dismissal order, the court found that the company’s claims were not ripe for adjudication and that the company could properly defend itself against allegations that it is a pyramid scheme in the agency’s enforcement action currently pending in Texas federal court.

**** The FTC’s lawsuit against Neora (aka Nerium), which was originally filed in New Jersey federal court, was transferred to Texas federal court.

Note: This table does not include the action the FTC brought against Kevin Trudeau and Global Information Network in 2003 because the FTC’s formal complaint did not allege that the company was a pyramid scheme and the court never decided the issue.

This article was updated 6/18/2021.

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One Response to FTC Pyramid Cases Post-Amway

  1. Ken K. says:

    º0³ Δ∞8Melaleuca CEO Frank VanderSloot Denies to Lead a MLM Company –

    ” It is my belief, “Frank VanderSloot’s Melaleuca inc., is a illegal pyramid scheme.I’m calling on our federal government for unbiased judicial review and protections, ‘ Summary of penalties sanctions and terminations actions as well as new consumer protection laws. (250m500m+)=(claimed.cc? (cozyAG) Δ∞8https://www.google.com/search?q==malfeasance? Yes, As I See It!

    Here’s what Melaleuca is AS I SEE IT!

    If participants must recruit and buy products to be successful, or if the pay plan’s primary rewards are for building a downline, it should be considered a recruitment-driven MLM, and hence an illegal pyramid scheme. √≡ Melaleuca “NoRecruitNoPay™

    √Recruitment-driven MLM – an MLM with a compensation plan that rewards primarily distributors who recruit huge downlines, and is therefore a product-based pyramid scheme. Updates blogged here ~>https://kenklocke.wordpress.com/ My motivation? (1)Consumer Protection.

    (2) Common law. (3)Constitutional law. (4) A Reckoning.

    kenklocke@gmail.com “confidential” #NoRecruitNoPay™ #FearNoMore™ “The Billion Dollar Question Remains? How Do They Get Away With It?” ~KK #ObamaAdministrationCabinet KK© 2015 All Rights Reserved
    Update added by user Apr 27, 2015
    I coined “Melaleuca’s” compensation scheme –

    (RBI™) Recruiting Based Income.(RBIs™) only pay for recruiting and/or helping recruit.

    Only with recruiting can you potentially be paid on your “MLM.downline group.” “Limited pay on personals, caps apply w/o pandering/recruiting. “Sick huh?

    Hence [NoRecruitNoPay™] Keep in mind my business was a $2’000’000 + annual business…and, I’m sure it still is!
    Now, what a (RBI™) plan pays you w/o recruiting is your-

    (TRI™)True Residual Income.

    I was part of Melaleuca, Inc. for sixteen years – a few of those years actually weren’t all that bad. However, things became very sketchy… . (Meaning: It’s A Mess) & it’s a “DECEPTIVE MLM PYRAMID SCHEME MESS”
    *ºº https://www.google.com/search

    “In 1991 Melaleuca received a cease-and-desist order for violating Michigan’s anti-pyramid scheme laws. https://www.google.com/search….
    *ºº https://www.google.com/search?q=melaleuca+deception

    Google_ Melaleuca politics, scams, frivolous lawsuits, discrimination concerns… lies about not being MLM/ Multilevel-Marketing, Melaleuca’s, cancellation problems and complaints.

    Don’t be a fool like me… research every detail of this _MLM_SCHEME.

    Goodluck, you’ll need it. #KK

    PS. NO DUE PROCESS/ I was terminated/ after 16 years of service – with a phone call by- Alan Pariser -Melaleuca’s top, Outfited/ MLM/ Shill… Then I was threatened, if I exposed the perpetrator- “alan pariser” and/or his company, Melaleuca, Inc. would put a restraining order against me! #GoSellYourRacket #DOJ #DSA

    *ºº https://www.google.com/search
    *ºº https://www.google.com/search… 04.01.16 2:09p
    *ºº http://melaleuca.pissedconsumer.com/
    *ºº http://awumoms.com/sample/index_en.php (AWU/ persented by` Alan D. Pariser)
    *ºº https://www.google.com/search?q=alan+pariser

    ~*~ https://en.wikipedia.org/…/First_Amendment_to_the…

    Ken Klocke “Grounded_Thesis” Copyright KK© All Rights Reserved. ~e~™ http://ic3.gov Terminated by a shameless *Mela_shillº “messenger”

    *ºº https://www.google.com/search?q==senate+vote+on+yelp+reviews
    *ºº https://www.google.com/search
    *ºº http://www.motherjones.com/…/mother-jones-vandersloot…
    *ºº https://www.google.com/search?q=combative+bitter+foe
    impetus~*~ https://en.wikipedia.org/wiki/Common_law

    Melaleuca *convenience *certificates? or convenient ripoff? – Ken Klocke ~e

    “The truth is incontrovertible. Malice may attack it, ignorance may deride it, but in the end, there it is.” – Winston Churchill

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