FHTM Operators Settle, Agree to Pay $7.75 Million To Former Customers
Operators of Fortune Hi-Tech Marketing, the pyramid scheme shut down by the government at the beginning of 2013, have have agreed to pay $7.75 million to former customers. The settlement with the Federal Trade Commission and the states of Illinois, Kentucky and North Carolina also stipulates that FHTM officials are to be banned from future participation in multi-level marketing businesses.
Kentucky Attorney General Jack Conway spoke about the settlement in this article from Kentucky.com:
“This was a classic pyramid scheme in every sense of the word,” Conway said in a news release. “The vast majority of people, more than 90 percent, who bought in to FHTM lost their money. Today marks the end of one of the most prolific pyramid schemes operating in North America.”
Some concessions were made to the defendants, most notably in that they neither admit nor deny the allegations that FHTM was an illegal pyramid scheme. Furthermore, the $169 million judgment, which represented estimated consumer losses, was reduced to the aforementioned $7.75 million.
The death of FHTM founder, Paul Orberson, in December, 2013, precipitated the settlement. Thomas Mills, former CEO of FHTM, had this to say:
“The destruction of a decade old business and the subsequent health challenges and passing of Paul Orberson made settlement an inevitable path to resolution,” the statement said. “We deny all of the allegations made by the government in this case. In order to avoid the additional emotional stress and costs of likely years of litigation, we felt it in our best interests and the interests of others to put this behind us and settle this matter.”
In the FTC statement on the settlement, the listed parties banned from future participation in MLMs include “Thomas A. Mills, Fortune Hi-Tech Marketing Inc., FHTM Inc., Alan Clark Holdings LLC, FHTM Canada Inc., and Fortune Network Marketing (UK) Limited”. You can read the official court filings here.