N.C. AG gets restraining order against alleged pyramid scheme

RALEIGH, N.C. (Legal Newsline) - North Carolina Attorney General Roy Cooper announced a temporary restraining order Monday that will shut down and freeze the assets of an alleged pyramid scheme in Kentucky.

Cooper teamed up with the Federal Trade Commission and attorneys general from Kentucky and Illinois in a lawsuit filed on Thursday in federal court against Fortune Hi-Tech Marketing. Also named in the lawsuit was the company's principal, company president Paul Orberson and company vice president Thomas Mills. FHTM allegedly recruited more than 100,000 participants.

"Operations like this claim to offer career success and high earnings," Cooper said. "But the reality is that only the few at the top make money, and they make it at the expense of new recruits who end up losing."

FHTM claimed that participants could earn tens of thousands of dollars a year by buying into an operation to sell home security systems, satellite television service, beauty products and other consumers services and goods. After paying $249 to join FHTM and paying an additional $130 to $400 for sales commissions and bonuses, nearly every consumer who signed up lost money to the company.

The people who did earn money did so by recruiting others to join the scheme.

"This is a classic pyramid scheme in every sense of the word," Kentucky Attorney General Jack Conway said. "The vast majority, more than 90 percent, who bought in to FHTM lost their money."

U.S. District Court Judge John W. Darrah issued a temporary restraining order against FHTM, requiring the company to immediately cease operations and freezing the company's assets.

The multi-state lawsuit seeks a permanent ban on FHTM's operations, civil penalties and refunds for consumers duped by the scheme.

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