CHICAGO (Legal Newsline) - Illinois Attorney General Lisa Madigan announced a multi-state and federal settlement on Tuesday to resolve allegations that the Kentucky-based Fortune Hi-Tech Marketing (FHTM) ran a global pyramid scheme.
In January, Madigan, the Federal Trade Commission and attorneys general from North Carolina and Kentucky filed a lawsuit against FHTM, alleging the company deceived its members by claiming they would earn significant income by selling products and services if they signed up as representatives. FHTM enrolled more than 350,000 program participants, allegedly requiring them to pay significant startup costs and monthly fees to retain their positions with the company.
"This pyramid scheme promised big returns but resulted in significant financial losses for thousands of families in Illinois," Madigan said.
FHTM allegedly told consumers they could get rich if they sold FHTM-affiliated products. Madigan alleged more than 98 percent of participants lost money in the program.
Under the terms of the settlement, FHTM must surrender at least $7.75 million in assets to be used as restitution for affected participants. The settlement also permanently prohibits FHTM, Thomas Mills, the company's owner, and its affiliates from misrepresenting material facts about any product or service and selling or benefitting from the customers' personal information.
The full amount of $169 million will be partially suspended when the defendants surrender their assets. If the defendants are found to have misrepresented their financial condition, the full settlement will become due immediately.