Stenehjem goes after network marketing company

By Nick Rees | Dec 14, 2009


BISMARCK, N.D. (Legal Newsline) - A cease and desist order has been issued by North Dakota Attorney General Wayne Stenehjem against a Lexington, Ky., company for alleged violations of the state's transient merchant, consumer fraud and home solicitation laws.

The order was filed Thursday against Fortune Hi-Tech Marketing, which claims to offer consumers a "business and compensation plan designed to yield income through network marketing," and its principals, Paul C. Oberson, Jeff Oberson and and Thomas A. Mills.

Stenehjem alleges that Fortune Hi-Tech continued doing business in the state despite being informed that it would need the required Transient Merchant license to do so.

"This business blatantly disregarded our effort to ensure compliance with North Dakota law," Stenehjem said. "This is not the typical response from a legitimate company and its actions must have consequences."

A review of Fortune Hi-Tech's activities is being performed by the Consumer Protection Division. Further violations of the consumer fraud and home solicitation sales laws are expected to be revealed during the course of the investigation.

"I'm concerned about this assortment of violations," Stenehjem said.

Stenehjem has also requested information as to the extent of Fortune Hi-Tech's business transactions in North Dakota, which is to include dates of transactions, customers involved and payments received.

The Consumer Protection Division has also been asked by Stenehjem to review whether Fortune Hi-Tech engaged in any violations of North Dakota's pyramid law, which prohibits pyramid schemes that involve participants paying for the opportunity to receive income primarily from the recruitment of other participants rather than the sale of goods or services.

Stenehjem stated that while there are legitimate network marketing companies, consumers need to be wary of compensation plans that appear to emphasize recruitment of participants over sales of legitimate products or services.

"We are skeptical of these claims to 'make money while you sleep.'" Stenehjem said.

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