Some Fortune Hi-Tech Marketing members defiant after court-ordered shutdown [Lexington Herald-Leader]
(Lexington Herald-Leader (KY) Via Acquire Media NewsEdge) Jan. 30--Federal and state authorities may have shut down Fortune Hi-Tech Marketing for allegedly operating as an illegal pyramid scheme, but some of its members are staying defiantly busy as they plan sales meetings, pray together and put out petitions.
On Twitter, many members of Lexington-based Fortune Hi-Tech have been chatting about a certain reopening of the company, often ending tweets with "FHTM Strong!" or "#enemywillnotwin."
"Right now we're having to console each other because there's a lot of people who really love this company," said Dennis Sparks, a Fortune Hi-Tech representative from Stoneville, N.C., one of a sales force of roughly 100,000 people.
On ipetitions.com, 24 people had signed a petition by Wednesday afternoon "in support of Fortune Hi-Tech Marketing and founder Paul Orberson against the overreach of the Federal Trade Commission. FHTM is not a get rich quick or pyramid scheme. It is however an incredible opportunity for people who are not afraid of hard work and want to help others."
Kentucky Attorney General Jack Conway, the attorneys general of Illinois and North Carolina, and the FTC have asked a federal judge to permanently close Fortune Hi-Tech because they say it rewards people financially for recruiting new sales people rather than selling products, which range from security systems to organic vitamins.
On Monday, Orberson released a statement to Fortune Hi-Tech members saying he expects the company to be fully exonerated.
"This is a process and we will be defending ourselves vigorously on Thursday, February 7," in U.S. District Court in Chicago. "While operations are now temporarily suspended we truly expect to be vindicated."
The lawsuit against Fortune Hi-Tech contends that more than 90 percent of the consumers who paid from $99 to $249 to join the multi-level marketing company lost their money.
In most network marketing groups, people who join early make more money because commissions automatically flow to the early members of a pyramid-shaped sales force. About 94 percent of Fortune Hi-Tech members quit after one year, and 99 percent of members are at the lowest two levels of the company, Conway said.
The company's headquarters on Corporate Drive in Lexington and its warehouse in Danville were put into receivership Monday, which forbids sales and recruiting. However, according to tweets sent by some of Fortune Hi-Tech's top people, meetings are still scheduled to tell potential members about the company.
On Monday night after Fortune Hi-Tech was shut down, Thomas Mills, one of the company's executives, tweeted, "I will be at the Blacksburg VA Training Center Thursday @7pm!! Important Training & Planning Session! Get your Teams there!!"
On Tuesday, Fortune Hi-Tech member John Cardwell of Bluefield, W.Va., said he would hold a conference call with "presidential ambassadors" Todd Rowland and Ken Bailey "for our teams on Wednesday at 9 p.m. Details coming soon."
Sheryl Orberson, wife of Fortune Hi-Tech founder Paul Orberson, tweeted about a "Power Up with God" conference call she held on Tuesday, and has also tweeted about another call scheduled for next Tuesday.
People can talk and hold meetings as much as they want, said David O'Toole, a staff attorney with the FTC based in Chicago, where the federal case will go to court.
"We'd heard there was some activity, but I told the receiver (Robb Evans and Company), and they're confident that no one is getting signed up because the company no longer exists," he said.
All sales are routed through the Fortune Hi-Tech website, which now is redirected to Robb Evans and Company instead.
O'Toole said he would probably seek contempt charges if he found that company representatives were still taking money from prospective members.
"I suspect there's a lot of support group stuff, they're commiserating with each other," he said.
It's not yet clear who will be representing the company in court. The case is sealed, although the initial complaint was distributed to news media and posted online on Monday.
According to past Fortune Hi-Tech news releases, the company's advisory board includes two former attorneys general, Robert Stephan of Kansas and Chris Gorman, who was Kentucky's attorney general from 1992 to 1996.
Sparks said state and federal officials have been misled by complaints from people who didn't do well in the company.
The company's leaders are "very trusting people and they were blindsided here because they had taken very proactive steps with these agencies to be way above reproach in making sure we were meeting all laws and obligations," said Sparks, who has been with the company for four years.
Sparks agreed with government estimates that Fortune Hi-Tech makes about $30 million a month but thinks only about $600,000 of that comes from membership fees. The rest comes from selling services and products, he said.
"As the economy tanked this company saved my life, not just financially, but emotionally and physically," Sparks said. "This little $249 business saved my family. It put me around positive people and it gave my family hope."
Officials with Conway's office said he would be represented at the Feb. 7 hearing by Todd Leatherman, the attorney general's director of consumer protection. FTC attorneys will be making arguments in open court.
Kentucky Attorney General Jack Conway and Steve Baker of the Federal Trade Commission discuss Fortune Hi-Tech Marketing and the pyramid scheme it allegedly operated.
Linda B. Blackford (859) 231-1359 Twitter: @lbblackford
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