News

Unfortunately, pyramid schemes are rampant in this country, hurting consumers and honest entrepreneurs alike. The following news items only scratch the surface of the problem but they do demonstrate why Congress must pass The Anti-Pyramid Promotional Scheme Act of 2017, to crack down on pyramid schemes, make the marketplace safer for consumers, and preserve the integrity of the 20 million income-earning opportunities created by the direct selling industry.

Mia Love: Protecting Utah direct sellers from pyramid fraud

Mia Love: Protecting Utah direct sellers from pyramid fraud
March 10, 2018

 By Representative Mia Love Sellers deserve to know the difference between a legitimate direct selling business and pyramid schemes, which is why I am supporting legislation to protect these entrepreneurs who are seizing the opportunity to own a small business. I’m privileged to represent Utah’s 4th District, a vibrant, enterprising community that serves as home […]

Myths About Self-Consumption in MLMs

Myths About Self-Consumption in MLMs
February 14, 2018

By Jim Sobieraj, National Law Review Recently, legislation has been introduced in Congress (the Blackburn-Veasey bill, H.R. 3409) that seeks to bring clarity and consistency to activities that distinguish illegal pyramids from legitimate multi-level marketing companies (“MLMs”).  A select few interest groups and certain regulators, who project a bias against MLMs, have spoken out against […]

H.R. 3409 Provides a Long-Needed Federal Definition of a Pyramid Scheme

H.R. 3409 Provides a Long-Needed Federal Definition of a Pyramid Scheme
November 28, 2017

By Robert McKenna, Morning Consult I served as attorney general for the state of Washington from 2005 to 2013. I used my time in office to fight for the security of Washington families and consumers and vigorously prosecuted cases of identity theft, internet fraud and child pornography. I helped lead cases brought by the National […]

Congress should act on direct selling schemes

Congress should act on direct selling schemes
November 17, 2017

By Elizabeth Owen, Commercial Appeal Thirty years as a consumer advocate taught me that it’s sometimes impossible to spot the difference between a legitimate business and a deceptive one. Consumers need help. Tennessee once had the dubious reputation of “travel scam capital of the world.” Companies sent out postcards proclaiming a free vacation; thousands responded. […]

Anti-pyramid scheme legislation is necessary to protect consumers from fraud

Anti-pyramid scheme legislation is necessary to protect consumers from fraud
November 4, 2017

By Mario Lopez, The Hill Today, the Hispanic population in our country has more economic and purchasing power than ever before, and Hispanic small businesses are steadily on the rise. With annual revenues exceeding $660 billion, Hispanics entrepreneurs make up one-fourth of all new businesses in the U.S. Direct selling is one avenue that many […]

H.R. 3409 Will Protect African-American Entrepreneurs

H.R. 3409 Will Protect African-American Entrepreneurs
October 23, 2017

By Harry Alford, Morning Consult With low entry costs and low risk, direct selling, the retail channel where independent contractors sell goods and services person-to-person in homes and other locations outside of traditional retail stores, is flourishing as a means to entrepreneurship. It offers opportunities to communities where they might be scarce, where business investment […]

Keeping shady business practices at bay

Keeping shady business practices at bay
October 22, 2017

By John Bruning, Washington Times Scams affect us all. As Nebraska’s attorney general from 2003-2015, one of my key priorities was safeguarding against scams. In 2010, I helped Nebraska’s Legislature pass a model law to protect consumers from pyramid schemes. Similar laws have now been adopted in 21 states. However, incredibly, there is no federal […]

Protecting consumers and legitimate businesses from pyramid fraud

Protecting consumers and legitimate businesses from pyramid fraud
September 20, 2017

By Orville Thompson, The Hill As past chairman of the Direct Selling Association’s (DSA) board of directors, and CEO of Scentsy, an Idaho based direct selling company, I disagree with Frank VanderSloot’s assertion that H.R. 3409, the Anti-Pyramid Promotional Scheme Act, legitimizes harmful business tactics. I believe his criticism of the bill’s purpose and effect […]

Protecting consumers and promoting entrepreneurship

Protecting consumers and promoting entrepreneurship
August 28, 2017

By Rep. Marsha Blackburn (R-Tenn.), The Hill Every year, far too many unsuspecting Americans fall victim to pyramid schemes. Sold on the hopes of economic freedom that direct selling can deliver, many find themselves stuck with unmovable inventory and mountains of debt. Worse, operating under the guise of a reputable direct selling business, these schemes […]

Anti-Pyramid Scheme Bill Would Protect Consumers and Entrepreneurs

Anti-Pyramid Scheme Bill Would Protect Consumers and Entrepreneurs
August 2, 2017

By Anne T. Coughlan, Morning Consult As an economist who has devoted my academic career to the area of distribution channel design and management, there is no question the direct-selling industry has offered tremendous economic benefits to millions of Americans, consumers and entrepreneurs alike. At the same time, I’ve also seen firsthand the tremendous importance […]

Congress would be right to define ‘pyramid schemes’ at the federal level

Congress would be right to define ‘pyramid schemes’ at the federal level
August 1, 2017

By David Zetoony, The Hill As an attorney who has helped companies, consumer groups and the public understand consumer law throughout my entire career, I was disappointed to read a July 18 op-ed in The Hill criticizing an amendment to the Financial Services and Appropriations bill involving pyramid promotional schemes. The author, Dr. William Keep, […]

Direct selling is no pyramid scheme

Direct selling is no pyramid scheme
July 24, 2017

By Joseph N. Mariano, The Hill We live in an age when consumers can purchase almost any product they want from online retailers and can hail a ride with a touch of their smartphone. Fewer and fewer people are going to their local mall for goods and services they can order online and have delivered […]

Madigan Seeks to Immediately Shut Down Fraudulent Pyramid Operation

Madigan Seeks to Immediately Shut Down Fraudulent Pyramid Operation
May 4, 2017

Press Release, Illinois Attorney General’s Office Chicago — Attorney General Lisa Madigan yesterday filed a lawsuit and temporary restraining order against a Chicago-based pyramid sales operation after receiving more than 20 complaints about its false and misleading claims that lured people into the costly scheme. Madigan filed the lawsuit in Cook County against Wealth Partners […]

SEC orders $7.7 million in payments in Wings pyramid scheme

SEC orders $7.7 million in payments in Wings pyramid scheme
March 1, 2017

By Beth Healy, Boston Globe Federal securities regulators have ordered the operators of an alleged pyramid scheme called Wings Network to pay a combined $7.7 million for their role in swindling investors in Latino communities in several states, including Massachusetts. Wings, which had a Framingham office, voluntarily closed its offices in the US in 2014, […]

Massachusetts fraudster pleads guilty to billion dollar pyramid scheme

Massachusetts fraudster pleads guilty to billion dollar pyramid scheme
October 24, 2016

Press Release, Immigration and Customs Enforcement BOSTON — The head a Massachusetts-based pyramid scheme that was disguised as an internet telecom company, pleaded guilty in federal court Monday to multiple counts of wire fraud and conspiracy. This guilty plea resulted from an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with […]

State settles with company it says ran pyramid schemes

State settles with company it says ran pyramid schemes
July 23, 2016

By Martha Stoddard, Omaha World-Herald LINCOLN — Attorney General Doug Peterson has settled with a Wymore, Nebraska, company that allegedly was running multiple pyramid schemes. Peterson announced the settlement agreement Friday. Under its terms, B & B Communications and its owners, Brian Barnhouse and Steve Borgman, denied the allegations but said they agreed to settle […]

Mexican businessman convicted in pyramid scheme

Mexican businessman convicted in pyramid scheme
February 22, 2016

By Cindy Ramirez, El Paso Times A federal jury in El Paso has convicted a Mexican businessman in a pyramid scheme officials said resulted in an estimated $15 million loss for investors in Mexico and the United States. Roberto Trinidad Del Carpio Frescas, 39, of Chihuahua, on Friday was convicted on 24 counts of wire […]

Woman gets prison for $460K fraud

Woman gets prison for $460K fraud
February 16, 2016

By Kevin Murphy, USA Today Wisconsin MADISON – A Tomahawk woman who “systematically fleeced” $460,831 from 32 investor clients was sentenced Tuesday in federal court to four years and three months in prison and ordered to repay her clients. Pamela M. Hass, 64, deserved “no leniency,” Assistant U.S. Attorney Daniel Graber wrote the court. Between […]

Accused of running a pyramid scheme, Berkeley wine store shifts to online- only sales

Accused of running a pyramid scheme, Berkeley wine store shifts to online- only sales
December 16, 2015

By Matthias Gaffni, Mercury News  BERKELEY — An embattled wine business announced it is closing its University Avenue store this week, days after this newspaper reported Premier Cru was facing at least 10 lawsuits over the past year claiming more than $5 million in wine was never delivered to customers. “Due to the high volume […]

SEC Halts $32 Million Scheme That Promised Riches From Amber Mining

SEC Halts $32 Million Scheme That Promised Riches From Amber Mining
October 1, 2015

Press Release Washington, D.C. – The Securities and Exchange Commission today announced it has filed fraud charges and obtained asset freezes against the operator of a worldwide pyramid scheme that falsely promised investors would profit from a venture purportedly backed by the company’s massive amber holdings. California resident Steve Chen and 13 California-based entities, including […]

FTC Acts to Halt Vemma as Alleged Pyramid Scheme

FTC Acts to Halt Vemma as Alleged Pyramid Scheme
August 26, 2015

Press Release, Federal Trade Commission At the Federal Trade Commission’s request, a federal court has temporarily halted an alleged pyramid scheme, Vemma Nutrition Company, that lures college students and other young adults with the prospect of getting rich without having a traditional 9-to-5 job. The FTC seeks to stop the operation, which earned more than […]

Pyramid Scheme Promoter Arrested on Visa Fraud Charges

Pyramid Scheme Promoter Arrested on Visa Fraud Charges
May 26, 2015

Press Release, U.S. Department of Justice BOSTON – A Florida man involved in several pyramid schemes was arrested on visa fraud charges after entering the United States from a trip abroad. Sanderley Rodrigues De Vasconcelos, 43, of Davenport, Fla., was charged in U.S. District Court in Boston on Saturday, May 16, 2015, with fraud and […]

U.S. Appeals Court Affirms Ruling in Favor of FTC, Upholds Lower Court Order Against BurnLounge Pyramid Scheme

U.S. Appeals Court Affirms Ruling in Favor of FTC, Upholds Lower Court Order Against BurnLounge Pyramid Scheme
June 5, 2014

Press Release, Federal Trade Commission In a victory for the Federal Trade Commission, a federal appeals court has upheld a district court ruling that BurnLounge, a multi-level marketing business, and several associated individuals, operated a pyramid scheme causing millions of dollars of consumer harm. The court order permanently halted the defendants’ marketing methods, which lured […]