FTC Pyramid Cases Post-Amway

See the FTC's track record when it comes to pyramid cases.

Sep 18, 2015

FTC Pyramid Cases Post-Amway

In the last 42 years, the FTC has filed 31 cases against MLMs alleging that they were operating illegal pyramid schemes. In all of these cases, the FTC has also alleged that the defendants made false earnings representations. Moreover, of those cases, the FTC filed 19 motions for a temporary restraining order (TRO) and obtained that relief 17 times. It succeeded in obtaining preliminary injunctions in 19 of those cases and in three other cases as well for a total of 22 preliminary injunctions granted. In five cases, a settlement agreement was filed simultaneously with the complaint. In 29 of the cases, the FTC either won on summary judgment or at trial, or obtained a favorable settlement, with most settlements occurring within a year of the FTC filing its case.

Case name (year filed)	TRO Obtained	Preliminary Injunction Obtained	Outcome
*FTC v. Fortuna Alliance, LLC (1996)*	√	√	Settled within 1 year
*FTC v. Global Assistance Network for Charities (1996)*	√	√	Default judgment within 1 year; others settled within 1 year
*FTC v. Mentor Network, Inc*. (1996)	√	√	Settled within 1 year
*FTC v. World Class Network Inc. (1997)*	√	√	Settled within 1 year
*FTC v. Rocky Mountain International Silver and Gold, Inc. (1997)*	√	√	Settled in approx. 2 years
*FTC v. Jewelway Int’l Inc. (1997)*	√	√	Settled within 1 year
*FTC v. Cano (1997)*	√	√	1 default within 1 year; rest settled within 16 mths
*FTC v. FutureNet, Inc. (1998)*	√	√*	Settled within year
*FTC v. Kalvin P. Schmidt (1998)*			Simultaneous filing of complaint and settlement
*FTC v. Affordable Media, LLC (1998)*	√	√	Granted FTC’s Motion for Summary Judgment; affirmed on appeal
*FTC v. Five Star Auto Club, Inc. (1999)*	√	√	Some settled within year; trial verdict for FTC
*FTC v. David Martinelli, Jr. (1999)*	FTC’s motion denied	√	Settled within year
*FTC v. Equinox Int’l, Corp. (1999)*	√	√	Settled during trial after FTC’s case in chief **
*FTC v. 2Xtreme Performance Int’l, LLC (1999)*		√	Default within 2 years; others settled within 2 years
*FTC v. Netforce Seminars, Inc. (2000)*			Settled within 2 years
*FTC v. Bigsmart.com (2001)*			Simultaneous filing of complaint and settlement
*FTC v. Streamline International, Inc. (2001)*		√	FTC’s unopposed Motion for Summary Judgment granted
*FTC v. Skybiz.Com, Inc. (2001)*	√	√	Settled within 2 years
*FTC v. Trek Alliance, Inc. (2002)*	√	√	Settled within 3 years
*FTC v. Linda Jean Lightfoot (2002)*		√	Settled within 18 mths
*FTC v. NexGen3000.com (2003)*			Default within year; others settled within 2 years
*FTC v. Mall Ventures, Inc. (2004)*			Simultaneous filing of complaint and settlement
*FTC v. BurnLounge (2007)*	FTC’s motion denied	√	Trial verdict for FTC; affirmed on appeal
*FTC v. Fortune Hi-Tech Marketing (2013)*	√	√	Settled within 16 mths
*FTC v. Vemma (2015)*	√	√	Settled within 16 mths
*FTC v. Herbalife (2016)*			Simultaneous filing of complaint and settlement
FTC v. Dluca (2018)	√	√	Settled within 17 mths (Aug. 2019 Filings)
FTC v. Advocare et al (2019)			4 defendants settled (Advocare/Connolly, the Hardmans); claims against the remaining 2 defendants were dismissed
FTC v. Neora f/k/a Nerium International et al (2019)***			Pending****
FTC v. Success By Health et al (2020)	√	√	Granted FTC’s Motion for Summary Judgment on liability claims against 4 defendants; claims against remaining defendants pending
FTC v. BINT Operations, LLC et al (2021)			Pending

*Characterized as a modified TRO

**After the FTC presented its evidence at trial and rested, the case settled before defendant put on any defense case.

*** Neora’s (aka Nerium’s) lawsuit against the FTC was dismissed in August 2020. The complaint, which was filed on the same day the FTC sued the company, alleged that the FTC was attempting to improperly change direct selling laws. In the dismissal order, the court found that the company’s claims were not ripe for adjudication and that the company could properly defend itself against allegations that it is a pyramid scheme in the agency’s enforcement action currently pending in Texas federal court.

**** The FTC’s lawsuit against Neora (aka Nerium), which was originally filed in New Jersey federal court, was transferred to Texas federal court.

Note: This table does not include the action the FTC brought against Kevin Trudeau and Global Information Network in 2003 because the FTC’s formal complaint did not allege that the company was a pyramid scheme and the court never decided the issue.

This article was updated 10/14/2021.