What authorities consider illegal is a pyramid-shaped sales force that is based on recruiting new people into a company who are not selling a product. If that same sales force — as in Paul Orberson’s Fortune Hi-Tech Marketing — sells products, then it’s legal.
For some experts, the line between multi-level marketing and pyramid schemes is a thin one.
A multi-level marketing firm is “a money machine for the people at the top,” said Robert FitzPatrick, creator of the non-profit Pyramid Scheme Alert in Charlotte, N.C. “But if you’re at the bottom, such a system is a financial trap.”
FitzPatrick would not discuss Fortune specifically, but his Web site, www.pyramidschemealert.org, links to a dispute that Fortune had with the North Dakota Attorney General’s office.
The Attorney General banned Fortune briefly from doing business in the state because the company did not have a transient sales license and it was alleged that Fortune violated the state’s pyramid scheme law; the matter has since been resolved, a spokeswoman with the office said. In the settlement, the issue of the pyramid law was not addressed.
Orberson likes to say that his company has no debt and no shareholders. FitzPatrick points out: “That also means no filings with the SEC (Securities and Exchange Commission) and no public statements about how much everyone is making.”
Orberson said he makes $600,000 a year as the founder of Fortune. He used to take minimum wage, but his accountants told him it would look like a money-laundering scheme.
He contests the idea that everyone who gets into Fortune thinks he or she will get rich.
“For most people, it’s about a few hundred dollars a month, which makes a difference in their lives,” he said.
Photo by Visions of Domino