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.
Photo by Visions of Domino
J. Michael Warner on January 4th, 2010 at 5:37 pm
There is always a grandstanding attorney trying to make a name for himself. FHTM has been doing business in North Dakota for years now and I am sure this will be cleared up.
Alan Gustin on January 9th, 2010 at 8:38 pm
I predict that Stenehjem eventually becomes an FHTM rep.
Tony Thornley on January 14th, 2010 at 3:14 am
This message is now posted at fhtm.net
Notice to all FHTM Representatives:
Dear FHTM Reps,
We are pleased to be able to tell you that we have resolved our issues with the Attorney General of North Dakota. We had very positive discussions with his office, and were very impressed with their willingness to listen to us and to work with us.
As part of our agreement with them, we must remind you that it is a misrepresentation pursuant to North Dakota law (and the laws of all 50 states and territories) to tell any person that income can be earned solely by recruiting new independent representatives. All earnings are dependent on the sales of products and services, as required by law.
Further, our agreement does not constitute an endorsement or an approval of FHTM, our business model, our products or our services.
You may now resume your business in North Dakota. Please be mindful of the above, and know that we have full confidence in you and your ability to bring honor to the FHTM name.
Paul Orberson and Tom Mills
food storage on March 25th, 2010 at 11:12 am
Glad this had a positive result.
Shelby Jones on June 18th, 2010 at 1:50 pm
This is kind of funny. I attended a few FHTM meetings. They barely mentioned products during the meeting, it was all about signing reps up. The main guy told me I just need to get 10 customer points, then don’t worry about selling products any longer, focus on signing reps up.
Robert Balgerson on July 17th, 2010 at 6:00 pm
That was a pretty big blow to the reps of FHTM. Many of them have had real issues because of this lack of communication and paper work.
Funny how somehting so little can make such a big impact on the company.
Paulie Moorehouse on July 30th, 2010 at 5:23 am
Just found this information that everyone should read:
Joseph Isaacs and Fortune Social, LLC (collectively “Isaacs”) deny each and every claim brought by Fortune Hi-Tech Marketing, Inc. (“FHTM”) in a filing made today with the American Arbitration Association, who is overseeing this case. In addition, Isaacs fights back and asserts his own counterclaim for relief against FHTM, Paul C. Orberson (individually and in his capacity as President of FHTM), Jeff Orberson (individually and in his capacity as Chief Operating Officer of FHTM), and Thomas A. Mills (individually and in his capacity as Vice-President and Chief Executive Officer of FHTM) (collectively “FHTM”). Isaacs counterclaim claim Breach of Fiduciary Duty, Breach of Contract, Common Law Fraud, Unfair & Deceptive Business Practices, Failure to Register Securities, Fraudulent Practices Regarding the Sale of Securities, Civil Racketeering Conspiracy (violation of the Federal RICO statutes) and Defamation.
FHTM operates an unlawful product-based endless recruiting pyramid scheme that relies on untrue and misleading representations and unlawful, unfair, and fraudulent business practices. While FHTM purports to be in the business of selling name-brand services like wireless, satellite television, home security, vitamins, nutritional products and travel services, its true business is using consumers to generate fee income for representing non-existent partnerships, major sports figures, and prominent businessmen. To entice consumers to participate, FHTM makes untrue or misleading claims regarding its relationship with Fortune 100 companies like Verizon Wireless, GE Security, Dish Networks and Travelocity to create the illusion that consumers can become millionaires in three to five years.
FHTM’s growth exploded when it began to lure consumers disenchanted with traditional jobs and the recession that began in 2007 to inspirational and high-pressure business opportunity seminars touting an innovative business model that promises huge financial rewards through multi-level network marketing. FHTM erring presenters claim to have proprietary tools, special relationships, and other support that allow consumers to grow their own business by partnering with FHTM’s “companies”.
It would not be long before Isaacs (and the world) made several troubling discoveries about FHTM’s business plan and practices that doused his enthusiasm: (1) Paul Orberson had not made any special arrangements with the companies mentioned at the business opportunity/presentation seminar or in the company produced videos; (2) the only way to earn a significant income and be promoted up the ranks was to recruit additional IRs; (3) FHTM had not received regulatory approval for its pyramiding scheme in every state; (4) only a handful of IRs had earned anywhere near the residuals projected; (5) the prominent businessmen, politicians, former attorney generals and sports figures to whom FHTM constantly alluded were in fact IRs actively promoting their own FHTM business; and (6) a growing number of state attorneys general had already begun investigating FHTM in response to numerous complaints.
It turns out that FHTM’s ‘innovative’ marketing plan is nothing more than a face lift to an age-old scheme. According to the FTC’s Consumer Protection Bureau:
Pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public. Some schemes may purport to sell a product, but they often simply use the product to hide their pyramid structure. There are two tell-tale signs that a product is simply being used to disguise a pyramid scheme: inventory loading and a lack of retail sales. Inventory loading occurs when a company’s incentive program forces recruits to buy more products than they could ever sell, often at inflated prices. If this occurs throughout the company’s distribution system, the people at the top of the pyramid reap substantial profits, even though little or no product moves to market. The people at the bottom make excessive payments for inventory that simply accumulates in their basements. A lack of retail sales is also a red flag that a pyramid exists. Many pyramid schemes will claim that their product is selling like hot cakes. However, on closer examination, the sales occur only between people inside the pyramid structure or to new recruits joining the structure, not to consumers out in the general public.
Nonetheless, the truth is catching up with FHTM. On December 10, 2009, The North Dakota Attorney General’s Office filed a Cease and Desist Order for violation of the Consumer Fraud Law, the Transient Merchant Law, the Home Solicitation Sales Law, and the North Dakota Pyramid Schemes Act. On January 19, 2010, FHTM entered into a Assurance of Voluntary Compliance with the North Dakota Attorney General’s Office. On March 16, 2010, the Montana State Auditor’s Office filed a Temporary Cease and Desist Order against FHTM, Paul C. Orberson, Thomas A. Mills, and Dianne Graber (a Montana IR). According to the Montana State Auditor’s Office, FHTM has engaged in acts or practices constituting violations of the Securities Act of Montana, Montana Code ANN.30-10-101 et seq. On April 22, 2010, FHTM agreed to pay nearly $1 million and to change its business practices to resolve the charge that it is operating a pyramid promotional scheme.
With each passing day, more states are jumping on FHTM’s bandwagon. The alarming rise in consumer complaints and governmental sanctions has prompted the Better Business Bureau of Central and Eastern Kentucky to downgrade FHTM’s rating from “B-” to “F”. At the same time, a proliferation of online bulletin boards and blogs, such as http://www.complaintsboard.com and http://www.scams.com criticize FHTM’s pyramid scheme confirms that Isaacs’ experience is not unique. Will those operations be the next target of Fortune’s high price legal team?
fhtm on March 19th, 2011 at 12:53 am
FHTM always rocks in comparison to any other business strategy..This is the best platform to start up with your career!!