FTC Announces Claim Deadline and Redress Distribution Date SkyBiz.com

Scrub · #1 03-06-07, 01:13 AM

FTC Announces Claim Deadline and Redress Distribution Date
in Matter of SkyBiz.com

Final Opportunity For Victims To File Claims Against International Pyramid
Scheme Defendants

The Federal Trade Commission is announcing the final date for victims of the SkyBiz.com pyramid scheme to file claims for a refund with the redress administrator. The illegal scheme operated internationally until 2001 and promised wealth but delivered nothing. SkyBiz victims from more than 200 countries throughout the world will soon be receiving a refund.

The Commission filed a complaint against the company and its principals in May 2001 and reached a settlement with the defendants in January 2003. The settlement provided for up to $20 million in consumer redress.

The Redress Program: Under the SkyBiz redress program, consumers who filed claims and have been found eligible will receive a distribution equal to the amount of their SkyBiz purchase, minus any commissions they received under the program. Robb Evans & Associates (REA), the redress administrator, will send a broadcast e-mail to consumers announcing the final cut-off date for filing as a claimant and the date of the planned distribution, as detailed below.

Foreign and US consumers who want to file a claim in this matter must do so by March 30, 2007. Victims will be able to file claims on a website available in several languages. The website will also discuss the form of payment of the redress. The final redress distribution to consumers will be made by May 21, 2007, most likely in the form of Stored Value Cards (SVCs), which can be used in the US and abroad, that must be used for purchases before September 20, 2007.

To view the latest information regarding the SkyBiz redress fund, consumers can go to: www.skybiz-redress.com.

Case History: In May 2001, the FTC filed suit in U.S. district court in Tulsa, Oklahoma, against SkyBiz and its principals, alleging they promoted a pyramid scheme with claims of quick riches. The complaint alleged the defendants used sales presentations, seminars, teleconferences, and its Web site to tout the opportunity to earn thousands of dollars a week by recruiting new “associatesÃ¢â‚¬Â into the program. The cost to join the SkyBiz program was $125, supposedly to pay for an “e-Commerce Web Pak. Focusing on the huge amounts of moneyÃ¢â‚¬Â participants could earn, the defendants encouraged participants to buy more than one Web Pak at a time. According to the Commission, the plan was a classic pyramid scheme, promoted by fraudulent earnings claims.

The case was scheduled to go to trial on January 16, 2003. By that date, the FTC also had pursued the case in the courts of Ireland and Bermuda, and received assistance from law enforcers in numerous countries including Australia, South Africa, New Zealand, and Canada. Before the trial, however, the defendants stipulated to a settlement that was entered by the court on January 29, 2003. The settlement provided $20 million for consumer redress and barred the defendants from participating in pyramid schemes or making specific earnings claims when promoting future business ventures.

An FTC press release issued on March 24, 2003, details the terms of the settlements with several of the individual defendants in the case, as well as the participation the FTC received from other law enforcement agencies in bringing and settling the complaint. The initial details of the redress plan were announced in a May 14, 2004 press release. Both releases can be found on the FTC Web site.

The Commission wishes to acknowledge the numerous members of The International Consumer Protection and Enforcement Network (ICPEN) who provided substantial assistance in the administration of redress in this case.

Copies of the documents related to the SkyBiz matter are available from the FTC Web site at http://www.ftc.gov and also from the FTC Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad.

MEDIA CONTACT:
Mitchell J. Katz,
Office of Public Affairs
202-326-2161

STAFF CONTACT:
James E. Elliott
FTC Southwest Region, Dallas
214-979-9373

(FTC File No. X010046; Civ. No. 01-CV-396-EA (M))

http://www.ftc.gov/opa/2007/03/skybiz.htm

Scrub · #2 03-06-07, 01:17 AM

Court Appoints Temporary Receiver over International Pyramid Operation

Illegal Scheme Claims It Is Operating in 200 Countries World Wide

The Federal Trade Commission has asked a U. S. District Court Judge to halt the unlawful operations of SkyBiz.com, charging that the operation that purports to sell online tutorials on Web-based products is actually a massive illegal pyramid scheme which may have conned consumers around the world out of approximately $175,000,000. At the request of the FTC, Chief Judge Terry C. Kern has temporarily halted all unlawful activities of the SkyBiz operation, frozen the defendants' assets to preserve them for consumer redress, and appointed a receiver, pending the preliminary injunction hearing scheduled for June 26, 2001.

The FTC suit was filed in U. S. District Court in the Northern District of Oklahoma. The corporate and individual defendants are based in Tulsa. The corporate entities named in the suit include: SkyBiz.com, Inc; World Service Corporation; Nanci Corporation International; and WorldWide Service Corporation. Several individual defendants were also named, including: James S. Brown; Stephen D. McCullough; Elias F. Masso; Nanci H. Masso; Kier E. Masso; and Ronald E. Blanton.

In papers filed with the court, the FTC alleges that since late 1998, the defendants have promoted a work-at-home business opportunity with claims of quick riches. One SkyBiz presentation claimed, "This system was put together by a gentleman named Eric Rasmussen who basically joined SkyBiz and six months later was able to retire with an income of about 400,000 a month. Currently, [he] lives in the Gold Coast of Australia and he's making 76,000 a week and growing." In in-person sales presentations, seminars, teleconferences, Web site presentations and in other marketing material, the defendants touted the opportunity to earn thousands of dollars a week by recruiting new "Associates" into the program. They provided CD-Roms, computer disks, videos and books promoting the SkyBiz programs and they provide a PowerPoint presentation on their website that can be downloaded to aid in recruiting new members. The cost to join the SkyBiz Program is $125, ostensibly used to buy an "e-Commerce Web Pak," but in reality was to purchase the right to receive compensation for recruiting additional participants. Participants were urged to invest in more than one "Web Pak," to maximize their earning potential.

The FTC charged that the claims that consumers who invested in SkyBiz would make substantial income were false; that failure to disclose that most people in pyramid schemes lose money is deceptive; that defendant provided the means and instrumentalities for others to deceive consumers by providing speakers and promotional materials that made the false and misleading claims; and that SkyBiz was actually an illegal pyramid scheme. All four violate the FTC Act.

The complaint was filed by the FTC in U.S. District Court for the Northern District of Oklahoma on May 30, 2001, under seal. The seal was lifted June 8, 2001.
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NOTE: The Commission files a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

NOTE: The Commission authorizes the filing of a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant actually has violated the law. The case will be decided by the court.

Copies of the complaint are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

MEDIA CONTACT:
Claudia Bourne Farrell
Office of Public Affairs
202-326-2181

STAFF CONTACT
Jim Elliott, Kristin Malmberg or Bradley Elbein
FTC Southwest Region
214 979-9350

http://www.ftc.gov/opa/2001/06/sky.htm

Scrub · #3 03-06-07, 01:19 AM

CORRECTED: April 1, 2003
For Release: March 24, 2003

Skybiz Pyramid Settlement to Provide $20 Million for Consumers

Evidence Showed Over 96 Percent of Recruits Lost Money

Distribution of $20 million dollars in consumer redress will begin in the near future for victims of www.SkyBiz.com, an alleged massive international pyramid operation based in Tulsa, Oklahoma. The money for consumer redress is part of a settlement between the pyramid's promoters and the Federal Trade Commission, which charged that their scheme violated federal laws. The settlement also bars the defendants from participating in pyramid schemes in the future, and bars them from misrepresenting business ventures. It bars one defendant from engaging in any multilevel marketing programs for life and bars three others from engaging in multilevel marketing programs in the for periods ranging from seven to 22 years.

In May 2001, the FTC filed suit in U.S. District Court in Tulsa, Oklahoma charging that Tulsa-based www.SkyBiz.com and its principals promoted a pyramid scheme with claims of quick riches. The FTC alleged that in sales presentations, seminars, teleconferences, Web site presentations and other marketing material, the defendants touted the opportunity to earn thousands of dollars a week by recruiting new "associates" into the program. The cost to join the SkyBiz program was $125, ostensibly used to buy an "e-Commerce Web Pak." The company's sales presentations, however, focused on the huge sums of money that could be made by recruiting additional participants. Participants were urged to invest in more than one "Web Pak" to maximize their earning potential.

The FTC claimed that the program was a classic pyramid scheme. The agency charged that the claims that consumers who invested in SkyBiz would make substantial income were deceptive; that the defendants' failure to disclose that most people in pyramid schemes lose money is deceptive; that the defendants provided the means and instrumentalities for others to deceive consumers by providing speakers and promotional materials that made the false and misleading claims; and that SkyBiz was actually an illegal pyramid scheme. The FTC alleged that all four actions violate the FTC Act.

The case was scheduled to go to trial January 6, 2003. By that date, the FTC had also fought the case in the courts of Ireland and Bermuda, participated with law enforcement agencies in Australia, South Africa, New Zealand, Canada, and the United Kingdom, and partnered with consumer agencies in Hawaii, Michigan, North Carolina, Oklahoma, Wisconsin and Wyoming.

The defendants agreed to a settlement, reached in principle January 4, and entered by the court on January 28th, to end the litigation as to these nine defendants.

The FTC filed the suit in U.S. District Court in the Northern District of Oklahoma. The corporate entities named in the suit include: SkyBiz.com, Inc; World Service Corporation; Nanci Corporation International; and WorldWide Service Corporation. The FTC also named several individual defendants, including: Elias F. Masso; Nanci H. Masso; Kier E. Masso; James S. Brown; Stephen D. McCullough; and Ronald E. Blanton. Blanton settled the FTC charges in January 2002. The trial of Stephen McCullough is scheduled to start April 14, 2003.

Investors who believe they qualify for redress can visit http://www.skybizredress.com for further information.

The settlement will provide $20 million for consumer redress and will bar all the defendants from participating in pyramid schemes or misrepresenting the amount of sales, income, profits or rewards of any future business venture. Nanci Corporation is permanently barred from engaging in, advertising, or selling any multilevel marketing program. The settlement bars Elias F. Masso from engaging in any aspect of multilevel marketing for 22 years, James S. Brown for 10 years, and Kier E. Masso for seven years. All of the defendants are barred from providing others with the means and instrumentalities to make false and misleading statements. In addition, the settlement requires that when the defendants make any claims regarding earnings, profits or sales volume for future marketing programs, they disclose the number and percentage of participants who have made a profit through the program and disclose the average and median amount of money made. The settlement bars the defendants from sharing their customer lists and contains record-keeping provisions to allow the agency to monitor compliance with the order.

The Commission wishes to acknowledge the substantial assistance provided by the Royal Canadian Mounted Police; Australian Competition and Consumer Commission; South African Department of Trade and Industry; New Zealand Commerce Commission; United Kingdom Department of Trade and Industry; the attorneys general of Wyoming, Michigan, North Carolina, and Wisconsin; the Oklahoma Department of Securities; and the Hawaii Securities Enforcement Unit of the Department of Commerce and Consumer Affairs.
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NOTE: A stipulated final judgement is for settlement purposes only and does not constitute an admission of a law violation. Stipulated final judgments and orders have the force of law when signed by the judge.

Copies of the complaint and stipulated final judgment and order are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357), or use the complaint form at http://www.ftc.gov The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

MEDIA CONTACT:
Claudia Bourne Farrell,
Office of Public Affairs
202-326-2181

STAFF CONTACT:
Jim Elliott, Kristin Malmberg or Bradley Elbein
FTC Southwest Region
214-979-9350

(FTC File No. X010046)

http://www.ftc.gov/opa/2003/03/skybiz.htm

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