Those who lost money in an Internet pyramid scheme last year will recover their investments, totalling up to US$5 million, the Federal Trade Commission said Monday.
Tens of thousands of Web surfers in 60 countries paid between $250 and $1,750 to join the pyramid scheme, which was advertised on Web sites by Fortuna Alliance, a Bellingham, Washington-based company, the FTC said. Under the scheme, investors were told they would earn $5,000 per month for enlisting others to pay in.
"Our expert calculated that over 95 percent of the people who invested in Fortuna would have lost money if we had not shut this pyramid down," said Jodie Bernstein, director of the FTC's Bureau of Consumer Protection, in a statement. "We hope that all consumers get the message: Pyramid schemes are illegal and in the end they all fail."
Under the agreement reached with the Seattle Regional Office of the FTC, Fortuna will use $2.8 million recouped from bank accounts in Antigua to pay back the investors, along with $350,000 now frozen in US banks. The FTC said that $2 million had already been redistributed, and that all refund notices will be sent out by the end of March.
Last year, the company's assets were frozen and the pyramid scheme was halted by a federal court order. The FTC settlement stipulates that arrest warrants for three Fortuna executives not be carried out and all charges be dropped.
The Fortuna Alliance and four company officials are also barred from "engaging, participating, or assisting in any manner or capacity ... the advertising, promoting, or offering for sale ... any chain or pyramid marketing program," the FTC said.
