Originally created 02/26/97

Company to offer refunds following pyramid scheme on World Wide Web

SEATTLE - A company that used World Wide Web sites to lure thousands of investors to pay a fee by promising them $5,000 a month as others enrolled has agreed to make refunds, the Federal Trade Commission said.

When Fortuna Alliance received the money, it was wired to offshore trust accounts in Antigua, West Indies, the Justice Department said Monday. Refunds could total $5 million.

According to the agreement, Fortuna Alliance is not admitting guilt, but will be monitored by the FTC.

The Bellingham-based company also said it would not engage in pyramid schemes, in which funds from new investors are used to pay off promised returns to other investors.

Last year, a federal court order temporarily halted the company's operations and froze its assets. Arrest warrants were issued for three company officials after they failed to respond to a contempt citation ordering them to return millions of dollars placed in overseas accounts. The warrants were dropped as part of the agreement.

"The FTC made a terrible mistake, and we paid dearly for it. But now we have been cleared of all charges and are ready to resume business," Fortuna founder Augie Delgado said Monday.

Delgado said Fortuna has always had a money-back guarantee.

Fortuna Alliance and its five officers gave advice and promotional materials to members to set up their own World Wide Web sites to recruit new members, the FTC said.

The company had enticed investors with promises that once they paid a membership fee of between $250 and $1,750, they would receive profits of $5,000 or more a month as others were enticed to join, the FTC said.

Promoted on the Internet and with printed materials, the Fortuna Alliance scheme reached tens of thousands of consumers in more than 60 countries, the FTC said.

The FTC said $2 million already has been redistributed. Other refunds will come from $350,000 that remains frozen in U.S. banks. In addition, the Justice Department has recovered $2.8 million that had been wired to bank accounts in Antigua.

Pyramid schemes topped a list of the top five Internet scams issued last year by the National Consumer League in Washington, D.C.


Trending this week:


© 2018. All Rights Reserved.    | Contact Us