Plan Allegedly Turns Victims Into Recruiters
The Federal Trade Commission has filed a lawsuit against DP Marketing, a Connecticut-based operation that the FTC alleges to be a pyramid scheme, elaborately disguised as a work-at-home opportunity, that solicited new recruits through "spam" -- unsolicited commercial e-mail -- on the Internet and in newspaper classified ads across the country. At the request of the FTC, District Court Judge Christopher F. Droney has scheduled a hearing for July 30, 1999 on the FTC's motion for a preliminary injunction.
"The victims of this scheme answered ads that told them they could earn $13.50 per hour working at home, processing applications," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "What consumers actually got for their registration fee was not a job, but a kit explaining how they could lure other victims into this scheme. These defendants have been franchising fraud, and using the Internet to do it."
The FTC alleges DP Marketing and its principals, David Martinelli (a/k/a David Martin) and Deana Plourde, sent consumers unsolicited commercial e-mail -- "spam" -- with a messages such as:
"National Marketing Company seeks individuals to handle office duties from home. This is a full or part-time position with a salary of $13.50/hr. The position consists of processing applications for credit, loans or employment, as well as online consumer service."
Consumers responded by visiting DP Marketing's web site or by calling them. Whichever route they took, they were informed that the $13.50 per hour jobs were for processing orders for DP Marketing from the comfort of their own homes. They were told that no experience was necessary, and that for a "registration fee" ranging from $9.95 to $28.72 they would be sent everything they would need to get started, including telephone scripts, product sheets, time sheets and an ID number. What the consumers actually got was a kit instructing them first to place advertisements identical to the ones they had responded to, and then to read the same script to people who responded to their ads. Instead of $13.50 per hour, the money consumers could earn was based on the number of new victims they could recruit.
The FTC charged that the defendants violated federal law by misrepresenting to consumers that DP Marketing offers jobs at a specified salary; by failing to disclose that they are offering a pyramid work-at-home scheme; and by providing the "means and instrumentalities" to others to commit deceptive acts that violate federal law.
The FTC has asked the court to permanently bar the deceptive practices and award consumer redress for victims of the scam.
DP Marketing, Martinelli/Martin and Plourde are based in Terryville, Connecticut.
The Commission vote to file the complaint was 4-0. This case was filed with the invaluable assistance of the Office of the Attorney General of Connecticut.
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.
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; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. Consent agreements subject to public comment also are available by calling 202-326-3627. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
(FTC File No. 992 3224)
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