CONCORD, N.C. -- You may not recognize the name ACN.
It was once short for American Communications Network, now billed as the world’s largest direct seller of Internet phone service and based in Concord.
But you will probably recognize ACN's pitch man: Donald Trump.
Trump is scheduled to visit Charlotte this weekend to speak to 20,000 independent sales reps who gather for a kind of pep rally and international training session at Time Warner Arena.
Trump enthusiastically endorses ACN's desktop video phone dubbed the "Iris 5000" as well as the company's sales plan. He placed the video phone prominently in a March 2009 episode of the NBC show in which he stars, "The Celebrity Apprentice."
But there is a legal cloud on the horizon for ACN.
Montana Securities Commissioner Monica Lindeen has accused the company of running a "pyramid scheme" and has filed a temporary cease and desist order there.
ACN officials say the company will fight Montana's order. ACN's Executive Vice-President Dave Merriman calls the allegation "a big misunderstanding" based on misreading company sales figures.
ACN charges $129 for the video phone, but collects $499 for each new sales rep.
A company spokeswoman says ACN has sold 300,000 of the phones and the company reports 200,000 current sales reps, half of them in the U.S.
In legal filings, Montana's securities commissioner accuses ACN reps of fraudulently stating income opportunities.
Lindeen said, "Folks look for a way to make money and in these hard times it's always good to find a way to try to make some. But in the case of a pyramid scheme 99.9 percent of the folks aren't going to make anything."
Lindeen backs up the claim in legal filings with sales figures from Montana residents.
"We completely disagree as well as our legal advisory team which is made up of former attorneys general and we will fight the case," said Merriman, who promotes the company's sales plan.
Merriman insists Montana officials are misreading the company's own numbers.
He says, "It appears it's just a misunderstanding."
ACN refuses to release income statements or sales figures for independent sales reps or to disclose the so-called “churn rate,” how quickly sales reps drop out and are replaced by new recruits.
But Merriman says most sales of phones and service, as well as satellite television and other products offered by the company are made to an estimated 1.5 million end-use customers and not to sales reps buying up the products themselves to make them eligible for sales commissions from their so-called “downline.
Two years ago North Carolina, Cabarrus County and the city of Concord offered ACN $600,000 in tax credits to relocate from Michigan to the former Concord Telephone Company building prominently visible on Interstate 85.
Merriman says the credits helped but did not cover the moving costs and the company has yet to take advantage of them.
The company brought with it more than 500 jobs, which serve as support for what it claims are 200,000 sales reps and 1.5 million customers in 20 countries.
Local officials celebrated the ribbon-cutting for the company, calling it a “silver lining” in the dark recession.
And ACN has promoted itself as a good corporate citizen, pledging $2 million to Charlotte’s Ronald McDonald House -- more than any other corporate contributor.
The company collected contributions from sales reps at the international training session in Charlotte last year and Donald Trump wrote his own check for $10,000.
But some of ACN’s top salesmen have not always been such good citizens.
The NewsChannel 36 I-team has learned that two of the company's “Circle of Champions” -- brothers Michael C. Maser and Patrick D. Maser, who hold their own sales training at Ovens Auditorium this weekend under the name “Wealth Institute” -- were convicted of federal felony charges in 2003.
Federal DEA agents connected the Maser brothers to an international drug ring that smuggled hundreds of thousands of ecstasy pills from Holland to their native Pennsylvania and laundered the proceeds.
U.S. Drug Enforcement special agent Andrew Petyak says the Maser brothers' Dutch co-defendant Stefan Stricker was connected to organized crime in Europe.
Federal records show Michael Maser pled guilty to possession of ecstasy with intent to distribute and conspiracy to launder money and was given a 54 month prison sentence.
He was released from prison in September of 2006 according to Bureau of Prison records.
Patrick Maser pled guilty to conspiring to launder money and was sentenced to five years probation.
The Masers did not respond to voice mail and e-mails.
ACN Senior Marketing Manager Katie Mapel e-mailed that ACN’s owners and senior managers were disappointed in the brothers’ conviction which occurred while they were ACN sales reps, but found no legal reason to terminate their agreement.
“In the past eight years, the Masers have focused on building their business and have had an outstanding record of operating ethically and professionally, and have since been appointed to ACN’s Circle of Champions.” Mapel wrote. “The beauty of the ACN Opportunity is that someone’s past doesn’t determine their future or their level of success."
The Maser brothers are pictured in ACN promotions inside a private jet.
Brother Patrick appears in a YouTube video pointing to a string of Mercedes-Benz touting the “ACN lifestyle.”
Each brother claims to earn more than $100,000 a month from ACN.
Montana sales reps didn’t have it so good.
The cease and desist order reports that of 91 ACN sales reps in that state in 2008, none made more than $700.
The next year, the order reports Montana sales reps paid almost $250,000 in fees and memberships and for conventions like the one in Charlotte this weekend.
They earned back an average of seven cents on the dollar, according to figures in the order.
Montana has set a hearing in the case for October 25.
