"Pyramid scheme" recruits high profile sales reps

"Pyramid scheme" recruits high profile sales reps

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by STUART WATSON / NewsChannel 36
E-mail Stuart: SWatson@WCNC.com

Bio | Email | Follow: @stuartwcnc

WCNC.com

Posted on May 26, 2010 at 11:47 PM

Updated Thursday, May 27 at 4:53 PM

CHARLOTTE, N.C. -- Several prominent Carolinians, including the wife of former Bank of America CEO Ken Lewis, have signed on as sales reps for a multi-level marketer recently fined as a "pyramid scheme."

Donna Lewis joined Fortune Hi-Tech Marketing, known as FHTM, in December 2008 at the invitation of her friend, Charlotte television personality Barbara McKay.

Last month FHTM agreed to pay almost $1 million in refunds and fines to settle a claim by the Montana Commissioner of Securities and Insurance that the multi-level marketer was a "pyramid promotional scheme."

"It is truly not a pyramid," Donna Lewis said, when reached by phone at her home. "It's helping people in this horrible economy make a living."

Lewis said she joined FHTM but is not actively involved in selling the program or products.

"I just did it to tell a few people about it who really needed help," she said.

Some FHTM sales reps used Lewis' name to promote the company, even publishing websites that erroneously link the name of the former Bank of America chief executive to the scheme.

"He is not involved at all," said Donna Lewis, adding, "If he thought it was wrong he would not let me be involved."

"Ken Lewis has never been a part of the company," said Barbara McKay, a fixture on WBTV-TV for more than two decades. "But he was confident I would never lead her into anything that wouldn't be good for her."

McKay says she entered Fortune Hi-Tech Marketing as a representative and is now an "Executive Manager."

FHTM claims to have signed up hundreds of thousands of representatives to sell products from well-known brands like GE, Dish Network, Travelocity and Home Depot.

But videos posted by the dozen to websites like YouTube and Facebook show FHTM recruiters emphasizing the recruitment of yet more sales reps.

"When you get your first three people signed up as a business owner you all have made $300, and then we will teach them the exact same thing and do everything in our power to repeat the process," Fortune rep Todd Rowland, a former high school coach from Arkansas, tells a packed meeting room.

Reps pay a fee of $299 to join the company, reduced after the Montana action to $199.

FHTM has charged still more fees for training and website development.

"And in the process very few actually sell a product," said Bob Fitzpatrick, a Charlotte watchdog who monitors pyramids with his website PyramidSchemeAlert.org.

Websites for some FHTM reps list other prominent Carolinians to bolster the company's credibility, but who denied involvement. They include former Charlotte Mayor Pat McCrory, who said he'd "never heard of it. I have absolutely no connection." Also listed but denying involvement in FHTM -- NASCAR legend Geoff Bodine, who said, "I'm not involved. Someone signed me up. They're trying to use my name."

Fortune Hi-Tech Marketing settled the Montana complaint on April 22, agreeing to pay up to $840,000 in refunds and $100,000 in fines, plus $50,000 to the state's Investor Protection Trust. North Dakota also ordered FHTM to cease and desist doing business in that state without proper licensing and FHTM paid a $12,000 fee.

FHTM CEO Tom Mills told WHAS-TV, "I have a great deal of respect for the people from both North Dakota and Montana. The authorities handled it appropriately in my mind, and I think we've come to an agreement and we're moving forward. We're still doing business in their states."

The Better Business Bureau in Lexington, Ky., the company's home, has given Fortune Hi-Tech Marketing a grade of "F".

"From all I can tell about this operation it's primarily about recruiting other people into the network," said Charlie Mattingly, CEO of the Louisville BBB. "So I would say people should be cautious."

A spokeswoman for the North Carolina Attorney General says her office is concerned about FHTM, but so far the company has paid refunds promptly in response to complaints.

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