BurnLounge, FTC, Pyramid Scheme, Section 5, FTC Act,

The BurnLounge Prosecution Shows How and Why MLM Scams Flout the Law and the FTC

On July 1, 2011 – more than four years after the government brought charges — a federal judge ruled that the multi-level marketing company, called BurnLounge, Inc., operated as an illegal pyramid scheme. The ruling supported the prosecution of BurnLounge by the Federal Trade Commission (FTC). The case against BurnLounge was one of the rare prosecutions the FTC has brought against the ballooning multi-level marketing industry in recent years. Active prosecutions came to an abrupt halt in 2001 when President George W. Bush named an Amway-related attorney to head the FTC, and since then some FTC officials have become lobbyists for the MLM industry. So, this case was seen as significant and unusual. It was a rare prosecution, and even more rare, one that went all the way to a trial. It was reportedly prompted by the office of the South Carolina Attorney General. The state of South Carolina was a BurnLounge hotbed. The scheme’s superstar recruiter was a former U of SC football hero. In just a few years, he gained nearly a million dollars as a BurnLounge recruiter while the court found that at least 97% of all recruits lost money. Read More...