Skybiz.com Shut Down by Federal Trade Commission
June 18, 2001
In an action announced today, the Federal Trade Commission has received a temporary injunction against Skybiz.com, sometimes known as Skybiz 2000, and the company's assets have been frozen. The suit, filed in the Northern District of Oklahoma, names the company and individual defendants based in Tulsa. A hearing on a permanent injunction will be held June 26, 2001.
Skybiz is a global, internet-mall type of multi-level marketing scheme which has been the subject of regulatory actions in Canada, Australia, New Zealand, Great Britain, and India. The FTC estimates that it has conned consumers of as much as $175 million.
Individual, named defendants include James S. Brown, President of Skybiz; Stephen D. McCullough, the company's marketing VP; Elias F. Masso; Nanci H. Masso; Kier E. Masso; and Ronald E. Blanton, each of whom has held positions with Skybiz.com or one of the other named corporate defendants. The corporate entities named in the suit include: SkyBiz.com, Inc; World Service Corporation; Nanci Corporation International; and WorldWide Service Corporation.
According to the FTC complaint, Skybiz has been enticing consumers since 1998, claiming this home-based "business" will lead to great riches. The $125 cost to join the program, ostensibly for the purchase of a "Web Pak," was in reality the cost to purchase the right to be paid commissions for recruiting new participants.
According to the complaint,
In pyramid schemes, each participant pays money to the promoter in exchange for the right to recruit new participants. Participants then receive benefits for each individual they recruit or who appears below them. Earnings in a pyramid scheme are derived primarily from recruiting other participants into the program, not from the retail sale of products or service.
The result of the structure and operation of a pyramid scheme is that the vast majority of participants will receive little, if any, financial reward. In fact, most participants will lose their initial investment.
The Skybiz program is structured so that financial gains are dependent on the continued, successful recruitment of additional participants. Only those individuals at the very top of the structure will achieve financial success. The majority of Skybiz associates enjoy little or no financial success from the Skybiz program.
Defendants fail to disclose. . . that the majority of Skybiz associates enjoy little or no financial success from the Skybiz program.
The FTC is seeking a permanent injunction against the Defendants, and consumer redress.