A 3rd District judge has approved a temporary restraining order against an alleged pyramid scheme that promised its participants could become millionaires in six months.
Utah's Division of Securities requested the order against Future Plus Association and King and Queenmakers International both California firms with offices in Utah and participants in the alleged scheme that violates state securities laws.A hearing has been scheduled Friday to ask for a preliminary injunction against the firms and their sales agents.
Regulators discovered the alleged pyramid scheme through an advertisement in the March 13 Provo Daily Herald, which said King and Queenmakers had arrived to "revolutionize the economy of Utah" and participants must have a prerequisite desire to become a millionaire, the complaint said.
A division investigator met with two Future Plus sales reps and was told he could have his million dollars within 18 months by participating in the company's "5X6 Pentalinear Compensation System."
To participate and become a millionaire, the complaint said, the investor must sell five memberships. The five new investors must also sell five and so on until about 19,530 memberships are sold. At a sales meeting the investigator was told millionaire status could be reached in six months.
The initial investment would be $149.95, followed by monthly installments of $49.95, the complaint said.
Although membership in Future Plus provides access to food, merchandise, insurance, travel and credit advantages, the state claims the most compelling benefit was participating in the alleged pyramid scheme.
"The plan looks just like a classic pyramid scheme. It appears to be primarily concerned with recruiting new participants," division director John C. Baldwin said.
Future Plus memberships constitute securities under state law, he said, but the memberships or the salespeople were not registered with the state. Violations listed in the complaint include nine counts of fraud and 10 counts of unregistered agents selling unregistered securities.
Individual defendants are William Smith of California and Utah residents Michael Powers, Steve Bradshaw, Dan Stott, Lester Bahr, David Oakeson, Brad Hunter, Dan Johnson, Mark Loertscher, Rhett Wintch, Lisa Wintch and John Does 1-100.
State officials said the named defendants are the only people they know of who purchased memberships.
Baldwin said that finding the advertisement about Future Plus is part of the division's "random surveillance" program. "The program allows us to respond quickly and save Utahns money that might otherwise be lost."