A 4th District judge will decide Tuesday whether to close down a Utah-based multilevel marketing company the attorney general's office says is a pyramid scheme.
On Feb. 7 a temporary restraining order was issued against Family Star and its promoters prohibiting the company from operating. The state says the company violates the Charitable Solicitations Act and uses deceptive sales practices.At a hearing Friday, Judge Ray M. Harding heard testimony from both sides to determine if the order should be made permanent.
More than 100 people, mostly Family Star supporters, packed into the courtroom to hear the testimony.
Investigators say that Family Star offered a membership letter for $19.95 that entitled the investor to sell the letter to five other clients. About 2,000 people, mostly Utah County residents, invested in the company believing they could make as much as $50,000.
Company officials say the membership entitles members to certain products.
Assistant attorney general Sheila Page said Family Star's products are not legitimate and the company's main concern is to bring in investors. She said the state has videotapes of the company's organizer, Sally Ann Hall, saying that the company needs to get large enough so the attorney general's office will not be able to stop them.
Attorneys for Family Star presented as evidence computers, cleaning products and health aids that they said were company products. They said the state does not believe the company is legitimate because it is in its embryo stages and has not finished organizing.
Family Stars' attorneys also presented a letter to the court saying they will refund the membership fee to all unhappy members.