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pebbly-woman

Yet another "home based business" promoted by junk faxer Steven Burke d/b/a Network Marketing News has been exposed as an illegal pyramid scheme.

June, 2001 - Skybiz.com, a "multi level marketing" scheme that was promoted by some participants through "junk fax" ads, was accused of being "a massive illegal pyramid scheme" by the Federal Trade Commission, and had its assets frozen in a temporary restraining order issued against it.

Robert Braver, a Norman, Oklahoma consumer who has brought over 40 lawsuits against junk fax senders since 1998, filed suit against several Skybiz distributors and fax broadcaster Steven Burke, who runs "Network Marketing News" near Toronto, Ontario.

After securing settlements with several of Burke's clients who promised to stop sending unsolicited faxed ads and filing suit against two others, Burke filed a groundless civil Racketeering (RICO) lawsuit against Braver and his employer.

Braver in turn filed a countersuit in the case, which is pending in the United States District Court for the Western District of Oklahoma, against Burke for his part in sending the junk faxes, in addition to a pending case in Cleveland County (Oklahoma) District Court against as many as 200 advertisers who hired Burke to send ads for them.

Braver estimates that he is "entitled to minimum statutory damages of at least $150,000, or up to $450,000 if the jury finds that the unsolicited faxed ads were sent willfully or knowingly". However, Braver added, "unfortunately, it's a long, hard road between being entitled to something under the law and going out and getting it when you're up against a lucriative illegal industry. Burke himself bragged that he was on track to making $800,000 per year. In the meantime, fighting this nuisance suit has cost several tens of thousands of dollars that my family and my employer can't afford."

While the transmission of unsolicited faxed advertisements is prohibited under federal law as well as many state laws, enforcement is largely in the hands of consumers, according to Braver. "We have hundreds of violations of the federal law, as well as criminal offenses under Oklahoma law for junk faxes. And that's just for the faxes that Burke sent to me. Also, promoting a pyramid scheme in Oklahoma is a very serious matter that can land someone in prison. Nonetheless, civic minded consumers such as myself who have the gumption to fight these crooks are largely on their own."

FTC Complaint

Temporary Restraining Order


Federal Trade Commission Press Release (June 18, 2001)

Link to official copy on FTC site

Court Appoints Temporary Receiver over International Pyramid Operation

Illegal Scheme Claims It Is Operating in 200 Countries World Wide

The Federal Trade Commission has asked a U. S. District Court Judge to halt the unlawful operations of SkyBiz.com, charging that the operation that purports to sell online tutorials on Web-based products is actually a massive illegal pyramid scheme which may have conned consumers around the world out of approximately $175,000,000. At the request of the FTC, Chief Judge Terry C. Kern has temporarily halted all unlawful activities of the SkyBiz operation, frozen the defendants' assets to preserve them for consumer redress, and appointed a receiver, pending the preliminary injunction hearing scheduled for June 26, 2001.

The FTC suit was filed in U. S. District Court in the Northern District of Oklahoma. The corporate and individual defendants are based in Tulsa. The corporate entities named in the suit include: SkyBiz.com, Inc; World Service Corporation; Nanci Corporation International; and WorldWide Service Corporation. Several individual defendants were also named, including: James S. Brown; Stephen D. McCullough; Elias F. Masso; Nanci H. Masso; Kier E. Masso; and Ronald E. Blanton.

In papers filed with the court, the FTC alleges that since late 1998, the defendants have promoted a work-at-home business opportunity with claims of quick riches. One SkyBiz presentation claimed, "This system was put together by a gentleman named Eric Rasmussen who basically joined SkyBiz and six months later was able to retire with an income of about 400,000 a month. Currently, [he] lives in the Gold Coast of Australia and he's making 76,000 a week and growing." In in-person sales presentations, seminars, teleconferences, Web site presentations and in other marketing material, the defendants touted the opportunity to earn thousands of dollars a week by recruiting new "Associates" into the program. They provided CD-Roms, computer disks, videos and books promoting the SkyBiz programs and they provide a PowerPoint presentation on their website that can be downloaded to aid in recruiting new members. The cost to join the SkyBiz Program is $125, ostensibly used to buy an "e-Commerce Web Pak," but in reality was to purchase the right to receive compensation for recruiting additional participants. Participants were urged to invest in more than one "Web Pak," to maximize their earning potential.

The FTC charged that the claims that consumers who invested in SkyBiz would make substantial income were false; that failure to disclose that most people in pyramid schemes lose money is deceptive; that defendant provided the means and instrumentalities for others to deceive consumers by providing speakers and promotional materials that made the false and misleading claims; and that SkyBiz was actually an illegal pyramid scheme. All four violate the FTC Act.

The complaint was filed by the FTC in U.S. District Court for the Northern District of Oklahoma on May 30, 2001, under seal. The seal was lifted June 8, 2001.


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© 1999-2005 Robert H. Braver, Norman, Oklahoma. Nothing in this web site should be construed as legal advice. This web site is provided for information purposes only. Opinions presented are those of Mr. Braver (or other contributors as indicated). The operators of this site will not give, sell, or otherwise transfer email addresses stored on any of our hosts to any other party for the purposes of initiating, or enabling others to initiate, electronic mail messages.


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