Busted! The FTC Takes Action
In a landmark move, the Federal Trade Commission (FTC) has officially come down hard on individuals involved in a cryptocurrency pyramid scheme dating back to 2018. These four men — Thomas Dluca, Eric Pinkston, Louis Gatto, and Scott Chandler — now face not just legal reckonings, but a permanent ban from all forms of multi-level marketing. Because apparently lying and recruiting don’t boost your karma.
The Cost of Misrepresentation
The settlement isn’t just a slap on the wrist; it comes with a hefty price tag totaling over $500,000. Following their deceptive practices, the FTC froze the defendants’ assets back in March 2018, halting what they described as a cascade of misleading promises. The allegation? It seems these gentlemen were quite creative, promising returns that read like a fantasy novel: paying $100 could lead to “monthly income” of $80,000. Spoiler alert: that didn’t happen for most participants.
Chain Referral Schemes Unraveled
So how did this scheme actually operate? The defendants touted programs named Bitcoin Funding Team and My7Network, which lured in unsuspecting investors with the allure of cryptocurrency riches. These weren’t just regular referral programs; they were chain referral schemes where the only way to make money was to keep roping new participants into the mix. Sounds like a game of musical chairs, but with fewer seats and more regrets.
Promises, Promises!
Participants were led to believe they could quickly recoup their investments, but alas, reality hit harder than a rogue wave. Most ended up with empty pockets and crushed hopes. It seems that in the world of crypto, the only guaranteed return was on disappointment!
Payments Made: Who Owes What?
Now, onto the financial fallout: as part of this settlement, Dluca has been slapped with a bill for $453,932, while Chandler has to come up with $31,000. Pinkston’s judgment amounted to $461,035 but has been lightened to $29,491 due to his supposed financial struggles. We’re left to wonder how broke he truly is — if it turns out he was cooking the books, he’ll need to cough up the entire judgment. Moral of the story: be honest or prepare to pay!
Shifting Focus: Next Steps for the FTC
The FTC isn’t slowing down anytime soon. Earlier this year, they took aim at a startup named iBackPack for mishandling a whopping $800,000 in funds during its crowdfunding escapades. It seems the Commission is on a roll, and pyramid schemes are at the top of their hit list.
In conclusion, the end of this crypto saga marks a crucial step in protecting investors from alluring lies decorated with promises of easy money. As the crypto world continues to expand, the FTC is ready to take on new challenges. Remember folks, if something sounds too good to be true, well, it probably is!
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