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Pyramid Scheme Alert (PSA) provides current and historical news items that are of interest to our members and visitors. None of the reports or commentaries is intended to imply that any of the referenced companies have been charged or convicted as illegal pyramid schemes.

Related Information

Purchase Plus Shut Down, 9/2/00

Back in Business, 9/29/00

Denies Allegations, 10/14/00

Purchase Plus Buyers Group Shuts Down, Reopens Amid Controversy

On August 23, 2000, the office of the Ohio Attorney General filed suit against Purchase Plus Buyers Group, an MLM scheme which offered consumer discounts and rewards to members for recruiting others. The company immediately filed for bankruptcy, leaving at least $100 million owing to participants.

Purchase Plus had about 65,000 members, many of whom had invested as much as $20,000. Purchase Plus may have preyed particularly on members of the Mormon church. The company was started by Gene Arnold, a member of the Church of Jesus Christ of Latter-day Saints, and several other members of the church in 1997.

A spokesman from the Attorney General's office told the press that the closure would not change the lawsuit, and that restitution for members would be sought.

Gene Arnold had sold the company in April to Ted Lindauer, a California lawyer who has been involved with other companies that have been scrutinized by regulators around the country. He represented Excel Communications when it was fined $80,000 by the Federal Communications Commission.

The Reopening

At the end of September, Purchase Plus reopened, offering phone cards and food supplements. A letter was posted on its website telling its customers:

"Sign up yourself and your family and friends . . . thereby assisting not only Purchase Plus but also your fellow associates and customers. . .''

Ron Miller, president of the Greater Columbus (OH) Better Business Bureau, suggested that consumers get everything in writing.

Gisela Baumann, who won a judgment returning the $3,000 she lost, said, "I would never trust them. Stay away from them," according to the Columbus Dispatch.

Purchase Plus Fights Back

On Tuesday, October 10, Purchase Plus challenged Ohio's jurisdiction in the case, claiming that the 65,000 participants were not "consumers," under Ohio's laws, but sales associates for the company. The state claims that Purchase Plus violated consumer protection laws and deceived customers.

This report compiled from copyrighted articles at MLMSurvivor.com. Used by permission.

This page last updated on 10/11/2004