About Pyramid Scheme AlertPyramid Scheme Alert ResourcesPyramid SchemesDonate to PSAPyramid Scheme Alert Action


Notice:

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.


Federal Trade Commission Sues Streamline International, Inc.

June 20, 2001

The Federal Trade Commission is suing Streamline International, Inc., an internet-based money-making scheme, in the Southern District Court of Florida. The FTC charges that the multi-level marketing scheme is actually an illegal pyramid scheme. The company supposedly sells a line of dietary supplements and health care products. Streamline is headquartered in American Fork, Utah.

Named in the suit are J.R. Jackson doing business as an officer of the corporation, as an individual, and as Action Enterprises; and Robert "Bob" Waitkus, doing business individually and as WorldWide Opportunities Network.

Recruitment-related commissions are paid to those make required minimum purchases each month. This is known as a "pay to play" feature, and is one of the hallmarks of pyramid schemes.

Additionally, the FTC charges that the company has misrepresented and deceptively advertised its products.

The FTC is seeking a permanent injunction, and equitable relief for consumers who've been defrauded.

According to the complaint, Streamline, Inc. has been soliticiting consumers since 1996 from various websites. The defendants also promote the program through non-internet venues such as radio advertising, direct mail, and print advertising.

Defendants require participants to make minimum monthly purchases in order to be eligible to earn commissions. . . Defendants promise to create a downline for participants through a device called the "Online Recruiter." Defendants also promise monetary rewards for participants to personally recruit other individuals into their downline.

In their marketing materials and on their websites, Defendants have represented, expressly or by implication, that participants will receive substantial income by participating in the Streamline program, including, but not limited to, the following representations.

YES YOU CAN MAKE $500-$2000 A MONTH FOREVER!!!

NO MORE WORKING FOR THE NEXT 10, 20, 30 OR 40 YEARS. WORK PART-TIME THIS YEAR AND RETIRE NEXT YEAR.

The average pay-out . . . if no one sponsors anyone personally is $13,965 per month. . .

In reality, the vast majority of participants in the Streamline program achieve little or no financial success. . .

Defendants have induced thousands of consumers throughout the United States. . . to participate in the Streamline program.

The complaint details five counts of violations of the law by Streamline, Inc. and the other defendants. Four of these involve deceptive trade practices, and one relates to the law regarding illegal pyramid schemes. These include:

  • false and misleading income representations, which constitute a deceptive trade practice
  • commissions are paid for recruitment, with no dependence on the sale of product
  • Defendants' failure to disclose that the majority of participants will receive little or no income consitutes a deceptive trade practice
  • providing participants with websites that contain the false and misleading statements constitutes a deceptive trade practice, and
  • Defendants' representations of their products contain false and misleading information and constitute a deceptive trade practice.

In reality, the vast majority of participants in the Streamline program achieve little or no financial success. . .

This page last updated on 10/11/2004