Fortune Hi-Tech Marketing
| Company type | Private |
|---|---|
| Industry | Multi-level marketing |
| Founded | January 2001 |
| Founder | Thomas Mills, Paul Orberson |
| Defunct | January 2013 |
| Fate | Shut down by Federal Trade Commission for operating a pyramid scheme |
| Headquarters | Lexington, Kentucky , United States |
| Products | Mobile phone services, Dish Network television services, hair care products, other retail products |
Number of employees | 160,000 (independent representatives) (2013) |
Fortune Hi-Tech Marketing (FHTM), headquartered in Lexington, Kentucky, was a company that utilized a multi-level marketing (MLM) approach to distribute consumer products and services. Established in January 2001, the business was terminated in January 2013 by the Federal Trade Commission (FTC) along with state authorities due to its operation as a pyramid scheme.
Business model
The organizational framework of FHTM was based on multi-level marketing, where individuals were recruited as representatives upon payment of enrollment fees ranging from $99 to $299. These representatives received earnings through commissions on product sales and additional bonuses for enrolling new members. The company offered products with low profit margins, providing commission rates between 0.25% and 1%, which were notably lower compared to standard MLM enterprises.
Among the products marketed were mobile phone services provided through Simplexity, Dish Network television services offered as an independent contractor, hair care products, and various other retail offerings. FHTM promoted itself by referencing affiliations with prominent brands such as AT&T, Dish Network, and Sprint; however, these connections were often indirect and lacked formal endorsement from those corporations.
In disclosures made in 2010, FHTM revealed that nearly 95% of its representatives earned less than $3,100 annually, with 29% generating no income at all, underscoring significant difficulties in equitable revenue distribution and overall financial viability.
History
Fortune Hi-Tech Marketing was launched in 2001 by Thomas Mills and Paul Orberson, both previously employed by Excel Communications. Orberson, who also had experience as a high school basketball coach, held a significant leadership position within the company.
In 2010, FHTM reached a $1 million settlement with the Montana Securities Commission following accusations of operating an unlawful pyramid scheme that compensated participants primarily for recruiting others rather than for selling products. While the company did not concede any wrongdoing, it agreed to lower its entry fees from $299 to $75 for Montana residents and to $99 for representatives elsewhere. At that time, disclosures indicated that 30% of participants earned no income, and among those who did earn money, the average monthly income before expenses was $94.
After resolving issues in Montana, FHTM became subject to investigations by multiple state and federal agencies. In January 2013, the FTC alongside Attorneys General from Kentucky, Illinois, and North Carolina filed lawsuits against the company. Authorities conducted a raid on FHTM’s offices in Kentucky and placed the firm under receivership while it reportedly had approximately 160,000 independent representatives. The FTC asserted that the majority of affiliate earnings were derived from recruitment activities rather than legitimate product sales—a key characteristic of pyramid schemes.
Paul Orberson died in December 2013 at age 56 or 57 after battling cancer.
In May 2014, FHTM reached a settlement with both Kentucky officials and the FTC requiring payment of $7.75 million in restitution to former customers. Additionally, company executives were prohibited from participating in future multi-level marketing ventures or profiting from customer data. The agreement did not include any admission or denial regarding whether FHTM operated as a pyramid scheme.