The Pennsylvania Attorney General brought an action against James & Rodney Tolleson alleging their business was an illegal "referral sales" scheme. The Tollesons consented to stop selling memberships in their scheme while the action was pending. However, sales events continued and memberships were sold in nearly the same way as before, except that those doing the selling were now called "franchisees" rather than "executive members." The PA Attorney General brought a claim for civil penalties for violation of the consent decree. The Tollesons claimed that they had no control over the sales activities of the franchisees because they were independent businessmen. Further, they claimed that because the business was now selling franchises instead of memberships it was now in compliance with the law.

Also available at: http://www.mlmlegal.com/legal-cases/Commonwealth_of_Pennsylvania_v_Tolleson2.php