In May 2001, the FTC filed suit in U.S. District Court in Tulsa, Oklahoma charging that Tulsa-based SkyBiz and its principals promoted a pyramid scheme with false earnings claims. After a hearing, the district court entered an injunction against Skybiz from continuing business, froze the assets of Skybiz and its related companies and owners, and ordered funds overseas to be repatriated to the U.S. Skybiz offered an opportunity selling personalized Web site businesses to consumers for $125. Skybiz attempted to avoid a pyramid selling scheme finding by offering to each new customer a set of Web site creation tools. However, the district court found that the “product” was of little value, and that many of the sites were never used by participants and were only purchased to gain access to the chain of commission payments generated from recruitment. On appeal, the 10th Circuit Court of Appeals upheld the injunction.

Full case and summary are available at: http://www.mlmlegal.com/legal-cases/FTC_v_SkybizcomInc.php