WASHINGTON, Nov. 28, 2000 -- Defendants in a pyramid scheme that disguised itself as a legitimate work-at-home operation have agreed to settle Federal Trade Commission charges that the scheme violated federal laws. The settlement bans the defendants from engaging in pyramid schemes in the future, bars misrepresentations about the availability and profitability of jobs and requires that the defendants pay $72,000 in consumer redress.

On July 7, 1999, the FTC alleged that DP Marketing and its principals, David Martinelli, Jr. and Deana Plourde, sent consumers unsolicited commercial e-mail -- "spam" -- with messages such as:

"National Marketing Company seeks individuals to handle office duties from home. This is a full or part-time position with a salary of $13.50/hr. The position consists of processing applications for credit, loans or employment, as well as online consumer service."
Consumers responded by visiting DP Marketing's web site or by calling them. Whichever route they took, they were informed that the $13.50 per hour jobs were for processing orders for DP Marketing from the comfort of their own homes. They were told that no experience was necessary, and that for a "registration fee" ranging from $9.95 to $28.72 they would be sent everything they would need to get started, including telephone scripts, product sheets, time sheets and an ID number.

What the consumers actually got was a kit instructing them first to place advertisements identical to the ones they had responded to, and then to read the same script to people who responded to their ads. Instead of $13.50 per hour, the money consumers could earn was based on the number of new victims they could recruit.

The FTC charged that the defendants violated federal law by misrepresenting to consumers that DP Marketing offers jobs at a specified salary; by failing to disclose that they are offering a pyramid work-at-home scheme; and by providing the "means and instrumentalities" to others to commit deceptive acts that violate federal law.

The FTC order imposes a judgment of $72,312 for consumer redress, based on financial declarations provided by the defendants. Should the court find that the defendants misrepresented their financial situations, $430,140, the total amount paid by consumers to DP Marketing, becomes due.