7 Apr 2009 - Bill McCullough owner of Sovereigh Seas called and said  NO MULTIPLE POSITIONS IN Sovereign Seas.  I asked him about customers.... Who DO NOT Belong to the pay plan!  SEE SKY Biz hit below - SkyBiz begging to find real Customers.  Of course this resembles Sky Biz because Bill ran the back office for Sky Biz (as a vendor and not an owner - also ran ZibyCom)  Here is your Editors concearn still:




2 Apr 2009 - More than just your Editors opinion: Let’s see we whip in a little hocus pocus about everybody owning the oceans, backed by going green and being benevolent and saving sea life.  Tears ran out of the corners of my eyes.  The ower is strong on being legal by only allowing one binary position - Good!  But, how many customers who do not belong to the pay plan are going to signup for hocus pocus?  Big question?


SKYBIZ Pyramid Scheme Trying to Get Legal Too Late - Skybiz's Old 911 !
In EARLY 2001 I was hired by several top skybiz distributors to try to get Skybiz legal.  Of course Skybiz did not listen (Eli Masso).   Yesterday an e-mail went out (about a year late) trying to identify customers!   To be legal a company has to have customers  that do not participate in the compensation plan to stay on the good side of the law!  If not, expect your company to be hunted down like a dog.   Here is the Skybiz plea for customers!   Editors note:  Notice the SkyBiz cry for Customers not belonging to the pay plan.; Leslie Tumlin;
Sent: Tuesday, September 18, 2001 12:04 PM
Subject: Trial Preparation

Friends of SkyBiz:
If you know anyone who (in U.S. preferable) would want to be a part of effort described below, please have them reply to: Zakia Maaroof

There is only a possibility those who volunteer will actually be used. Please do not indicate to anyone that being a witness is for certain. Corporate will contact those who respond, and evaluate the need, accordingly.
Thank you,

We need the names and addresses  VERY SATISFIED consumers that bought the SkyBiz products and have never sold the business opportunity. We also need the names and addresses of five VERY ZEALOUS Associates who are in the program, but haven't made a whole lot of money. Please keep in mind, we need consumers and associates who would not be relunctant about testifying in court and who presumably are in the United States (for travel purposes). If any of the potential witnesses you suggest are outside the U.S., please identify what country they're in. I need this information at your earliest convenience. Thank you.

Martin Allen Brown,
General Counsel
World Service Corporation (PARENT OF SKYBIZ

20 June 2005
The UK Office of Fair Trading says 25,000 UK victims the illegal international pyramid scheme Skybiz could get money back as part of a US  Federal Trade Commission redress program.

The receiver for the U.S. Federal Trade Commission, has $20 million set aside to compensate victims. About 25,000 are estimated to be in the UK.

Skybiz, based in Tulsa, Oklahoma, ran from 1998 and 2001.  Skybiz sold a work-at-home business scheme in which consumers bought e-commerce Website for $115-$125.  The big problem is many people bought multiple sites (3,7,15,36) to make more money.  The Skybiz opportunity was presented as a way to make quick riches if they recruited more members.  Over a million websites were sold in the US, UK, Ireland, Australia, South Africa, New Zealand and Canada. Skybiz was raided and shut down by the FTC then taken to Civil court  for what was uncovered as a classic pyramid scheme.  What was sad was the Skybiz legal defense team put out a request via email for anyone that had been just a customer (did not participate to make money) and used a Website only.  Out of over 1.25 million Skybiz websites they only got 5 people who said they used the Skybiz Website as a Skybiz Customer and not member!  That  completely killed Skybiz's defense because the FTC had started using a Customer measurement to determine Pyramid Scheme status.  The FTC likes 50% Customers (who do not belong to the pay plan) for any company to NOT be considered a pyramid.

The UIK Office of Fair Trading is putting out that  consumers who think they may have been a victim of Skybiz are encouraged to make a claim through the redress Website:

19 May 2003: The Federal Receiver is ready to start passing out money in August.  Make sure that your are on the list to collect money out of the $20 Million Dollars.   Check or get your name on this Skybiz list ASAP!    Send an email and this link to friends ASAP/!
To Submit Skybiz Claim:
Latest Information on Redress Fund:
Change Your Address or Email information on Skybiz Database:
Check your current Skybiz claim  status:
Sky Biz WatchDog July 2001
Skybiz Legal Staff:  No answer to my call about stealing distributors websites - shame, obviously they need help with their workload!  Here it is!  Get ready for a Government Hit you thieves!!!

From the: MLM Insider - MLM Watch Dog Printed Magazine Feb 1998
Don't Kid Yourself, It's War Out There And, You're Next!!

Edwin B. Wainscott
By: Paul R. Greenberg

         Many of you have heard of FTC's attack on JewelWay and more recently on FutureNet.  Some of you have heard of SEC's attack on International Heritage.

         What these and many (possibly as many as 400) less known Government prosecutions have in common is that the Government has been monitoring and perhaps manipulating your distributors for months.  When you first become aware of them, it's too late or at least, awfully late.

The Government compiles a voluminous and seemingly compelling lawsuit, replete with evidence (often resulting from leading questions asked by their agents to overzealous or naive distributors who believe the agents are potential distributors), transcripts (of surreptitiously recorded field meetings) and arguments, and delivers it to a Federal Judge wherever in the country it suits the Government to do so.  The Company is unaware.

In the vast majority of cases, the Government meets with the Judge on an ex parte basis  ex parte (in this case) means that only the Government appears, giving its one-sided conclusionary version of the facts and the law.  When doing so, the Government will often submit statements made by your distributors, which the Government represents is how the Company does business.  The Company receives no notice and does not know the hearing or meeting is occurring.

The Government asks the Judge for a temporary restraining order (essentially, putting the company out of business).  Invariably, the Government also asks for the appointment of a receiver (who ousts management from managing and who becomes the Government's man at the controls) and for a freeze on the assets, including bank accounts, of the Company and often, of its principal officers and shareholders.

Guess what?  In virtually every case, the Government gets what it asked for:
     - a temporary restraining order that brings an immediate, jarring halt
         to the business of the company,
     - the appointment of a receiver who displaces management of the company and
     - a freeze of company and individual assets, including bank accounts.
After all, the Judge has no one in front of him or her to contradict the one -sided Government's version of facts and applicable law.

  The first thing that the Company and its management and shareholders learn of all this, is when the Federal law enforcement officials arrive, taking over the business premises and ejecting management from the building.

  At the same time, the Government's massive public relations offensive begins  a blaring announcement over the Internet, a blaring press release issued to the media, perhaps a press conference  all telling how a major fraud has been attacked and stopped in its tracks.  Try resurrecting your business' reputation and your own after that!  Try doing anything when you are out on the street, stripped of control over the Company!

  When the telephone lines jam up with concerned customers and distributors, the receiver (essentially, a liquidator) mishandles the calls and promotes, rather than ameliorates, panic and damage to the Company as an ongoing concern.

  Meanwhile, in a competitive industry that is highly dependent on momentum, motivation and reputation, you have immediately lost all three.  Not only is the Government engaging in a public relations battle against you, your competitors are often using those press releases to woo your distributors away.

  The Company's "day in court" is about a week later when it gets to try to argue against the Government's request for a (preliminary) injunction that will last during the pendency of the case  that is, assuming the Company can find and pay qualified lawyers (no easy task since company and personal bank accounts are frozen) and arm them in a pretty short period of time with  the relevant facts and documents (no easy task since management is often unable to revisit the business premises after the TRO is put in place and before the hearing on the preliminary injunction).

  Relax we are here to help you?  Too much complacency kills, keep in mind that the Government is far more likely to be believed by the Court than you are.
  The Government has its team in place.  Their attorneys, witnesses and experts have already made similar presentations to courts throughout the country.  The Government, in fact, will present to the court as evidence of the correctness of its position the consent orders it has obtained from companies not in a position to respond to Government litigation.

  The reality is that most of the orders put into place on the ex parte request of the Government will remain in place following the hearing for preliminary injunction.  If and when you get your company back to run, it will likely be dead, or at least dying.

All in all, not a pretty picture.  What must you do to prevent this from happening, or at least to maximize the chances you'll be able to survive?

First, have knowledgeable MLM counsel review your compensation plan, your distributor agreement and policies documents, and your other forms and procedures to search for ticking time bombs  practices or appearances which might be unlawful, or at least which might be the Red Flag of the Day in the eyes of active law enforcement.  The infamous Webster v. Omnitrition case is terrible in its interpretation or reinterpretation of the Koscot test for pyramiding and its application in the FTC decision involving Amway!  But, Webster is being used by State and Federal enforcement officials alike for some of its gratuitous (and wrong) disapprovals of commissioning purchases by downline participants.  Accordingly, participant purchases and "retail sales" are the hot issues of the day. 

But, Webster is illustrative of an important (and correct) principal  Anti-pyramiding provisions must not only appear in the documentation, they MUST be enforced in practice. 

In short, what each MLM company needs is an immediate and a periodic COMPLIANCE AUDIT conducted by knowledgeable MLM counsel.

Second, line up and provide full orientation and support to YOUR TEAM OF EXPERTS before the action starts those who will be able to hit the ground running if/when and wherever the Government attacks. 

You'll need lawyers who are already thoroughly familiar with your Company's philosophies and practices and with MLM law, and who have undertaken to go immediately wherever the action may be within hours of your first notification of Government activity!  Since the lawsuit can be brought anywhere in the United States, you need MLM counsel who will be on a plane almost immediately:

-  ready to present a full and fair picture of your business and its   legitimacy,

-  ready with a brief - bank on all relevant "substantive" and "procedural"   issues (e.g., pyramiding law, securities law, postal lottery law, business   opportunity law, etc.), -  ready to request and hold within hours or a day a hearing (with the Judge who entered the TRO/receiver/freeze) seeking appropriate   revisions to those orders and starting to present the Company's  positions on the facts and the law,

-  ready to take depositions of the Government's witnesses and those   likely to help the Company in its defense (including marketing professionals and marketing professors).

-  ready to persuasively present the Company's positions on the facts and the law well in advance of the first substantive hearing, in order counter at the earliest possible moment the Government's one-sided (ex parte) story.
The first impression given by your TEAM is often the most important in persuading the Judge that you operate a legitimate business.  Thus, the reputations and presentations of your lawyers and experts are key.

If before the battle begins you've chosen well and given the lawyers the resources necessary to BUILD YOUR TEAM AND BE PREPARED FOR BATTLE , they'll be at your side and able to respond quickly, decisively and effectively, freeze or no-freeze, receiver or no-receiver.  Your lead MLM lawyer must be your ally, capable of directing you and the assembled team (including lawyers and clerks in the city of battle, but also lawyers and others located throughout the Country) in the battle for the survival of your Company and the thousands of distributors who have built small businesses in active partnership with you.  That is why you and that lawyer need to have come to a close relationship of trust and full information  well before action is undertaken by the Government.

You'll also need public relations experts and other communicators to get your story across - essentially, to counter the barrage of press and Internet releases that the Government uses to promote itself and to (prematurely) tout its "victories."  You'll need a communications center with telephone and Internet access and you'll need personnel capable of communicating with your distributors.  You'll need home phone numbers, fax numbers, etc.

The Government counts on you being on the sidewalk, dazed and confused, unable to mount an effective defense, eager to take whatever kind of deal is offered (if any).  By the time it takes action, the Government has convinced itself that your Company is operating illegally, and it believes you cannot withstand their offensive.  If you have taken the appropriate steps, you have the ability to present a swift and persuasive response that the Government has acted inappropriately.

Edwin B. Wainscott is a member of the Executive Committee of Streich Lang as well as a member of its Direct Sales practice group whose expertise covers the gamut of subjects of concern to multilevel marketing companies.  Ed has represented direct selling companies since the early 1980's, both on litigation and business matters.  Ed's base of operations is Phoenix, Arizona.  His telephone number is 602 229 5704 and his fax number is 602 229-5690.

PAUL R. GREENBERG has advised multilevel marketing companies for more than 25 years on a broad range of legal and strategic issues.  Paul served as inside General Counsel for Shaklee Corporation and Quorum International.  Most recently, Paul acted as MLM special counsel for International Heritage (vs. S.E.C.) and FutureNet (vs. F.T.C.).

More On Sky Biz Pyramid Case Data Files

Sovergeign Seas and SkyBiz


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