Attorney General Bob Butterworth
News Release
January 5, 2000
WEB COMPANY CHARGED WITH OPERATING PYRAMID SCHEME
TALLAHASSEE -- A Boca Raton-based company that has failed to live up to its promise to establish a high-tech merchandizing network has been charged with running an unlawful pyramid scheme, Attorney General Bob Butterworth announced today.
A civil complaint was filed in Palm Beach County Circuit Court against Professional Resources System International Inc. (PRSI) and its principal operators, William Caudell, Gil Gillespie, Salvatore Argento, Joseph Rotunno and Ben Tobin. The complaint seeks consumer restitution and civil penalties of up to $10,000 per violation of the state's Deceptive and Unfair Trade Practices Act.
Through its Internet web site, PRSI last April began offering consumers the opportunity to buy into what the company described as a "private intranet." The private network was promoted as a family-friendly alternative to the Internet because pornography and other objectionable material would be prohibited.
Butterworth said PRSI told consumers that for a $175 fee they could shop on the network and have a home page through which they could sell their own goods or services as "CyberMerchants." For a $295 fee, the company said, consumers could not only obtain marketing privileges but become "CyberManagers" entitled to earn commissions by recruiting other network investors.
"Approximately 60,000 consumers have poured about $18 million into the company but the network has yet to materialize and no products are being sold on it," Butterworth said. "In the meantime, 'CyberManagers' have recruited thousands of investors so that the only money being earned is through the recruitment process. The generation of earnings through investor recruitment coupled with the lack of a tangible product add up to an old fashioned pyramid scheme cloaked in modern technology."
Butterworth added that PRSI's Internet web site includes a promotion for Kids 4 Tomorrow, a foundation that allegedly works with former National Football League players to "interrupt the downward spiral of negative behavior in children." The company also said that a portion of every sale on the PRSI network would go to fund children's foundations.
Despite those claims, however, Butterworth said in his complaint: "The foundations, if they even exist, are not incorporated in Florida, and are not licensed to solicit within the State of Florida. Furthermore, PRSI is not registered as a professional solicitor for Kids 4 Tomorrow, which is required by (state law) if PRSI were to lawfully collect funds for a true charitable organization."
The complaint was prepared by Assistant Attorney General Jody Collins and was filed in conjunction with search warrants executed by the Boca Raton Police Department.
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