|FOR IMMEDIATE RELEASE:|
April 25, 2000
|Consumers eligible for settlement can check the status of the proceedings at the FTC website or call the FTC's Equinox hotline at 202-326-2103.|
Attorney General J. Joseph Curran, Jr., announced today that a U.S. District Court judge in Las Vegas, Nevada, approved a settlement resulting in the liquidation of Equinox International Corp., and the formation of a consumer restitution fund of $30 million to $40 million. The settlement halted the three-week trial between one of the nation's largest multi-level marketing companies, the Federal Trade Commission and eight states, including Maryland.
Consumers who lost money investing in what they thought was a legitimate multi-level marketing business will share as much as $40 million under the terms of the settlement, which also bars Equinox President, Bill Gouldd, from any future involvement in any multi-level marketing scheme, for life. The settlement requires dissolution of Equinox, Advanced Marketing Seminars, Inc., BG Management, Inc., and certain personal assets owned by Gouldd, who is permanently barred from offering securities in Maryland under the settlement.
"I am very pleased with this settlement and proud of the efforts of our Securities Division, which served as lead trial counsel for the eight states involved," General Curran said. "Not only is there a restitution fund in place for the many victims, including those from Maryland, the settlement also prevents Equinox and its president from bilking hard-earned money from honest people ever again."
Equinox, based in Las Vegas, Nevada, purported to sell environmentally-friendly products such as water filters, nutritional supplements, and skin care products through a network of independent distributors. In 1996, Equinox was listed as the fasting growing company in the United States, according to Inc. Magazine. According to the lawsuit filed August 3, 1999, Equinox distributors ran ads in "help wanted" sections of newspapers implying that salaried positions were being offered. People often responded to what they believed to be job interviews, only to be led into high energy sales presentations designed to recruit new distributors.
The suit also alleged that Equinox told recruits that they could earn money by selling products, but emphasized that the real way Equinox distributors make money is through recruiting. New recruits were encouraged to purchase $5,000 worth of products so they could enter the program at a level where they could receive commissions from sales made by their recruits. Distributors also were encouraged to rent desk space in local offices for $300 to $500 a month, to subscribe to phone lines so they could being recruiting others, and to attend training seminars costing $300 to $1000 plus travel and lodging expenses.
Equinox operated through several Maryland offices or "training centers," including Paramount of Baltimore; World Solutions of Bel Air; International Solutions Group of Frederick; and Capital Marketing of Silver Spring.
The suit further alleged that a very small percentage of distributors who became participants in the Equinox program actually made more money than they expended for front-end expenses, and that a vast majority of distributors discontinued their participation in the program with little or no earnings.
State law enforcers alleged violations of state securities laws, deceptive trade practices laws, false advertising laws, pyramid laws, and licensing requirement laws. Gouldd and Equinox faced charges by the FTC and law enforcement authorities from Maryland, Hawaii, Michigan, Nevada, North Carolina, Pennsylvania, Tennessee, and Virginia.
Consumers who believe that they are eligible to participate in the redress distribution may check on the status of these proceedings by visiting the FTC's website at www.ftc.gov, or by calling the FTC's Equinox hotline, 202-326-2103.