Office of the Attorney General News Release Archive
Wednesday, May 9, 2001
CORNYN GETS AGREED JUDGMENT TO HALT ONLINE PYRAMID
Double Eagle Marketing Permanently Enjoined from Promotional Schemes
AUSTIN - Texas Attorney General John Cornyn has wrapped up one of the first cases investigated under the auspices of his Texas Internet Bureau, which worked in conjunction with the Consumer Protection Division to resolve this case.
Owners Scott and Tami Anderson of Double Eagle Marketing agreed to the terms of a final judgment and permanent injunction in papers filed in Travis County District Court. The judgment prohibits the two from operating any illegal promotional pyramid scheme such as the one they unfurled over the Internet in this case.
Double Eagle Marketing, based in Killeen, also must provide a full refund to each person who registered a complaint with them. The court ordered the company to pay $5,000 in attorneys' fees to the state.
The defendants were cited under the Deceptive Trade Practices and Consumer Protection Act because they structured and marketed their online business in such a way as to solicit customers who were willing to pay for the opportunity for future compensation through the recruitment of other participants into the scheme.
For example, the defendants advertised the Double Eagle Marketing program over the Internet as a home-based business. In order to participate in the program, a person was required to pay a $40 initiation fee. The company then gave the new "partner" information and sales devices designed to help the partner recruit others into the program. For each new member recruited, the partner would receive a 50 percent commission. The newly recruited partners in turn would recruit, and the original partner would also enjoy commissions from these added members down-line, for a total of six cycles.
The agreed judgment also prevents the defendants from misrepresenting the actual or potential earnings a person can make by becoming a partner in the program.
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