The Federal Trade Commission and the Nevada Attorney General sued International Markets Live Inc. and its affiliated companies in federal court Thursday for allegedly orchestrating a deceptive multi-level marketing operation that generated over $1.2 billion in global sales by preying on young, often minority consumers with promises of financial freedom through trading and recruitment.
Alan Rosenberg, a partner at Markowitz Ringel Trusty + Hartog in Fort Lauderdale, Florida who specializes in digital assets and bankruptcy-related litigation, noted that social media is a powerful tool in modern society, as it enables users to reach a global audience with relative ease, often with little to no censorship or oversight.
“These same features, however, also allow financial criminals to easily target and manipulate potential victims by projecting false images of legitimacy,” said Rosenberg, who is not involved in the matter. “The allegations against IML highlight how financial criminals are utilizing technology and social media to expand the breadth of their fraudulent schemes.”
International Markets Live, which has operated under IML and most recently rebranded as IYOVIA, did not immediately respond to a request for comment.
The FTC and Nevada AG alleged that the scheme dates back to at least 2018, when IML “educators” taught consumers how to earn a considerable income by trading foreign exchange, binary options, cryptocurrency, and stock markets. At the same time, the defendants told consumers they could earn a significant income as IML salespeople by selling these services.
In doing so, the defendants are accused of marketing—through a global multilevel marketing network—examples of the results of these supposedly profitable trades, including images and videos of luxurious and expensive lifestyles, according to the 71-page complaint. These “deceptive earnings claims” were allegedly made though social media platforms, telemarketing and live events.
However, in truth, a substantial percentage of purchasers of the trading services lost money through those trades, according to the defendants’ own data, which showed that few participants received over $500 annually, despite spending far more to maintain access.
As a result, the outfit’s CEO Chris Terry and his wife, Isis, allegedly lived large off the $1.2 billion scam, even while they knew their “educators” had fake credentials and their top salespeople were posting fake wins and flashy jets to lure new victims, according to the complaint.
Also named in the lawsuit are some of the top earners, including Jason Brown and Alex Morton, who raked in tens of millions of dollars, as well as others, who profited from and promoted the alleged scheme despite warnings from the FTC and international regulators.
“Instead of disciplining or terminating high-earning salespeople when confronted with evidence of their deceptive earnings claims,” the FTC and Nevada AG alleged in the complaint, “Terry often rewarded them with lucrative payouts,” including how to “make those claims while escaping the detection of IML’s compliance program and law enforcement.”
Now, the complaint is pending before the U.S. District Court for the District of Nevada under federal question jurisdiction for multiple violations, including those of the Federal Trade Commission Act and the Nevada Deceptive Trade Practices Act.
The FTC also seeks permanent injunctive relief, consumer restitution and civil penalties.
“Defendants’ scheme has drawn the attention of numerous U.S. and foreign government agencies,” the FTC and Nevada AG noted in the complaint. “No fewer than 21 international government agencies have issued warnings about the scheme, and Canadian law enforcement has taken legal action against IML.”
Tim Newman, a partner at Haynes Boone in Dallas who is not involved in the matter, said, on the one hand, the filing reaffirms that federal regulators will continue to investigate and prosecute what they view as fraudulent or deceptive business practices, even if they relate to cryptocurrency markets or trading, where federal regulators have signaled a softer regulatory approach.
“On the other hand,” Newman added, “the filing highlights the more prominent enforcement role we expect state regulators to play in the coming years as priorities shift at the federal level and federal agencies are being downsized.”