16 August 2009

State senator linked to firm sued by FTC

Houston Chronicle
As many as 300 people became participants in a pyramid scheme in 2006 and 2007 at the behest of San Antonio state Sen. Jeff Wentworth, who said he believed the company involved was a legal marketing firm.

Wentworth, R-San Antonio, on Thursday said his income tax returns for 2006 show he made less than $1,000 while working as an “independent contractor” for an Internet digital music sales company called BurnLounge.

The Federal Trade Commission shut BurnLounge down in 2007 with a federal lawsuit accusing the company, its chief executive and its top three money-producing promoters of running a pyramid scheme. No criminal charges were brought in the case.

“BurnLounge is operating a pyramid scheme. Such schemes have an intolerable capacity to mislead,” the FTC said in its lawsuit.

“That's news to me,” Wentworth said Thursday.

BurnLounge began in 2005 as a digital music store that allowed people to buy in as retailers for as little as $29.95. The company claimed as many as 50,000 retailers and included associations with celebrities such as singer Justin Timberlake.

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