Md. seeks to shut Web site of alleged pyramid scheme

Some recruits paid $450 to join ECB4U

January 26, 2001|By Del Quentin Wilber | Del Quentin Wilber,SUN STAFF

The Maryland attorney general issued a cease and desist order Wednesday to shut down an Internet site that advertises itself as a "shopping mall" but which officials say is an illegal pyramid scheme.

The order, filed with the Maryland securities commissioner, seeks to shut down Powercard International Inc. of Daphne, Ala., which does business under the name ECB4U.

Powercard International can contest the order before an administrative law judge within 15 days, officials said. Gerald P. Nehra, a Michigan lawyer representing the company, said Powercard's business "is legal under Maryland and U.S. laws."

The company advertises itself as a network marketing program run by independent representatives. Joining the company entitles a representative to a Web site that provides links to merchants.

The company said representatives made money by recruiting members and by generating traffic on their Web sites.

Though company representatives said recruits could earn money through their Web sites, state authorities allege that the representatives spent most of their time trying to recruit members. Those recruits usually paid about $450 to join, officials said.

In Maryland, it is illegal to operate a pyramid scheme, which relies on recruiting members for a fee.

In a complex formula, those who recruited members to ECB4U - and those who recruited the recruiters - received varying commissions, officials said. About 100 Marylanders became members.

To keep the business going, ECB4U representatives attended many "high-energy sales pitches, designed to build excitement and a sense of urgency," officials said. Some of the pitches were made in an office suite in the first block of Green Meadow Drive in Timonium, officials said.

In a statement, Attorney General J. Joseph Curran Jr. said he wants to keep ECB4U from "luring more Maryland participants."

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