Since almost 90 percent of investors in any pyramid program actually lose money, the defendants' earnings claims were false, and violated federal law, the FTC alleged. In addition to the pyramid based on Internet access devices, the defendants, prior to the initiation of the FTC action, also had started a similar program based upon sales of deregulated electric power, even though no state had deregulated the sale of electric power at the time defendants began to offer this program. The settlement also contains record-keeping provisions to allow the FTC to monitor compliance. The Commission vote to approve the stipulated final judgment and order was 4-0. This proposed stipulated final judgment and order is for settlement purposes only and does not constitute an admission by the defendant of a law violation.
Consent judgments have the force of law when signed by the judge.