I-Team Investigation: Income statements released by Ky. company show employees typically earn little

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by Adam Walser

WHAS11.com

Posted on July 14, 2010 at 5:52 PM

Updated Thursday, Jul 15 at 2:34 PM

LEXINGTON, Ky. (WHAS11) -- A Kentucky-based company has been the target of legal actions by two different states.  When we first told you about Fortune Hi Tech Marketing in May, the company had just agreed to a settlement with Montana which required it to pay a fine of nearly a million dollars and post its average income statements.

Fortune reps recruit in restaurants, churches and auditoriums nationwide. They bring in thousands of new members every year, partly by preaching the gospel of prosperity.  "You're gonna get paid $100,000 a year for doing exactly what you do today,” said one representative in his You Tube recruiting video.  “There are quite a few people that stand up in front of the room and talk about how much they're making. One of them posted online he is making $400,000 a month,” said a former representative from Texas.


The Lexington-based company's own top reps have said that Fortune has 200,000 representatives with annual sales of $500 million.  Fortune claims success from representing products from well known companies.  “Everybody comes into our business the exact same way, has the exact same opportunities,” said FHTM CEO Tom Mills.

However, some former members say it's not sales but recruitment that matters, and only the top recruiters earn big bucks.  “Maybe you've got 200 people in Fortune that are from the Executive level up nationally that are making any sizable amount of money, and the rest are all going broke,” said former FHTM representative Joe Isaacs.


Montana investigators say most of the state's 3,000 Fortune reps paid hundreds of dollars to join, but made little or no money.  The state called fortune a "pyramid promotional scheme" and ordered the company to make annual income statements available.  Fortune agreed to post them in order to continue operating in Montana.

It wasn't easy for us to find the financial disclosure statement, but we finally did after navigating the website for a while. We went under “opportunity”, then clicked on “rewards,” then we had to scroll down past the photographs of Fortune members swimming with the dolphins and a family picking up the new Lexis in order to find a tiny link at the bottom of the page.  The information inside speaks volumes about Fortune's compensation.

In the fine print, it says 71 percent of reps are actually paid. 28 percent earn zero.  As for how the rest would look on a graph, “It would certainly have a pyramid shape to it,” said Charlie Mattingly, CEO of the Louisville Better Business Bureau.  Nearly 95 percent of reps earn less than $3,000 a year.  Another four percent earn between $3,000 and-$30,000. That means less than half of one percent of Fortune reps average more than that.

“What these numbers show is that relatively few people are making substantial amounts of money. 95 percent of the participants are making very little money,” said Mattingly.


Fortune's marketing manager Laura McDonald said in a statement "Our goal with this document is to make sure that prospective FHTM Independent Representatives realize that they will need to work hard to earn an income and success is not guaranteed."

You can click here to see FHTM annual income statements.

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