The Federal Trade Commission charged BurnLounge, a company that sold opportunities to operate online digital music stores via the Internet, telephone calls and through in-person meetings with providing most of its benefits to participants who recruited other members, as opposed to actually selling music downloads.
Such structures are illegal under the FTC Act.
In addition to BurnLounge, the complaint named Juan Alexander Arnold, John Taylor, Rob Deboer; and Scott Elliot as defendants. The papers were filed in the United States District Court Central District of California, Western Division.
The FTC also alleged that despite claims made by some of the defendants during live recruitment presentations (
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