By FITSNews || A “multi-level marketing” company (a.k.a. pyramid scheme) with ties to former S.C. Secretary of State Jim Miles has been shut down by the State of Montana, according to documents obtained by FITS. In fact, according to a copy of the Montana cease and desist order, Miles basically admits that the company in question – Fortune Hi-Tech Marketing (FHTM) – is a pyramid scam.
“(FHTM) is a pyramid, there’s no doubt about that,” Miles says in the order, although he goes on to claim that such scams are only illegal “if no products or services are being sold.”
Montana obviously disagreed with Miles’ assessment, becoming the second state in recent months to shut the business down. Three months ago, North Dakota issued a similar cease and desist order against FHTM.
Miles involvement with this scheme – and other pyramid scams like it – was first reported by FITS last April, when he was still serving as Chief-of-Staff to S.C. Lt. Gov. Andre Bauer.
A month after our story broke, Miles was forced to resign from Bauer’s office – not for the pyramid schemes, but for his role in”Senior Scam,” a questionable business venture that funneled tens of thousands of tax dollars into a for-profit shakedown.
Incidentally, the University of South Carolina’s Athletic Department became embroiled in its own pyramid scam scandal two years ago – one involving a top Gamecock marketing official (and football announcer) – but the school chose to sweep the scandal under the rug.
WEB EXTRA
FHTM Cease and Desist Order
By D.P. Lawrence March 17, 2010 at 2:52 am
GASB (Governmental Accounting Standards Board) rules define a “government” or “governmental entity” as, inter alia, one that is controlled by a single governmental official who (a) has budgetary control over its operations (b) appoints its staff and (c) can terminate it at will. All three requirements were met by Bauer’s “Senior Shield” operation.
What Jim Miles, an attorney but not a governmental accountant, did not understand, is that as an entity subject to GASB auditing rules, all sources and uses of funds must be disclosed, and Senior Shield must act as other governmental entities in procurement, hiring, et cetera, in accordance with the State Procurement Code.
Ned Sloan can quote this chapter and verse.
Once Bauer and Miles discovered that all expenses would have to be treated pursuant to GASB rules, following the State Procurement Code, they realized that they could not really operate it like a “private non-profit” (think of your local hunting club).
Miles never even filed the articles of incorporation with the Secretary of State, got cold feet, and bailed out of the airplane. Reportedly he and Bauer had spent some $85,000 on a web site that a friend of mine said he could have built for around 5 percent of that amount. Who got paid that $85,000? I understand it was a Greenville-based “political consulting firm.”
Jim needs to return to college and take a solid course on Govermental and Not-for-Profit Accounting. A widely-used text is described at http://highered.mcgraw-hill.com/sites/0073379603/student_view0/index.html.
Miles and Bauer also need to return to college and take courses on ethics.
By Ynotfirst March 17, 2010 at 5:24 am
is Andre involved too? just askin
By Sam March 17, 2010 at 7:26 am
Corruption in our state runs hand in hand with bible study. If you are well placed in government, you are involved, or exposed, to corruption on a regular basis.
Senior Shield was a senior scam from word go. Lt Gov Andre, State Chairman of the GOP Karen Floyd, and others benefited from tax dollars spent on Senior Shield. The real fraud of Senior Shied was committed as Jim Miles was leaving. People would be shocked if they new what happened to the “rest of the money”. maybe it comes out before the election, maybe not. We shall see.
By Ed March 17, 2010 at 8:28 am
It is a shame our ethics commission operates like a frightened neutered poodle and does nothing when these type of con artist bozos try to use their elected office to set up scams to pay off their buddies 85K for a ridiculously overpriced website.
By beentook2 March 17, 2010 at 9:54 am
Andre involved in anything immoral, illegal, irresponsible, interesting,
intellectual, inspiring, intriguing.
Impossible!
By Tom March 17, 2010 at 11:17 am
Miles wife was heavily involved in the 1990s with Excel, a MLM, long distance company. I was talked into hearing her sales pitch which included her saying passionately that the key to the old USSR establishing a good economy was Excel! To this I did not know if I should laugh or walk out. needless to say I did not sign up with them.
By Darth March 17, 2010 at 1:01 pm
Let me see, Amway, Fuller Brush, Avon, Pampered Chef and Herbalife all seem to pass the “gold standard” for pyramid/non pyramid.
Lets get out our tin foil hats, Air Farce One (or Fuerza d Aero Uno, for new enfranchised La Raza voters) was sighted over Greensboro this AM.
Pingback: Sc to montana | LookRecord