The State of California has sued YourTravelBiz.com (YTB), charging that the company operates an illegal pyramid scheme and engages in deceptive business practices.
“YourTravelBiz.com operates a gigantic pyramid scheme that is immensely profitable to a few individuals on top and a complete rip-off for most everyone else,” said California Attorney General Jerry Brown. “Today’s lawsuit seeks to shut down the company’s unlawful operation before more people are exploited by the scam.”
The lawsuit, which was filed in Los Angeles Superior Court on Monday, also names YTB executives Lloyd Tomer, Scott Tomer, Kim Sorensen and Andrew Cauthen.
Brown charges the company, affiliates and executives with operating an “endless chain scheme.”
“YourTravelBiz.com and its affiliates operate an illegal pyramid scheme that only benefits members if and when they find enough new members to join the scam,” said the attorney general’s office. “Once enrolled, members who join the pyramid scheme earn compensation for each new person they enlist, regardless of whether they sell any travel. The company lures new members by offering huge income opportunities through online travel agencies yet the typical person actually makes nothing selling travel.”
Brown charges that YTB’s unlawful business practices include deceptive claims that members can earn millions of dollars with the company; operating without filing legally mandated documents with the attorney general and the Department of Corporations; and selling an illegal travel discount program.
Under California’s unfair business practices statute, the company is liable for $2,500 per violation of law. Brown is suing YourTravelBiz.com to get a court order that bars the company from making false or misleading statements and assesses a civil penalty of at least $15 million and at least $10 million in restitution for Californians who were “ripped off” by the company.