The California lawsuit charging YTB with operating an illegal pyramid scheme brought to light that Illinois’ attorney general also has been investigating the firm for some time.
Natalie Bauer, a spokeswoman for the Illinois attorney general, declined to be specific about the nature of the Illinois investigation, but she told Travel Weekly that Illinois has “reached out to California to see how we might be able to work together.”
Meanwhile, as California pursued its case, it relied in part on information from the trade there.
Susan Tanzman, vice president of the California Coalition of Travel Organizations (CCTO), said the group was solicited by the attorney general’s office for information about the industry. She said CCTO sees YTB’s business model “as a detriment to the travel agents who are selling based on their knowledge.”
“We thought it represented a serious breach of California law,” Tanzman said.
The news broke just as thousands of YTB’s referring travel agents were gathering in St. Louis for a national convention “to learn new techniques to recruit more victims into the illegal pyramid scheme,” the California attorney general’s office said in a press statement.
Reached for comment, Kim Sorensen, CEO of YTB Travel Network, pointed Travel Weekly to the parent company’s filing at the Securities and Exchange Commission this week. In that document, YTB International said it believes it is in full compliance with California law and will “advocate its position aggressively” and “ultimately prevail.”
YTB said it has been in dialogue with California's attorney general for 18 months, and said efforts to make its case recently came to a standstill, and the ligitation “is a result of that standstill.”
Meanwhile, Sorensen said the YTB convention would bring 15,000 to 20,000 delegates to St. Louis.