The Online Resource for Network Marketing and Direct Sales Professionals Consent Decree

  DOCKET NO.CV-00- 82




Defendants )  

Plaintiff State of Maine having filed a Complaint against Defendants, LLC and Richard V. Slaback and the parties having consented to the entry of this Consent Decree and Order, for purposes of settlement only, without this Decree constituting evidence against or admission by any party as to any issue of fact or law other than as to jurisdiction and without trial of any issue of fact or law, NOW THEREFORE, upon consent of the parties hereto, IT IS HEREBY ORDERED, ADJUDGED AND DECREED AS FOLLOWS:


1.This Court has jurisdiction over the Plaintiff and Defendants, LLC and Richard V. Slaback and the subject matter of this action. The Complaint states a claim for relief under 17 M.R.S.A. § 2305 (Multilevel distributorship, pyramid club), 5 M.R.S.A. § 207 (Unfair Trade Practices Act), 13-A M.R.S.A. §§ 1201-1207 (Maine Business Corporation Act) and 32 M.R.S.A. §§ 4681-4690 (Transient Sales Act).


2.1.Whenever used in this Consent Decree and Order, the terms "multilevel distributorship" and "pyramid club" shall have the meanings ascribed to them by 17 M.R.S.A. § 2305.

2.2.Whenever used in this Consent Decree and Order the phrase "retail sales of goods and services" shall exclude the sale of internet malls.


3.Defendant, LLC, and all its agents, subsidiaries, assigns or any persons acting for or under its control are permanently enjoined from engaging in any of the following acts or practices:

a.organizing or operating within the State of Maine or marketing to Maine residents any lottery as defined in 17 M.R.S.A. § 2305.

b.collecting fees, dues or anything of value from any Maine resident for membership in any multi-level program, or for the purchase or sale of, or the right to operate a so-called "internet mall," unless any subsequent payments or commissions to be received by the Maine resident are based exclusively on retail sales of goods or services.

c.paying commissions or making payments of any kind to any person for the recruitment into any multi- level program of any Maine resident.

d.falsely claiming or misrepresenting, by means of any medium accessible to Maine residents, that any retailer has entered into a contract to provide discounts or commissions to or through, or exaggerating the level of such discounts or commissions.

e.representing that this Consent Decree implies or suggests that the State of Maine has in any way approved or endorsed's multi -level program, or other business practices of in any way.

f.conducting any business whatever in the State of Maine or with or involving Maine residents in any way unless and until shall have applied to the Secretary of State for authority to do business in the State of Maine pursuant to 13-A M.R.S.A. §§ 1201 - 1217, and obtained such authority; and unless and until shall have registered with the Department of Professional and Financial Regulation and complied in all respects with the Transient Sales Act, 32 M.R.S.A. §§ 4681 through 4690. Nothing is this subparagraph precludes from applying for a waiver pursuant to 32 M.R.S.A. § 4685-A. will notify all Maine residents who participate in its multi-level program that they may have to register under the Transient Sales Act. This subparagraph is effective fourteen business days from the entry of this consent decree and order. LLC shall provide the State of Maine with a full accounting, detailing all payments received from, or made to Maine residents since the inception of's multi-level program. This accounting shall be provided to the Department of the Attorney General within two weeks of the effective date of this Consent Decree.

5.Within one month of the effective date of this Consent Decree, shall agree to repurchase the internet malls of all Maine residents who purchased internet malls from For every Maine resident identified in the accounting provided pursuant to the preceding paragraph shall repurchase malls by paying an amount equal to the total of all payments made to by such Maine resident, less the amount of any payments made by to such Maine resident. Within six weeks of the effective date of this Consent Decree, shall provide a sworn and notarized statement to the Department of the Attorney General, providing a list of all refunds issued pursuant to this paragraph, showing in each case the amount of the refund and how it was made (by check or credit card refund), together with a copy of each check or credit card refund slip and the name and address of the recipient in each case. Notwithstanding the foregoing, if any Maine resident expresses an intent to retain any internet mall previously purchased from, the refund may include a deduction of $99.95 for each such mall. shall provide notice to each Maine resident who owns a mall at the time of the effective date of this Consent Decree and Order regarding this refund offer in the form set forth in Exhibit A to this Consent Decree and Order.


6.The Defendants and Richard V. Slaback are ordered to pay the State of Maine Department of Attorney General, pursuant to 5 M.R.S.A. § 209, civil penalties in the amount of $40,000.


7.The Defendants shall pay to the Attorney General, pursuant to 5 M.R.S.A. § 209, its costs of bringing this lawsuit including attorneys fees of $5,375.


8.Jurisdiction is retained by this Court for the purpose of enabling any of the parties to this Consent Decree and Order to apply to the Court at any time for further order and directions as may be necessary or appropriate for the construction, enforcement or execution of this Consent Decree and Order. Each and every violation of this Consent Decree and Order shall be treated as a separate contempt thereof.


9.This Order shall be effective immediately upon entry.

Attorney General

Dated: ________________ ___________________________________
LINDA CONTI J. - Maine Bar No. 3638
Assistant Attorney General
6 State House Station
Augusta, Maine 04333-0006

Attorneys for the State of Maine
Dated: ________________ ___________________________________
3741Verrill & Dana, LLP
One Portland Square
P.O. Box 586
Portland, Maine 04112-0586
Tel. (207) 774-4000

Attorney for Defendants,
Richard V. Slaback and, LLC

The undersigned acknowledges that he is principal in, LLC and by his signature hereon acknowledges that he is bound by the provisions provided in Part III herein.

Dated: ________________ ___________________________________
President and CEO of, LLC
Dated: ________________ ___________________________________

Exhibit A

Each Maine resident that owns a mall at the time of the effective date of this Order shall received a notice containing the following statement:

The State of Maine and have entered into a Consent Decree and Order resolving their disputes. That Consent Decree is available at ________________. will no longer pay commissions for mall sales or hosting services. Commissions will be paid solely on retail sales of products sold through's main mall. Any Maine resident that purchased any Bigsmart web mall is entitled to a refund of the purchase price paid for any such mall, less any monies paid by to that Maine resident. Any Maine resident expressing an intent to retain any internet mall previously purchased may so indicate, in which case the refund issued will include a deduction of an annual hosting/ maintenance fee of $99.95 for any such mall.