Internet Pyramid Scheme Busted Bellingham-Based Company Promised Indefinite Payments

The Federal Trade Commission says it has shut down an Internet pyramid scheme that took in millions by promising tremendous returns with a “mystical mathematical formula” from a 13th century monk.

Fortuna Alliance L.L.C., based in Bellingham, promised returns of more than $5,250 a month indefinitely to customers who joined by investing between $250 and $1,750, FTC officials said Wednesday.

Fortuna told prospective investors the hefty returns were made possible by a concept based on a formula developed by 13th-century Italian math pioneer Leonardo Fibonacci, said Charles Harwood, regional director for the FTC in Seattle.

Fortuna lured investors through its home page on the World Wide Web, the multimedia potion of the global computer network, the officials said.

Fortuna took more than $6 million from as many as 30,000 people since it began operating in October or November, transferring at least $3.55 million to a bank in Antigua in the West Indies, the FTC said in court papers.

The agency estimated 95 percent of those who participated would lose money.

“Behind all the techno-jargon and the mathematical mumbo jumbo, this is just an elaborate, electronic version of a chain letter,” said Jodie Bernstein, director of the FTC’s bureau of consumer protection.

“There were representations about charitable activities, and various intentions to sell things” such as skin-care products, books and tapes, Harwood said.

The company and its officers provided advice and promotional materials for members to set up their own Web site and recruit others, the FTC said.

he FTC filed a complaint in federal court alleging unfair and deceptive trade practices under the Federal Trade Commission Act.

The agency won a federal court order Wednesday temporarily halting the business, freezing its assets and appointing a receiver to manage the company.

Named in the FTC complaint were Fortuna’s five officers: Augustine Delgado, Libby Gustine Welch, Donald R. Grant, Monique Dlgado and Gail Oliver. All are Washington state residents. They could not be reached for comment.

None were arrested, Harwood said.

The FTC has asked the court to issue a permanent injunction that would provide remedies for consumers hurt by the alleged scam.

“We moved pretty quickly here, and I’m optimistic we will get some (money) back,” Harwood said.

Hardwood’s office was tipped off to the alleged scam by Bellingham police, who were getting complaints from callers around the world.