Family First Life’s (former?) CFO, circa 2022, is alleged to have referred to the company’s compensation plan as a “Ponzi scheme”.

Integrity Marketing Group (IMG) own Family First Life, the insurance niche MLM company.

As alleged by IMG in a March 3rd, 2023 filed lawsuit, defendants Nicholas Ayala, Michael Killimett, Ryan Montalto and Matthew Smith

wrongfully induced Integrity to pay them millions of dollars in exchange for their businesses, material promises, and related services.

Defendants not only failed to live up their promises; it also appears that they never intended to do so.

Ayala, Killimett, Montalto and Smith are all cited as “former Integrity executive employee(s)”.

  • Nicholas Ayala owned Priority Life Insurance Agency LLC
  • Michael Killimett owned FFL Southeast
  • Ryan Montalto owned FFL United and
  • Matthew Smith owned FFL Northwest

IMG claims it bought the above entities from the Defendants in 2020.

Those insurance agencies – Priority Life, FFL Northwest, FFL Southeast and FLL United – then became wholly owned subsidiaries of Integrity.

As part of the acquisition, Ayala, Killimet, Montalto and Smith signed Employment Agreements with IMG.

Each Employment Agreement provided that each Defendant would “serve as President” of his respective Agency after Integrity acquired that Agency.

In a nutshell, IMG argues that, based on ongoing monthly financial reports, the Defendants failed to uphold their end of acquisition agreement.

At the time of Integrity’s acquisition of each Agency, each Agency was generating net income of between $600,000 and $1.2 million annually.

In 2023, each Agency reported negative annual net income.

Integrity provided each Defendant with monthly financial reports to asses the ongoing performance of his respective Agency.

Integrity identified severe and ongoing underperformance in connection with each Defendant’s management of his respective Agency.

On information and belief, each Defendant has failed to devote his best efforts, full business time, or attention, or all of them, to the business and affairs of his respective Agency.

In an attempt to address the collapse of the four Family First Life businesses, IML met with the Defendants in February 2023.

Integrity met with each Defendant to explain the steps the Defendant must take, consistent with his Employment Agreement, to improve his respective Agency’s business.

IMG followed up with “required immediate steps” demands and a “Partner Action Plan”.

At the time of filing its lawsuit, IMG claims

on information and belief, no Defendant progressed in taking the immediate steps required by the Partner Action Plan to improve his respective Agency’s business results.

IMG asserts that each of the Defendants instead were focused on “establish(ing) and operat(ing) his own independent marketing organization”. This would allegedly be a violation of the Defendant’s Employment Agreements.

By the end of February 2023 the Defendants appear to have had enough. On February 27th each of the Defendants “threatened to resign”.

IMG responded by terminating the Defendants later the same day.

IMG’s filed lawsuit asserts

  • breach of contract
  • tortious interference with existing contract
  • civil conspiracy
  • fraudulent inducement and
  • unjust enrichment

IML is seeking damages in excess of $5 million, and a declaratory judgment confirming each of the Defendants was properly terminated.

On June 5th, the Defendants filed an Amended Answer to the Complaint. The Answer is the usual denials but what’s interesting is the attached Counterclaims.

As opposed to them going off and building their own “independent” organizations, the Defendants claim the four entities failing is a result of “IMG’s conduct”,

IMG utilizes a highly deceptive, confusing, and convoluted compensation structure.

Although the Management Members continued to produce significant growth for IMG, IMG and (Shawn) Meaike began manipulating the Bonus Scheme by changing various incentives and moving credit for agents around to avoid having to pay significant bonuses to the Management Member’s agencies.

Meaike would also use the money that was supposed to be paid to the Management Members’ agencies for his own personal pleasure and gain.

Oddly enough, none of this is mentioned in IML’s original lawsuit.

I should point out that Shawn Meaike is the original founder and President of Family First Life. He sold the company to IMG in October 2019.

As part of the acquisition, Meaike was given an ownership stake in Integrity Marketing Group and other perks.

Meaike received a five percent kickback for each FLL “partner” acquired by IMG.

Because of this kickback, Meike used the Bonus Scheme to shift money to other FFL controlled agencies to inflate their revenue to make them more attractive for IMG to purchase.

Once acquired by IMG, Meike would then shift money out of these businesses to make them less profitable.

The Defendants claim, upon learning of “the fraudulent scheme of manipulating their financials”, they confronted IMG’s CFO and Director of Sales Operations.

This executive is not named in the Defendant’s Counterclaim. Family First Life’s website fails to list a CFO.

In any event, Defendants go on to claim;

After meeting with Ayala and looking into the issue in detail, the Sales Director called the bonus structure a “Ponzi scheme,” and she said they would figure out a solution.

However, nothing was done thereafter to rectify the problem.

Instead, Ayala was told to “hang in there” and to continue “doing what he was doing”.

As of November 2022, Matthew Smith claims his FFL Agent position earnings “were cut by more than 75%, even though production substantially increased”.

The IMG Sales Director also told Smith the bonus program was a “Ponzi scheme”, and she confirmed that their bonuses were being reduced so IMG and Meike could appear more profitable.

Here’s the previously referenced February 2023 showdown, this time as recounted by the Defendants;

On February 8, 2023, despite knowing each Management Members’ financials were simply incorrect, IMG sent a letter to each Management Member falsely accusing them of having lower “financial result … for the 2022 fiscal year, as compared to the financial results of [their agencies] when Integrity acquired the business …”

The Defendants go on to allege they were given instructions that “would make it nearly impossible to reach the goals of the action plan”.

At this time, it became clear that IMG was attempting to fabricate a for “Cause” termination so it would not have to pay FMV for the Management Members Rollover Units.

The Defendants maintain they didn’t threaten to resign but did in fact resign on February 27th.

Thereafter, IMG acknowledged receipt of the Management Member’s resignation letters, but claimed IMG was now terminating all of them – after the fact – “for cause”.

In the same termination letter, IMG’s real motivation was revealed, as IMG stated that it would be exercising its right to repurchase each Management Members Rollover Units, making sure to emphasize the for “Cause” language in their Employment Agreements.

“Rollover Units” are part of a financial arrangement reached when IMG bought the Defendants’ FFL businesses.

Each Management Member provided capital contributions in exchange for “Class A Common Units” and/or “Class A Preferred Units” (Rollover Units).

The Defendants argue that FFL was adamant it terminated them for “Cause”, in order to get out of paying out whatever the Rollover Units were worth at the time.

The Defendant’s Counterclaim alleges breach of contract and common law fraud.

Declaratory judgment pertaining to the Defendants resigning, and IMG not terminating them for “Cause” is also sought.

BehindMLM reviewed Family First Life in November 2021. I didn’t see a Ponzi scheme but I also wasn’t aware Meaike was allegedly manipulating Agent positions.

First and foremost, an executive manipulating an MLM compensation plan for their own benefit is a due-diligence red flag. It’s also probably evidence of fraud should the FTC ever file suit.

Taking a step back from both IMG’s original lawsuit and the counterclaim, it appears income in the four Defendant’s positions dried up.

This was likely a combination of Meaike’s alleged manipulation and that leading to a lack of effort. Why work harder when the guy running the company is just going to screw you out of more money?

Eventually the positions ran into the red, bringing us to the February 2023 showdown.

I’m also curious as to what specifically led Family First Life’s CFO to refer to the company as a Ponzi scheme. Either the term was misused interchangeably to describe a pyramid scheme, or there’s some investment shenanigans going on Family First Life I’m not aware of.

A CFO would by definition be in-charge of and fully aware of Family First Life’s financials. They’d of course also know about illegal manipulation of Agent’s income to benefit Meaike and anyone he was working with.

That Family First Life currently doesn’t appear to have a CFO, or at least publicly acknowledge having one, is ominous.

That said, personally I’m leaning to “Ponzi scheme” being used to refer to a “pyramid scheme”. In the absence of further clarification however, I can’t confirm.

Unfortunately IMG’s lawsuit and the Defendant’s Counterclaim have been filed in a state-level Texas District Court.

This means I can’t track them on Pacer and, as a result, BehindMLM won’t be able to track the case. Original filings covered in this article were provided courtesy of NAAIP.

Pending any updates we’re able to share, we’ll keep you posted.


Update 21st July 2023 – On July 20th IMG secured an order compelling arbitration.

Pending the outcome of arbitration proceedings between IMG and the Defendants, the case has been stayed.


Update 7th October 2023 – No update on arbitration proceedings but a non-jury trial has been tentatively scheduled for April 29th, 2024.


Update 30th May 2024 – Not sure what happened with this case. As per the docket a hearing on a contempt motion was held on September 21st, 2023.

The next docket entry is notation that the scheduled April 29th, 2024 trial has been cancelled because the case is closed.

I’m assuming this means arbitration resulted in a confidential settlement but there’s nothing on the case docket to reflect this.