Premier Financial Alliance “classic pyramid scheme” lawsuit filed
A recently filed RICO class-action lawsuit alleges Premier Financial Alliance is a “particularly egregious classic pyramid scheme”.
The June 25th class-action lawsuit was filed by Plaintiffs Rui Chen and Wenjian Gonzales in California.
Chen joined Premier Financial Alliance in 2017 and Gonzales in late 2017 or early 2018.
Both claim to have been deceived into believing PFA was a “legitimate way to make money”.
Defendants named in the lawsuit include Premier Financial Alliance, David Caroll (CEO and Founder), Jack Wu (“chairman and ringleader”) and his company AJW Productions, Rex Wu (field chairman), Lan Zhang (an “original member” of PFA), Bill Hong (conspirator).
PFA, Carroll, J. Wu, R. Wu, Hong, Zhang, AJW, by their authorization promote the pyramid scheme and make misleading claims of financial success.
To sell the financial-success promise, PFA, Carroll, J. Wu, R. Wu, Hong, Zhang, and AJW flaunt the wealth of the highest-ranked Associates and those few insiders at the top of the pyramid, as examples of the riches that await new participants, if only they will work hard enough (i.e., tirelessly recruit new Associates).
The wechat (a popular social networking platform), instagram, facebook, and twitter posts made during the class period boast of luxury vehicles, grandiose trips, expensive fine dining.
National Life Group Insurance Company, also a named defendant, is cited as the provider of PFA’s insurance products,
with complete knowledge that the Defendants have violated Department of Insurance Guidelines and the anti-pyramid laws, but aided and abetted the conduct of National’s co-defendants.
According to Chen and Gonzales, ‘100% of (Premier Financial Alliance’s) revenues (comes) from chain recruitment‘.
To earn any commissions or financial rewards in PFA, one has to recruit and cause to be signed up, six persons, and obtain a license to sell insurance under applicable State Law.
This, the lawsuit states, comes at the expense of selling insurance policies to retail customers.
The end result?
Premier Financial Alliance affiliates are promised
they will earn vast wealth, luxury vehicles, and lavish trips when in reality … more than 95% of PFA Associates average net losses.
No persons, except the promotors and operators of the Premier Financial Alliance scheme make any money.
A specific example cited in the lawsuit is a representation allegedly made by PFA, by which
with just one sale, based on the time value of money, $2,500,000 can be made by an Associate.
BehindMLM reviewed Premier Financial Alliance in 2016.
In our review we found an astonishing lack of information provided to potential PFA retail customers or indeed, whether retail sales were even possible at all.
This naturally raised the question of what Premier Financial Alliance’s core priority was.
Chen and Gonzales’ lawsuit attributes the lack of retail disclosure to PFA
tak(ing) money in return for the right to sell insurance policies, which are readily available on the market at a lesser price.
PFA themselves don’t sell the insurance policies, hence the lawsuit claim that Premier Financial Alliance has ‘never marketed or sold insurance policies to any retail customers‘.
The principal focus is on recruiting.
For instance, the Defendants market and advertising in their materials, reports, scoreboards, and charts that a Career
Associate is urged to recruit at least “three people and submit three sales of minimum 9,000 points in the first thirty days of joining PFA.”
No marketing is done to retail customers.
Having operated for some thirty years, as a result of PFA’s business model the lawsuit alleges
in many downlines, there is a sad litany of downline reports reflecting that persons have made their initial payment to Defendants, and premium payments on the applicable insurance
policies, only to discontinue payments upon realizing the business is impossible.
What is described in the lawsuit of PFA business model is that of your typical autoship recruitment scheme.
Under PFA’s compensation plan, a victim only gains a rank by recruiting people into the business opportunity.
The business opportunity is focused on recruiting people, and have them purchase 100 “points” in volumes.
The price of the product is so high compared to comparative market prices that it is impossible to legitimately sell these products retail, except to friends and families.
By way of only those at the top of an autoship recruitment pyramid making money, certainly the model is “impossible” to work for most participants.
Plaintiff’s Gonzales and Chen are seeking to represent a class of similarly situated Premier Financial Alliance victims, of whom they estimate there are over 25,000.
Premier Financial Alliance affiliates who qualify for the class-action include any who signed up from June 25th, 2014 and ‘paid more to the scheme than the amount of money they received from PFA‘.
Stated aims of the class-action include establishing
- whether Defendants are operating an endless chain;
- whether Defendants’ omitted to inform the Plaintiff and the plaintiff class that they were entering into an illegal scheme where an overwhelming number of participants lose money;
- whether PFA’s statements of income during the Class Period were deceptive and misleading;
- whether PFA’s conduct constitutes an unlawful, unfair and/or deceptive trade practice under California state law;
- whether PFA’s conduct constitutes unfair competition under California state law;
- whether PFA’s conduct constitutes false advertising under California state law and;
- whether the Defendants violated the Department of Insurance Guidelines in representing the benefits under a policy and/or underwriting.
Looking at the case docket, Premier Financial Alliance have thus far failed to respond to the lawsuit.
Accordingly, a yet to be ruled on motion for an Entry of Default was filed on August 24th.
We’ve added the lawsuit to our list of cases we’re following, so stay tuned for further updates as the case progresses.
Update 6th July 2019 – A second pyramid scheme case against Premier Financial Alliance was filed earlier this year.
We’ve covered the new class-action along with updates to the original 2018 case.
Update 18th April 2020 – As of April 2020, the two pending Premier Financial Alliance class-actions have been consolidated into a single case.
PFA is a scheme. When I first started, they pushed me to get recruits to sign up or I wasn’t able to succeed, their leadership sucked.
They do throw large numbers in your face to get everyone interested and hooked.
I had liked the fact that we supposedly were able to sell for multiple companies without being capped but it’s not that. It’s a brokerage firm but yet we were only able to sell for one company.
I liked helping people so I had left and am happy where I’m at today.
PFA is a scam. Don’t believe the lies they feed you especially about being able to buy whatever insurance you want for yourself.
They make money off every recruit who buys the Indexed Universal Life Insurance. They will tell you that you can sell whatever insurance type you want but not true at all.
If you don’t buy the IUL then they say you will not be able to sell IUL to the people you recruit and therefore they will not help you. I
f they’re really a legitimate company why would you only allow your agents to sell insurance from only one company, NLG and only sell one type of insurance, IUL??
DON’T waste your money and your time! If you’re looking for life insurance just buy it from the traditional insurance companies, you will save money!!
Where do i start. Long story short this is definitely a scam, any pyramid business is a scam.
There’s an initial fee that you have to pay to sell insurance, you have your own team and need to sign up more people to make money (SCAM)….. Obviously i was to smart enough to step away from it and have not lost any single amount of my money.
You can always walk from it, is really your choice to stick around to think you will make money out of it..
I joined PFA with my friend John Domingo years back. He is a known conman and is not to be trusted.
If you ever come across this guy dont believe a word he says. He only wants whats in your pockets
I am interested to join the lawsuit.
The PFA agent pushed me to buy IUL without disclosing the pros and cons. She just told me that IUL is an investment.
Then she recruited me and pushed me to recruit 3 people within 90 days, I have to pay the $125 for each 3 people I recruited because they do not want to pay the fees.
She promised that if I passed my license she will reimburse me a $700 for my license fees etc… when I ask her where is my $700 after I passed my license, she only give me $100. And pushed me complete my 9000 points.
So I sold the expensive IUL to my sister and her daughter so that it will complete my 9000 points.
My sister wants a term but she pushed her to buy an IUL for investments. When she delivers the policies including my policy, I ask her to explain how is the cash value works etc… she brushed off my questions and change the topic.
I was concern because when I read my policies there is a lot of things that she did not disclose like the surrender charge. She never told us that there is a surrender charge so we ended up canceling the policies after 6 months of paying.
My sister lost a lot of money because her monthly fees is $375 and her daughter is $200. We found a better IUL for a cheaper price and it’s legit.
So when I went to join the meeting with Rex Wu in his palace hotel in Las Vegas, I asked him that how come I did not get a single cents of commission on the 9000 points or the 3 policies I sold and his answer is it’s a part of my qualification to become an agent.
So I said, yes but that’s the only client I have and to make the matter worst after the 9000 points. I have to have 3 more clients on top of that to in order to be a CFT.
My husband was so mad and told me that it’s a scam, so I left the compt.
I do not believe it is a scam. I really think it depends upon leadership. After all I saw I see that the leadership had flaws.
The team I’m part of did fulfill tier promises. I revived the money that I was promised. The people that willingly joined are doing well. The ones who are not willing to join didn’t.
I believe many of you were deceived under the wrong leadership and that is quite unfortunate.
In conclusion PFA and its products are gold. The leadership is what is an example of a scam.
Read the lawsuit. It’s deffinitly a MLM scam. PFA’s their main focus is recruiting agents to buy the product and then for the agents to go out & recruit more people.
Walk away. Just buy insurance the traditional way through insurance company.
Funny how PFA calls themselves a broker, but their main objective is to pressure people into buying their product and then recruiting them.
The reason I took life insurance license in order to buy insurance for me and my family.
After I ask many agents from different companies, I sit down with them 3 hours to they can convince me buy their insurance. But all companies gave me a expensive QUOTE than national life group even a term life insurance. for example: farmer, State Farm, New York life.
yes they recruit people and sell insurance the same time if you can, but my leader doesn’t push me. It is a optional and your choice.
Even I pass 30 days and can’t reach the promotion: 3 people, 9000 point, they still give me a chance to do that.
I don’t push my family to buy insurance but they did convert to national life group because it is much cheaper than westlife insurance. And if you did learn a life insurance course, you must know always has a surrender charge if you withdraw money, but you don’t have to pay tax.
I recommend before you join any company, you should take license first and then shopping around to get a good price and pick the company you feel comfortable because not all leadership is good even company’s platform is perfect. Im lucky I have a good one.
Jack Wu, L. Zhang, Aggie Wu, etc. Here are some big words they use: entrepreneurs, American dream, work hard, and helping people. They should be ashamed of themselves.
It’s okay though, people who scam people will eventually get caught. Also, if I wanted some motivation in my life, I’ll hire a life couch.
People like Jack Wu this includes Lan Zhang, Aggie Wu, David Carroll, Hermie Bacus are fraudsters and should be ashamed of themselves. Hope they like prison. Eventually you will get caught.
PFA breed scammers and create the opportunity for them to live their dream.
Some over stepped their boundaries and become noticeable to society, but all live their life as a scammer hustling for living.
I am confused! Does people really want “TERM” why?
& if some people said that they purchase cheaper IUL why is that name of the company not mentioned? Kindly mentioned it, would help a lot of consumers!
And recruiting is the system, so be it- you have options not to do it that way anyways! They gave you choices.
Should there be a cheaper IUL, whom is it connected to? Just saying! There’s no perfect system! But we have options to choose wisely!
To be honest, my friend makes a lot of money, than me- why coz she work harder than me!
I’m not offended, I just need to work harder.. #goal to everyone to be protected & take away burden to your love ones that you will leave behind, & if you didn’t die- you’re not taking your love ones savings that belongs to their future, future kids!
Uh nope. An MLM company who primarily generates revenue associated with recruitment is a pyramid scheme.
Whether said recruitment is optional or not is neither here nor there.
Article updated with note of new class-action lawsuit and updates on the original 2018 case.
PFA use their product to create opportunities and dreams so their agent can sell it to Everyone and Anyone who is willing to give up their paycheck and saving account for those opportunities and dreams.
Recruit is a way to sell the product to Everyone. Young and old. Rich and poor. Another way is to make people believe what you believe in.
David message on slide in Orlando: recruit until you die.
Message on training slide: What is pfa number 1 goal? recruiting is our lifeblood!
Actually it’s a way to sell products only to affiliates.
And if your MLM company primarily generates sales revenue through sales to affiliates, you’re in a pyramid scheme.
Thank you for this.
My 63 year old mother was approached by one of my friends from school who called himself a ‘certified field director’ at Premier Financial Alliance.
He basically gave her the whole spiel about shoring up her retirement, becoming more active in the community, and a chance to be more than ‘a life long housewife’.
He even tried to guilt her into signing all sorts of stuff on the spot by telling my mom about a story where his own mother was hospitalized and thanks to this insurance, his family didn’t need to pay a cent- and that mom could avoid being a burden by signing up now.
She mentioned she’d check with me first so here I am.
I find it ridiculous that I can’t even view their suite of products on their website. Nothing- nada. What sort of insurance salespeople go out of their way to bury the information on what they sell?
I also noticed that in Facebook posts; almost 99% of people are of SE Asian origin and/or working in a low-skilled and low-paying service sector job.
It’s as if they don’t even bother selling to other racial groups who might be able to see through the bullshit peddled by a bunch of predatory sales people chasing immigrant communities.
I honestly don’t know how my ex-friend sleeps at night. I gave him a call and told him I never wanted to hear him approach any of my family ever again.
I asked him to show me their annual reports or explain how Premier Financial Alliance actually makes money, since I suspect it has very little to do with actual insurance and more to do with signing up your cousins and whatnot. He said he’d get back to me and it has been a week with nothing, so thankfully it looks like I’ll never hear from him again.
To You all who think PFA is a scam. In your so called “traditional jobs,” (Ozedit: snip, see below)
No idea what “traditional jobs” have to do with PFA’s pyramid scheme lawsuit.
The 1990s called, they want their deflection back.
To you all who think pfa is not a scam. Do not worry. The truth will set you free.
The first time I attended a PFA seminar, I immediately noticed that the audience was overwhelming Asian.
Initially I was puzzled by this at first, then my skepticism got the better of me and I began to get a gut feeling (which Is usually accurate) that something was out of whack here.
Lots of talk of unlimited growth potential… the usual pie in the sky blather you here at these events.
Lots of desperate but decent people in the audience unaware of the hosing they were gonna take.
Being of Asian descent, most of them will quietly bear their losses without losing face in the community.
I previously switched my life insurance policy from NY life insurance (The oldest life insurance company) to National Life Group (The 2nd oldest life insurance company).
For $24 more i now have $100,000 more in life insurance coverage. Plus living benefits.
I am extremely happy with National Life group and the products they offer. I would suggest that people do their own research and come to your own conclusions.
As for me, i am happy with the product. the salesperson who works for PFA never pushed me to join and i can sleep at night knowing that if anything were to happen to me i am covered.
I have had no bad experiences with National Life Group and PFA affiliates.
^^ Well that doesn’t sound like a forced astroturf testimonial at all.
I know when I purchase insurance the first thing I do after is go find an MLM opportunity review and tell everyone how great my salesperson experience was.
PFA is at it again and still making business. They said they’re a broker and a strong company.
They are really good on convincing people. Im really skeptic, im worry for my girlfriend on believing in this.