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.