Wealth Masters lose appeal, still banned in Norway
Back in March of 2011, the Norwegian Gaming Board upheld its original declaration that, after investigating the business model and products of Wealth Masters International, the company was nothing more than a pyramid scheme.
In response to the Gaming Boards decision, Wealth Masters launched an appeal accusing the Gaming Board of ‘colluding with a Norwegian blogger in order to ‘smear, libel and discredit WMI’.
Upon receiving the appeal, the Gaming Board ‘found no reason to reverse its decision‘ and in July 2011 forwarded Wealth Master’s appeal and WMI’s complaints to the Lottery Board for consideration.
In September Wealth Masters, being represented by Prashant Rørvik after firing their previous lawyers Helleroy and Co., submitted additional information to the Lottery Board they hoped would further clarify their complaints against the Gaming Board’s decision.
Through their lawyers, Wealth Masters argued that
- WMI do not pay compensation for recruiting
- WMI’s products are not overpriced because ‘there are considerable costs to hold courses’
- there is no annual fee to participate in WMI but rather ‘each participant is free to participate regardless of payment in the form of annual fees‘
- Section 16 of Norway’s ‘Lottery Act’ (which the Gaming Board used to asses whether WMI is a pyramid scheme or not) ‘may not apply to WMI’s business‘
In its decision, the Lottery Board acknowledged
it may, by the so-called pyramid schemes be difficult to determine whether the goal of the organization and participants is to develop a healthy business with sales and / or services, or if the goal is to make a future profit by paying money into the bottom of the pyramid
but reasoned that
that the Gaming Authority in its notice of decision and in the decision, has made a thorough assessment of WMI.
Pyramid-like sales structure WMIs turnover is built over levels.
The company’s consultants depending on the type of consultant status they have, receive financial benefits for up to five levels.
Lottery Board joins in the supervisor’s assessment and are similar to the Authority concluded that WMI clearly has a pyramid-like sales structure.
Participant Payment is a condition that WMI can be affected by the Lottery Act, 16 This means that WMIs participants must make a payment to the participant status.
When the consideration for purchase of starter kits, brochures, introduction material, education courses and the like do not correspond with the actual values of such material, it is considered to be an indirect acquisition of the status of participants within the system.
There is also an indirect payment for participation when the products that are traded in the system.
The Tribunal finds that WMIs products actually have a considerably lower value a price they are sold for.
Lottery Board is thus similar to the audit that regardless of whether the yearly fee is voluntary, indirectly provided compensation through the sale of goods that are overpriced.
It is stated that one can be a vendor / consultant without even having bought WMIs products, but the participant must, among else pay an annual fee of 99 that must be considered ‘payment to participate’ for this group of participants.
It seems clear to the Tribunal that WMIs members / consultants are lured into the system in that it made in view of financial gain in the form of bonus / commission.
It is the board’s clear opinion that the revenues of the system will come from the new participant’s payment for participation.
It is in the assessment not relevant to the quotes from the complaint that the revenue goes to the parent WMI centrally and that the consultants are paid from a central WMI as long as the income of the consultants generated from sales / recruiting of new participants.
It is the Gaming Board wrdering that WMI provides that its participants have the opportunity for large (unrealistic) earnings.
It is on the Board assessment that the products offered by WMI are not ordinary consumer products and find out from the documents is unlikely that the products purchased several times.
Revenues in the company is thus dependent on new participants to generate revenue for the company.
Authority has his view demonstrated that a large portion of the proceeds from the products are allocated to the commission and bonus. The products are also considered to be overpriced.
Lottery Board on the basis of this along with the Authority, concluded that the company’s revenues in the reality of large partly due to recruitment of new participants and not the sale of products or services.
Lottery Board parts thus Authority’s assessment that more than 50% of its revenues (are) derived (from the) recruiting of new participants to the company.
Ultimately, the Lottery Board concluded that
the complainant has the e-mail on 19 September asked for suspensive effect, which the Tribunal can not find a basis for.
Lottery Board. shows the connection to the administrative handling of the matter is now finally settled and the Tribunal is not in doubt about the result.
The language is a bit mangled with having to rely on Google Translate to convert the Norwegian language Lottery Board notification into the English, but the overall message is loud and clear.
The Lottery Board agrees with the Gaming Boards assessment and has dismissed Wealth Masters’ complaints lodged in their appeal.
As far as the Gaming and Lottery Boards are concerned, the issue of whether or not Wealth Masters International is a pyramid scheme or not ‘is now finally settled‘.
The promotion of Wealth Masters and sales of their products in Norway remains illegal.
You can view the original Lottery Board conclusion at their website (linked at the bottom of the press release), or a Google Translated copy into English here.