Two named plaintiffs claim in a proposed class action that Premier Financial Alliance, Inc. (PFA); National Life Group Insurance Co.; AJWProduction, LLC; and five individual defendants are the ringleaders of a “classic pyramid scheme.” The 29-page complaint alleges the scam is particularly egregious in that the defendants make no money from the sale of actual insurance policies. Instead, the case claims, the defendants derive 100 percent of their revenue from chain recruitment of “associates,” which the plaintiffs say “tens of thousands” of consumers have been duped into becoming.
According to the lawsuit, more than 95 percent of PFA associates average net losses, rather than profit. The individual defendants are the only ones who make any money through the scheme, the case says, while continually promising associates that they, too, can access “vast wealth, luxury vehicles, and lavish trips.” The reality is only middlemen and those at the top of the pyramid see any money from the grift, the plaintiffs say.
“[The defendants] take money in return for the right to sell insurance policies, which are readily available on the market at a lesser price, and reward for recruiting other participants into the pyramid,” the complaint states.
While pegging each individual defendant as “at or near the top” of the alleged scheme, the lawsuit breaks down the corporate defendants’ apparent roles as follows:
Premier Financial Alliance is, according to the case, a “suspended” private organization that maintains offices throughout California and Georgia;
AJW Productions is the alleged alter ego and money collection entity of the individual defendant described in the complaint as the “chairman” of the pyramid scheme; and
National Life Group Insurance Company is a Texas company responsible for “pandering” the defendants’ insurance products to those who participate in the scheme.
To become an associate, an individual allegedly has to buy into the scheme for a non-refundable $125. He or she must then buy a supposed life insurance policy for the opportunity to recruit potential associates, according to the suit. To earn any money whatsoever, an associate must recruit and have signed up six other individuals, the case continues, as well as obtain a license to sell insurance under state law.