MLM Press Room

FTC vs. BigSmart: $5 Million Settlement

March 27, 2001

Bigsmart Pyramid Promoters Settle FTC Charges

$5 Million for Consumer Redress

Operators of an Internet-based business opportunity that promised easy income for investors in an Internet shopping mall network have agreed to settle Federal Trade Commission charges that their scheme was an illegal pyramid operation. Under the terms of the settlement, Bigsmart.Com L.L.C. and principals Mark and Harry Tahiliani will provide up to $5 million in consumer redress and post a $500,000 performance bond before engaging in any new multi-level marketing activity. The defendants also are prohibited from engaging in any illegal pyramid schemes.

Bigsmart is based in Mesa, Arizona.

According to the FTC complaint detailing the charges, Bigsmart marketed Internet theme "malls" that it claimed would enable investors to earn substantial income from commissions on products purchased through the Internet. The malls were a collection of links to retail sites maintained by independent third-party merchants, such as, and to a "Superstore" maintained by Bigsmart, itself. Traffic was directed to the malls through the personalized Bigsmart "welcome pages" that members bought access to for a $10 application fee and a $99.95 "hosting" fee. Although Bigsmart claimed that members would make substantial amounts of money, the scheme was structured in such way that to realize continued financial gains, would depend on ". . . the continued, successive recruitment of other participants," not on retail sales of products and services to the public. The FTC charged that the claims that consumers who invested in Bigsmart would make substantial income were false; that promotional materials that made the false and misleading claims provided the means and instrumentalities for others to deceive consumers; and that Bigsmart was actually a pyramid scheme. All three were violations of the FTC Act.

To settle the FTC charges, Bigsmart and the Tahilianis will provide up to $5 million in consumer redress. They also will be required to post a $500,000 performance bond before engaging in any new multi-level marketing activity.

Consumers who believe they may qualify to receive consumer redress should call 202-326-3294.

This case was brought with the invaluable assistance of the Offices of the Attorney General of Texas and the Wisconsin. Department of Agriculture, Trade, & Consumer Protection, Division of Trade & Consumer Protection. It was filed in U.S. District Court for the District of Arizona, March 12, 2001.


A Stipulated Final Judgment and Order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent judgments have the force of law when signed by the judge.

Copies of the Stipulated Final Judgment and Order are available from the FTC's web site at and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357). The FTC enters Internet, telemarketing and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.


Claudia Bourne Farrell
Office of Public Affairs


James A. Kohm
Bureau of Consumer Protection

(FTC File No. 002 3365)

(Civil Action No. CIV01 0466 PHX ROS)

Related Article:
FTC v  Bigsmart: A Slap & A Leash

Download complete text in PDF format:
Complaint (664Kb)
Permanent Injuction (3.1Mb)

Other Pages of Interest

FREE MLM News Global Newsletter

This e-newsletter contains top MLM headlines across the direct selling industry, as well as the most recent MLM scam alerts, timely articles, video of the week, and so much more.

read more »

Link Directory to Direct Selling Companies

A straight-forward list of the current direct selling, MLM, network marketing, and party plan companies.

read more »

MLM News Headlines

MLM, network marketing, direct selling, party plan news stories dating from 1998-today. Read the top MLM news stories here.

read more »

Key Pages to Visit While You're Here

  1. The MLM Startup Conference

    Register Today for the MLM Startup Conference

    For Startup and Existing MLM Companies

    Register Today!
  2. Free MLM Startup Manual

    Free MLM Startup Manual

    Starting and Running the Successful MLM Company manual

    Get Your Copy Today!
  3. MLMLegal

    The Best MLM Resource on the Web

    Jeff Babener - MLM Expert Attorney & Business Advisor

Follow Babener & Associates on our social networks. Stay current on legal news, cases, videos, and articles. Contact us today!

About 31 minutes ago