LEXINGTON, KY (WAVE) - A big donor for the University of Kentucky athletics is in trouble with the federal government after being accused of making his money by running a pyramid scheme.
The Lexington offices of Fortune Hi-Tech Marketing, where Paul Orberson is president, were raided Monday by the Federal Trade Commission and the office of Kentucky's Attorney General.
In a video posted just three weeks ago on FHTM's Official YouTube page Orberson tells his members, "Happy New Year FHTM family. It's hard to believe but here we are in 2013, January 1st a whole new year ahead of us. What an exciting time to be involved in our company."
Kentucky's Attorney Generals Jack Conway hopes that excitement is coming to an end for Paul Orberson and FHTM. Conway's office and the FTC filed suit against FHTM before taking over their offices in Lexington and warehouse in Danville along with freezing his company and personal assets.
"We believed FHTM was operating a massive pyramid scheme that involved more than 100,000 people across the US and several other countries. We think the damage to consumers is in the hundreds of millions of dollars," said Conway at a press conference Monday.
The FTC says members of FHTM benefited from signing up other members, not selling their products which included organic shampoos and pills known as fruit and vegetable essentials. They say the company was making upwards of $30 million a month, while members lost money.
"90 percent of FHTM members earn 15 dollars a year or less, but by the time you pay the initiation fee and the package fee for products it costs about $1,500 a year to be a member," says Conway.
While members know him as their president, Orberson is also known around Kentucky for his donations to University of Kentucky athletics. Conway's office says Orberson donated $100,000 for Coach John Calipari's Hoops for Haiti. He also has an office named for him at the Nutter Field House on UK's campus after donating $1.6 million for the expansion.
"I'm aware Mr. Orberson's been a donor to UK Athletics. I don't foresee, I don't want to rule anything in or out, but I don't foresee going and taking away back the football offices at the Nutter center or anything like that."
Conway does say he and the FTC are going to do everything they can to recover the money lost through the company and get it back to those who thought they were signing up to do legitimate marketing.
Conway said he will also turn the case over to the Commonwealth's Attorney in Lexington. The allegations against him could lead to felony charges.
University of Kentucky said they have no comment on pending litigation and say the charges against Orberson have nothing to do with the University.
If you think you've been a victim of the company, call 202-326-2643 to make a report.