MyrtleBeachOnline:
The pitches came in S.C. offices, restaurants, nightclubs, living rooms – and even the USC football complex.
How about opening your own online music store with BurnLounge?
USC receivers coach Steve Spurrier Jr. paid $500 to start his a year ago.
So did Charles Wilkie, an owner of Headliners music club in Columbia’s Vista.
S.C. Attorney General Henry McMaster and his wife were asked to invest. They declined.
Former USC football standouts Rob DeBoer and Todd Ellis became two of the company’s biggest promoters.
Columbia
has generated more visits to BurnLounge’s Web site than any other city
worldwide, according to Google. Now the company that caught Columbia’s
eye is under scrutiny.BurnLounge is accused of being an illegal
investment scheme in a lawsuit filed by the Federal Trade Commission
last week. The company declined comment Saturday.DeBoer was
named in the FTC lawsuit, along with BurnLounge, its CEO, Alex Arnold,
and two Texas men, who, like DeBoer, promoted business opportunities,
the FTC said. Ellis was not named in the suit.The commission
accuses BurnLounge of running a pyramid scheme because the company paid
more money for recruiting new store owners than for selling music.Operators
earned bonuses up to $50 for recruiting two new operators and selling
two albums a month, while paying 50 cents per album sold, the complaint
said.The lawsuit said promoters, including DeBoer, misrepresented how much they had earned.
"Guys,
we’ve made just under $300,000. Todd Ellis’ next door neighbor made
$280,000. We’ve got a dozen people that have made over $100,000,"
DeBoer is quoted as saying at a recruitment meeting, according to FTC
documents obtained by The (Columbia) State.
