ACN Inc.

Last updated

ACN, Inc.
Company type Private
Industry Multi-level marketing, telecommunications
Founded1993
FoundersRobert Stevanovski
Gregory Provenzano
Anthony Cupisz
Michael Cupisz
[1]
Headquarters
Concord, North Carolina
,
US
Products
RevenueUS$750 million (2016)[ citation needed ]
Number of employees
1,100
Website acn.com

ACN, Inc. is a North American multi-level marketing (MLM) company. [2] It provides telecommunications, energy, merchant services and other services, depending on the country, through a network of independent sellers who also can recruit other sellers. Based in Concord, North Carolina, United States, ACN began operations in the United States in 1993. [3] As of 2019, the company reported that it operates in twenty-seven countries. [4] [ failed verification ]

Contents

Donald Trump and three of his children had some involvement with ACN during his term as president of the United States. In 2018, a class action lawsuit was filed against them alleging fraud, false advertising, unfair competition, and a now-dismissed allegation of racketeering. [5] [6] In July 2021, a US appeals court ruled that the case cannot go to arbitration. The lawsuit is ongoing as of March 2022. [7] [8] It would be dismissed from federal court in January 2024, with the plaintiffs asked to refile in the state courts where they reside. [9]

Business model

The company is based in Concord, North Carolina, United States. ACN has international offices located in Montreal, Canada; Amsterdam, the Netherlands; Sydney, Australia; Wrocław, Poland; Gothenburg, Sweden; [10] Seoul, South Korea, and the United Mexican States.[ citation needed ]

ACN's income disclosure statement bears the warning that "not all ACN independent representatives make a profit and no one can be guaranteed success as an ACN independent representative." [11]

History

In 1993, Robert Stevanovski, Greg Provenzano, and twin brothers Tony and Mike Cupisz founded the American Communications Network, Inc. ACN opened for business in January 1993 with twenty initial "independent representatives".[ citation needed ] ACN's initial business was as a marketing arm for a long-distance reseller called LCI Communications. This relationship lasted for five years until LCI was acquired by Qwest Communications. By 1998, ACN was listed in Inc. Magazine's "Inc. 500" list as No. Twenty-two in this annual list of the five hundred fastest growing private companies in America. [12]

ACN operated as a gas and electricity retailer, through the subsidiaries ACN Energy and ACN Utility Services, prior to its energy assets being acquired by Commerce Energy Group in 2006. [13] In 2008, ACN moved its headquarters from Farmington Hills, Michigan to Concord, North Carolina. [14] [15] In 2014, ACN expanded operations to Latin America, beginning first with Mexico. In 2016, ACN expanded operations in Japan. By 2019, ACN was operating in 26 countries and five continents.

From 2006 until he announced his presidential candidacy in 2015, ACN had a business relationship with former The Apprentice executive producer Donald Trump. Trump spoke at ACN events, featured their products on an episode of The Apprentice , and took part in ACN promotional videos. [16] [17] [18] [19] Following the official beginning of his 2016 presidential candidacy, all references to Donald Trump were removed from the ACN website, and Trump distanced himself from the company in an interview with The Wall Street Journal . "I know nothing about the company other than the people who run the company," Trump told them. "I’m not familiar with what they do or how they go about doing it, and I make that clear in my speeches." [20]

Services

ACN offers landline telephone service (local and long distance), Voice over Internet Protocol (VoIP), high-speed Internet, satellite television, cellular phone through the company's own mobile virtual network operator (MVNO), Flash Wireless, and home security services, primarily to consumers, and secondarily to small businesses. Beginning in 2011, ACN also began offering an ACN-branded international calling smartphone app available for iPhone, Android and Symbian, reselling WiMAX wireless Internet, and technical support service for personal and business computers, as well as getting back into the energy reselling market through partner XOOM Energy. [21]

With variations depending upon the country of operation, provision of ACN's services follows three models:

  1. The reselling of ACN-branded services originating in an incumbent provider. This is exemplified by local and long-distance telephone, where ACN buys local telephone service from an incumbent provider such as Qwest or AT&T, and bills customers in its own name. This model was made possible by telephone industry deregulation beginning in 1996; prior to this, ACN was involved solely in reselling long-distance telephone service. It was the expansion of deregulation internationally that made it possible for ACN to begin to operate outside the United States.
  2. Acting as a sales agent for the service provider, where an ACN representative sells the service, but order fulfillment, billing, and servicing is performed by the branded provider. In the US, ACN resells Internet service through AT&T. ACN offers wireless services through its own MVNO called Flash Wireless on Sprint and Verizon's networks. Television services are provided through DIRECTV and Dish Network. Home security and automation is offered through Vivint. [22] ACN now also resells energy (electricity and natural gas) through Planet Energy and Xoom Energy.
  3. The selling of ACN-branded and provided services. These are Voice over Internet Protocol [23] in which ACN owns and maintains its own network of servers. Starting in January 2011, ACN has also added an ACN-branded computer technical support service to its service offerings. [24]

On June 13, 2002, ACN settled a case with the Bureau of Consumer Services in Pennsylvania wherein it was alleged that "independent business owners" (IBOs) were "slamming" or switching consumer services without authorization. ACN disputed the allegations and the exact details of the settlement are under court seal. However, the suit alleged that 135 informal complaints were filed with the Bureau of Consumer Services (BCS) between June 2000 and November 2001, consisting of 22 consumers alleging that their generation service was switched without authorization ("slamming"), 81 alleged instances of overcharging ("cramming"), and 32 complaints with allegations of various violations of the commission's regulations contained in Chapter 54, 56, and 57 of Title 52 of the Pennsylvania Code. [25]

In August 2010, the Montana Commissioner of Securities and Insurance Monica Lindeen announced the issuance of a Cease-and-Desist Order and Notice of Proposed Agency Action against ACN, Inc. and several of its founders for operating a pyramid scheme. In September 2010, the Commissioner moved to vacate the Cease-and-Desist Order in full settlement of the case. [26] During the Commissioner's investigation, the Commissioner determined that the actions giving rise to the initial concerns were not part of the ACN business model, but instead were isolated instances taking place by certain ACN's independent representatives in Montana. The Commissioner and ACN agreed that ACN would implement additional training with its independent representatives to assist them in better understanding their responsibilities as ACN independent representatives and that ACN would contact its Montana video phone customers to assist them with the installation of their service. [27]

Doe et al. v. Trump Corp. et al.

In July 2019, a SDNY District Judge permitted state-level charges of fraud, false advertising, and unfair competition against Donald Trump and his children Donald Jr., Ivanka, and Eric related to their involvement with ACN. (The judge, however, dismissed racketeering (RICO) allegations against the family.) [5] [6] [28] The Trumps are accused of not having disclosed that they were being paid by ACN when they recommended ACN as a sound investment. As part of the discovery process, the Trumps were ordered in March 2020 to provide information from Trump Organization business records for 15 years back to 2005. [29] The Trumps sought to take the case to private arbitration, but the SDNY District Judge denied their request on April 8, 2020. [30] On May 18, 2020, the District Court ruled against ACN and Donald Trump's motion for a Stay in the case. Trump had sought a stay during his term as President of the United States. [31] The case was dismissed from federal court on January 12, 2024. [32]

Related Research Articles

<span class="mw-page-title-main">Amway</span> American multi-level marketing company (1959– )

Amway Corp. is an American multi-level marketing (MLM) company that sells health, beauty, and home care products. The company was founded in 1959 by Jay Van Andel and Richard DeVos and is based in Ada, Michigan. Amway and its sister companies under Alticor reported sales of $8.9 billion in 2019. It is the largest multi-level marketing company in the world by revenue. It conducts business through a number of affiliated companies in more than a hundred countries and territories.

Vector Marketing is a direct selling subsidiary company and the marketing arm of Cutco Corporation, an Olean, New York–based cutlery manufacturer.

Holiday Magic was a multi-level marketing organization, founded in 1964, by William Penn Patrick (1930–1973) in the United States. Originally the organization distributed goods such as home-care products and cosmetics. Company distributors were encouraged to recruit other distributors in a multilevel marketing structure, which was later characterized as a pyramid scheme.

Trump University was an American company that ran a real estate training program from 2005 to 2010. It was owned and operated by The Trump Organization. A separate organization, Trump Institute, was licensed by Trump University but not owned by The Trump Organization. In 2011, amid multiple investigations, lawsuits and student complaints, it ceased operations. It was founded in 2004 by Donald Trump, who was U.S. president from 2017 to 2021, and his associates Michael Sexton and Jonathan Spitalny. The company offered courses in real estate, asset management, entrepreneurship, and wealth creation.

<span class="mw-page-title-main">The Trump Organization</span> Businesses owned by Donald Trump

The Trump Organization is an American privately-owned conglomerate owned by Donald Trump. It serves as the holding company for all of Trump's business ventures and investments, with around 250 of its affiliates and subsidiaries using the Trump name. Donald Trump joined the organization in 1968, began leading it in 1971, renamed it around 1973, and handed off its leadership to his children in 2017 after he won the 2016 United States presidential election.

In re Amway Corp. is a 1979 ruling by the United States Federal Trade Commission concerning the business practices of Amway, a multi-level marketing (MLM) company. The FTC ruled that Amway was not an illegal pyramid scheme according strictly to the statutory definition of a pyramid scheme, but ordered Amway to cease price fixing and cease misrepresenting to its distributors (participants) the average participant's likelihood of financial security and material success.

<span class="mw-page-title-main">BurnLounge</span> American multi-level marketing company

BurnLounge, Inc. was a multi-level marketing online music store founded in 2004 and based in New York City. By 2006, the company reported 30,000 members using the site to sell music through its network. In 2007, the company was sued by the Federal Trade Commission for being an illegal pyramid scheme. The company lost the suit in 2012, and lost appeal in June 2014. In June 2015, the FTC began returning $1.9 million to people who had lost money in the scheme. The company is dormant pending additional appeals.

Vertrue Incorporated, headquartered in Norwalk, Connecticut, is an American consumer services marketing company. The company again received an "F" from the Better Business Bureau for making unauthorized charges to its customers' credit cards. In 2007 it was acquired by a trio of investment firms, including Rho Ventures. In 2010, Vertrue and two of its subsidiaries were found guilty of defrauding nearly 500,000 of their customers in Iowa.

Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salaried workforce selling the company's products or services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation commission system.

<span class="mw-page-title-main">MonaVie</span> Multi-level marketing company

MonaVie is a defunct, American multi-level marketing company that manufactured and distributed products made from blended fruit juice concentrates, powders, and purées. The company was the subject of several controversies. Health claims for its products had not been scientifically confirmed or approved by regulatory authorities, and its chairman had been previously involved in false health claims concerning another beverage company. According to Forbes, MonaVie's business plan resembled a pyramid scheme. In 2015, the company defaulted on a US$182 million loan and went into foreclosure. Florida-based Jeunesse Global took over MonaVie’s assets when it purchased the note for $15 million.

<span class="mw-page-title-main">YTB International</span> American multi-level marketing company

YTB International, known as YTB Global Travel, Your Travel Biz or YTB, is a multi-level marketing business through owner-affiliated websites offering travels, excursions, and lodgings. The company was funded in 2001 by J. Lloyd Tomer, Scott Tomer, and Kim Sorensen. The company is currently owned by Sam Hathi.

<span class="mw-page-title-main">Iris 3000 Videophone</span> SIP videophone manufactured by UMEC for ACN

The Iris 3000 is a SIP videophone manufactured by UMEC for ACN Inc. It features a 7-inch screen, CMOS Camera, an idle-time photo frame, and a standard phone jack to attach it to a cordless telephone for use throughout a home. It uses high-speed internet to connect with the service provider's network and thence to worldwide telephone systems.

Ambit Energy is an international multi-level marketing company that provides electricity and natural gas services in energy markets in the U.S. that have been deregulated. The company's corporate headquarters are located in Dallas, Texas, and its operations/call center headquarters are located in Barranquilla, Colombia. Ambit Energy was founded in 2006 in Addison, Texas by Jere Thompson Jr. and Chris Chambless.

<span class="mw-page-title-main">ViSalus</span> American multi-level marketing company

Vi is an American multilevel marketing (MLM) company based in Los Angeles, California, with offices in downtown Detroit, Michigan. The company is mostly known for the Body by Vi 90-Day Challenge platform. The company markets weight management nutritional products, dietary supplements and energy drinks in the United States, Canada, Italy and United Kingdom. Weight management products, including Vi-Shape meal replacement shake and Vi-Trim Clear Control Drink Mix, form the bulk of the company's sales.

VemmaNutrition Company was a privately held multi-level marketing company that sold dietary supplements. The company was shut down in 2015 by the FTC for engaging in deceptive practices and being a pyramid scheme.

From the 1970s until he was elected president in 2016, Donald Trump and his businesses were involved in over 4,000 legal cases in United States federal and state courts, including battles with casino patrons, million-dollar real estate lawsuits, personal defamation lawsuits, and over 100 business tax disputes. He has also been accused of sexual harassment and sexual assault, with one accusation resulting in him being held civilly liable.

<span class="mw-page-title-main">Business career of Donald Trump</span> Business Career Of The 45th President of the United States

Donald Trump began his career as a businessman at his father's real estate company, Trump Management, which he later renamed the Trump Organization. He expanded its business to Manhattan, where his father's financial and political backing enabled him to do his first deals, demolishing and renovating landmark buildings. After overextending himself and narrowly escaping personal bankruptcy in the late 1990s, Trump entered various businesses that did not require capital funding, including licensing his name to lodging and golf course enterprises around the world. Building on his public persona in the New York tabloid press, he later starred in the reality TV show The Apprentice.

The following is a list of notable lawsuits involving former United States president Donald Trump. The list excludes cases that only name Trump as a legal formality in his capacity as president, such as habeas corpus requests.

Arbonne International, LLC, known as Arbonne, is an international multi-level marketing company founded in 1980 in the United States by Norwegian entrepreneur Petter Mørck. Its product lines include vegan skincare, cosmetics, and nutrition. Arbonne's CEO is Tyler Whitehead, who succeeded Jean-David Schwartz in April 2021. Arbonne is headquartered in Irvine, California, US, with US offices in Chatsworth, California, Greenwood, Indiana, Addison, Texas, and international offices in Australia, Canada, New Zealand, Poland, and the United Kingdom.

Doe et al. v. Trump Corporation et al. is an ongoing case commenced in the U.S. District Court for Southern District of New York in October 2018, in which four anonymous plaintiffs filed a lawsuit against the Trump Corporation, Donald Trump and three of his adult children — Donald Jr., Eric, and Ivanka — alleging racketeering and of fraudulently encouraging unsophisticated investors to give large amounts of money to organizations connected to the Trumps. It is alleged that the defendants promoted the multi-level marketing company ACN Inc. in exchange for millions of dollars in secret payments from 2005 to 2015. The lawsuit says that Trump "told investors that he had 'experienced the opportunity' and 'done a lot of research,' and that his endorsement was 'not for any money.'" However, it subsequently emerged that Trump was a paid spokesman for at least one of the companies whose products and services he was promoting to investors.

References

  1. ↑ "ACN COMMUNICATION SERVICES, INC. Company Information from Hoover's". Hoover's. Archived from the original on July 13, 2007. Retrieved July 9, 2015.
  2. ↑ Campbell, David; Edgar, David; Stonehouse, George (April 1, 2011). Business Strategy: An Introduction. Macmillan International Higher Education. p. 11. ISBN   978-0-230-21858-1 . Retrieved April 15, 2018.[ permanent dead link ]
  3. ↑ Tuttle, Ian (March 14, 2016). "Trump's Multi-Level Marketing Telecom Endorsement Is Another Example of His Terrible Judgement". National Review. Retrieved August 3, 2022.
  4. ↑ "ACN Korea: Company: About ACN". acnkr.co.kr. Retrieved October 8, 2019.
  5. 1 2 "Docket for Doe v. The Trump Corporation, 1:18-cv-09936". CourtListener.com. May 9, 2019. Retrieved October 8, 2019.
  6. 1 2 "Complaint (final for filing) 4818-9714-0089 v.1 - gov.uscourts.nysd.503637.1.0 - Case 1:18-cv-09936 - Document 1" (PDF). CourtListener.com. October 29, 2018. Retrieved October 8, 2019.
  7. ↑ "Trump Lawyers Accused of Legal 'Gamesmanship' in Attempts to Keep Alleged Pyramid Scheme from Public Trial". www.msn.com.
  8. ↑ Shamsian, Jacob. "Trump and his 2 eldest sons are scheduled to be deposed for a lawsuit accusing them of promoting a scam multi-level marketing scheme". Business Insider. Retrieved August 3, 2022.
  9. ↑ Schoonover, Nika (January 12, 2024). "Federal judge dumps pyramid scheme lawsuit against Trump". Courthouse News Service. Retrieved March 25, 2024.
  10. ↑ "ACN Euro". 2020. Archived from the original on July 2, 2014. Retrieved Dec 30, 2020.
  11. ↑ ACN Inc. (2010). "ACN Income Potential - Compensation Plan". Archived from the original on May 23, 2010. Retrieved May 20, 2010.
  12. ↑ "The Inc 500 list". Truework. Archived from the original on April 9, 2021. Retrieved January 20, 2021.[ dead link ]
  13. ↑ "Commerce Energy Group Inc, Form 8-K, Current Report, Item 2.01. Completion of Acquisition or Disposition of Assets, Filing Date Feb 10, 2005". secdatabase.com. Retrieved May 14, 2018.
  14. ↑ "Telecom company ACN moves to Concord". Charlotte Business Journal. February 26, 2008. Retrieved October 10, 2010.
  15. ↑ "ACN Contact Information". ACN. Retrieved October 10, 2010.
  16. ↑ Tuttle, Ian (March 14, 2016). "Trump's Multi-Level Marketing Telecom Endorsement Is Another Example of His Terrible Judgement". National Review . Retrieved April 20, 2018.
  17. ↑ Celarier, Michelle (February 21, 2018). "Trump's Great Pyramid". Slate Magazine . Retrieved April 20, 2018.
  18. ↑ "ACN & Donald J. Trump". ACN Inc. Archived from the original on January 14, 2013. Retrieved July 26, 2015.
  19. ↑ "Donald J. Trump on ACN's Home Based Business". Archived from the original on August 2, 2012. Retrieved July 20, 2012.
  20. ↑ "Report: Donald Trump made millions from Concord company ACN". The Charlotte Observer. August 13, 2015. Retrieved September 18, 2015.
  21. ↑ "ACN Products". ACN. Archived from the original on April 29, 2011. Retrieved April 9, 2011.
  22. ↑ "ACN High Speed Internet" . Retrieved July 20, 2012.
  23. ↑ "ACN Digital Phone". ACN. Retrieved July 12, 2009.
  24. ↑ "ACN Premium Technical Support". ACN. Retrieved January 19, 2011.
  25. ↑ "Pennsylvania Public Utility Commission v. ACN Energy, Inc". Pennsylvania Public Utility Commission. June 12, 2002. Retrieved December 24, 2008.
  26. ↑ Motion to Vacate Temporary Cease and Desist Order
  27. ↑ "MT regulators, ACN settle Pyramid Scheme Investigation". KXLH. October 12, 2010. Archived from the original on February 23, 2014. Retrieved February 17, 2014.
  28. ↑ Stempel, Jonathan (July 24, 2019). "Trump must face marketing scam lawsuit, escapes racketeering claims: NY judge". Reuters . Retrieved October 8, 2019.
  29. ↑ Jacobs, Shayna (March 14, 2020). "Trump ordered to expand document search in suit alleging he endorsed pyramid scam". The Washington Post . Retrieved March 14, 2020.
  30. ↑ U.S. District Court, Southern District of New York (April 8, 2020). "Jane Doe et al vs. The Trump Corporation et al (PDF)" (PDF). DocumentCloud.org. Retrieved April 9, 2020.
  31. ↑ "Jane Doe v Trump Lawsuit Discovery (Law)". Scribd. Retrieved May 19, 2020.
  32. ↑ Schoonover, Nika. "Federal judge dumps pyramid scheme lawsuit against Trump," Courthouse News Service, Jan. 12, 2024. Retrieved Jan. 23, 2024.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.