MLM Company Defense Law Firm

Experienced Defense Counsel for MLM Companies and Executives

Attorney Nick Oberheiden
MLM Company Defense Team Lead

While there is nothing inherently unlawful about multi-level marketing (MLM)or direct sales companies, comparisons to Ponzi schemes and pyramid schemes have led to intensive scrutiny from federal and state authorities in recent years. We have seen multiple highly-publicized cases of the Federal Trade Commission (FTC), U.S. Department of Justice (DOJ), State Attorneys General (AGs), and other authorities targeting MLM companies and their executives—with these cases resulting in substantial penalties in many cases. Civil litigation is a persistent concern for many MLM, network marketing companies, and direct selling companies as well.

Oberheiden P.C. is an MLM company defense law firm comprised of highly experienced defense attorneys, former state and federal prosecutors, and former federal investigative agents. With extensive experience on both sides of high-stakes civil and criminal matters, we know what it takes to successfully defend against all types of state and federal allegations. Whether your MLM company is under regulatory investigation for unfair or deceptive acts, facing charges, or facing litigation—or if you personally are facing civil or criminal charges as an MLM company executive—we are prepared to deploy our team and resources to execute a strategic defense.

Matters We Handle for MLM Companies

We handle all types of high-stakes civil and criminal matters for MLM companies and their executives. This includes (but is not limited to):

FTC Investigations and Enforcement

The FTC holds primary responsibility for overseeing the MLM industry at the federal level. Along with enforcing general consumer protection regulations, the FTC also enforces rules and regulations that are specific to MLM companies.

This includes the federal rules and regulations governing financial disclosures or income claims. Increasingly, the FTC is targeting MLM companies’ earnings claims as opposed to lodging Ponzi scheme and pyramid scheme allegations—because false claims in MLM companies’ financial disclosures are easier to prove.

For all MLM companies, FTC compliance needs to be a priority. But even those that effectively prioritize compliance can still face scrutiny, so being prepared for this scrutiny is essential. If the FTC is investigating your MLM company or pursuing enforcement action on any grounds, our lawyers can get to work defending your company (and defending you, if necessary) immediately.

SEC Investigations and Enforcement

The U.S. Securities and Exchange Commission (SEC) has also taken an interest in targeting MLM companies and their executives in recent years. In particular, the SEC has focused on targeting companies accused of operating Ponzi schemes and pyramid schemes involving cryptocurrency.

For example, in December 2024 the SEC charged an “alleged crypto company” and its principals with perpetrating a $650 million fraud scheme, alleging that the MLM company had promoted a fraudulent “crypto asset investment program” for four years. We have recently seen other similar legal issues as well, and Ponzi schemes have long been a top enforcement priority for the SEC.

FDA Investigations and Enforcement

The U.S. Food and Drug Administration (FDA) has recently taken an interest in MLM companies as well. This is largely a result of companies using influencers to promote cosmetics, dietary supplements, and other FDA-regulated products online.

Similar to FTC and SEC investigations, FDA investigations can present a variety of risks. If the FDA determines that an MLM company is in violation of the Food, Drug, and Cosmetic Act or any other law or regulation within the Administration’s enforcement jurisdiction, it can pursue injunctions, fines, and other penalties. We have extensive experience representing a wide range of clients in FDA investigations and enforcement matters, and our team includes former FDA agents and investigators.

Federal Criminal Investigations and Prosecutions

Along with administrative and civil enforcement matters, MLM companies and their executives can (and frequently do) face criminal scrutiny as well. The DOJ has also taken action to target MLM companies in Ponzi scheme and pyramid scheme investigations in recent years. In criminal cases, MLM companies and their executives can face a wide range of charges, including:

Criminal conspiracy
Mail fraud and wire fraud
Money laundering
Securities fraud
Other federal financial and white-collar crimes

In criminal cases, the DOJ often aggressively pursues substantial fines in prosecutions targeting MLM companies, and targeted MLM company executives can face both fines and federal incarceration. As former U.S. Attorneys, Assistant U.S. Attorneys, and Special Agents, many of our lawyers and investigators have experience on both sides of these cases, and we rely on this experience to target favorable resolutions that avoid indictments and criminal charges whenever possible.

BBB and State AG Investigations and Enforcement

Along with federal investigations and law enforcement matters, we handle Better Business Bureau (BBB) and state AG investigations and enforcement proceedings as well. With a nationwide network of trial counsel, we are able to handle state matters across the country. Here too, promptly assessing the allegations at issue and building a strategic defense is critical, and our MLM company defense law firm can provide legal representation on an emergency basis when necessary.

Business Litigation

We defend MLM companies in business litigation as well. Like all companies, MLM companies can face litigation on a variety of fronts, including lawsuits from vendors, competitors, shareholders, lenders, and other parties. In business litigation matters, we focus on protecting our clients’ interests as efficiently as possible—targeting confidential settlements when it makes sense to do so and pursuing defenses and counterclaims in court when necessary. Some examples of the types of cases our lawyers handle include:

Antitrust litigation
Breach of contract litigation
Breach of fiduciary duty claims
Data privacy and security litigation
Intellectual property (IP) and licensing litigation
Non-compete litigation
Shareholder and partnership disputes

While much of our business litigation practice is focused on defense, we also serve as plaintiff’s counsel for MLM companies that need to enforce their contractual rights and IP rights, and that need to pursue legal action for other reasons. No matter what type of business litigation needs your MLM company may have, we can provide efficient, strategic, and results-focused representation.

Dr. Nick Oberheiden

Founder

Attorney-at-Law

Lynette S. Byrd

Former DOJ Trial Attorney

Partner

Brian J. Kuester

Former U.S. Attorney

Hon. Kevin McCarthy

55th Speaker, U.S. House of Representatives (ret.)

Government Consultant

Mike Pompeo

Of Counsel

Former U.S. Secretary of State

John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara

Federal Appeals Attorney

Nicholas B. Johnson

Former Prosecutor

Roger Bach

Former Special Agent (DOJ)

Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen

Former Supervisory Special Agent (FBI)

Investor, Class Action, and Mass Tort Litigation

We also defend companies in investor, class action, and mass tort litigation. These lawsuits can involve substantial liability exposure, and even facing allegations can cause significant reputational harm. We have the capabilities required to handle complex multi-party litigation on a nationwide scale. In many cases, class action and mass tort claims will go hand-in-hand with state and federal law enforcement matters, so it is often critical for MLM companies to have defense counsel with experience in both of these areas.

FAQs: Civil and Criminal Defense for MLM Companies

Why is the FTC Investigating My MLM Company?

The FTC could be investigating your MLM company for a variety of reasons. FTC agents regularly scrutinize MLM companies’ operations, often in response to complaints from investors, customers, salespeople, competitors, and other parties. The FTC monitors for evidence of Ponzi schemes and pyramid schemes online as well, and it also launches investigations on its own initiative. When you engage our MLM company defense law firm to represent you, one of our first priorities will be to discern the trigger, focus, and scope of the FTC’s inquiry.

What Are the Risks of Facing FTC, FDA, SEC, and DOJ Investigations for MLM Companies?

For MLM companies, the risks of facing FTC, FDA, SEC, and DOJ investigations are substantial. Not only can these investigations lead to administrative and civil enforcement actions (resulting in injunctions, fines, and other penalties), but they can lead to criminal prosecution as well. In criminal cases involving allegations of wire fraud, money laundering, investor fraud, and other federal offenses, MLM company owners and executives can face both fines and prison time.

What Should I Do if I Received a Federal Civil Investigative Demand (CID) or Subpoena?

Due to the risks involved in facing an MLM-related investigation, if you have received a CID or subpoena, you should engage experienced defense counsel immediately. At Oberheiden P.C., our lawyers have extensive experience defending companies that have received federal CIDs and subpoenas, and many of our lawyers and consultants used to issue these demands as federal prosecutors and agents.

How Can I Prove that My MLM Company is Compliant?

If your MLM company is facing scrutiny from the FTC, FDA, SEC, DOJ, or any other law enforcement authority, being able to affirmatively demonstrate compliance could help bring the inquiry to a swift and favorable resolution. However, MLM companies (and other targets) must be extremely careful about voluntarily disclosing business records to law enforcement authorities, so it is critical to engage experienced legal counsel to help you determine how best to move forward.

When Do I Need to Hire an MLM Company Defense Law Firm?

Multi-level marketing companies will need to engage experienced defense counsel in a wide range of circumstances. Our law firm defends MLM companies and their executives in civil and criminal enforcement matters as well as all types of business, class action, and mass tort litigation. If you have questions about engaging defense counsel, we encourage you to contact us for a complimentary consultation.

Contact Us to Speak with an MLM Defense Lawyer in Confidence Today

To speak with an MLM defense lawyer at Oberheiden P.C., call us at 888-680-1745 or contact us online. We will arrange for you to speak with one of our senior lawyers in confidence as soon as possible.