Raleigh Company, Shut Down By Government, Wants To Reopen After Authorities Shut It Down
Posted March 17, 1998 6:00 a.m. EST
RALEIGH — A Raleigh-based marketing company, shut down because the government says it's a pyramid scheme, is fighting to reopen.
The president of International Heritage wants a federal judge to let him keep on selling, as long as he only sells products.
International Heritage claims 10,000 sales reps in North Carolina - 175,000 in the US and Canada. The growing company posted more than $100 million in sales last year.
But, what are they selling -- actual products, or just the chance to get rich? Last year, International Heritage president Stan Van Etten scrambled to bring his sales pitch in line with state law. Now, Van Etten is scrambling again.
Van Etten stood in the lobby of the building, where he once ran International Heritage. As of yesterday, he locked out of his own office.
International Heritage began as a network marketing firm with a twist. They were selling fine items like jewelry, leather, and crystal -- the same way that Amway sells soap and Mary Kay sells cosmetics. Those network marketing firms are perfectly legal.
But, the North Carolina attorney general and the Securities and Exchange Commission concluded that International Heritage was not selling like Amway or Mary Kay. They believed that the company was more interested in selling the chance to sell than selling actual products.
And 1,600 International Heritage independent sales reps wrote the attorney general to ask for refunds. David Parrish was one of them.
Stan Van Etten is asking a federal judge to let International Heritage reopen as long as it does not expand its sales force. The SEC attorney in charge of this case told WRAL that he may agree to something along those lines, but he added that the way International Heritage used to do business is history.