SEC Shuts Down Raleigh Firm, Alleging Pyramid Scheme
Posted March 16, 1998 6:00 a.m. EST
RALEIGH — New troubles abound for a Raleigh-based company that was accused last year by NC Attorney General Mike Easley of operating a pyramid scheme. Tuesday, the Securities Exchange Commission temporarily shut down International Heritage Incorporated for the same reason.
On June 3, the attorney general reached a settlement with International Heritage and its president, Stan Van Etten of Raleigh. Van Etten denied he ran a pyramid, but he agreed to change the way he did business and pay back $1.1 million. Now, however, the attorney general says the pyramid continued in other states.
In May, International Heritage's offices on Glenwood Avenue were humming with business. Now, the office is closed. The landlord changed the locks and installed a metal bar to prevent anyone without a new key from from entering. Easley says the Securities and Exchange Commission has taken over.
Easley says he recovered $1 million for people who bought into International Heritage. A total of 1,600 people complained about the company. No other business in the history of the consumer protection office has received that many complaints.
Last May, company Van Etten told WRAL-TV5 Investigative ReporterStuart Watsonthe accusations of running a pyramid scheme caught him by surprise.
Van Etten told Watson by phone Tuesday the SEC action was again a surprise. Now he says he was "dumbfounded, shocked, and can't even imagine how that came about."
Van Etten asked for a hearing late Tuesday afternoon before a federal judge in Atlanta, saying "We are prepared to defend our right as a business enterprise. We intend to prevail." International Heritage purports to sell items such as fine crystal and jewelry, but Easley claims the company was just selling the chance to sell, otherwise known as a pyramid scheme.
Easley says since reaching a consent agreement with International Heritage, the company has been "clean" in NC, but he says the complaints have continued.
The SEC action apparently came to a head after International Heritage stock skyrocketed in price last week and the SEC suspended trading.