Three Defendants within the “worker leaks” case have filed a countersuit in opposition to Paparazzi’s co-founders.
Defendants and now Counterclaim Plaintiffs Geraldine Souza, Jennifer Carrol and Jaime Robinson allege, amongst different issues, that Paparazzi is a pyramid scheme.
Counterclaim Plaintiff’s Criticism was filed alongside a solution to Paparazzi’s lawsuit, largely denying allegations in opposition to them.
Paparazzi filed swimsuit in opposition to the Defendants again in April, in an try to cease them leaking “confidential and guarded data”.
Named defendants within the filed August fifteenth Counterclaim are Paparazzi co-founders Misty Kirby, Trent Kirby, Chantel Reeve and Ryan Reeve.
As alleged within the Counterclaim;
Paparazzi’s enterprise mannequin is closely, if not fully, depending on recruiting and retaining people to function as Consultants for Paparazzi.
Because of this, Paparazzi compensates and incentivizes its Consultants to recruit extra Consultants who in flip, recruit extra Consultants.
Beneath Paparazzi’s compensation construction, Consultants should recruit different people into Paparazzi earlier than they’re eligible to obtain the overwhelming majority of bonuses, commissions, or different compensation.
BehindMLM reviewed Paparazzi Equipment in October 2021. Raised issues had been encouragement of Consultants to purchase “massive quantities of inventory”, stock loading and necessary purchases – all hallmarks of an MLM pyramid scheme.
The Counterclaim continues;
Paparazzi’s 2021 earnings disclosure confirms {that a} Advisor’s proper to obtain compensation is derived primarily upon that Advisor recruiting different people into the pyramid versus promoting Paparazzi’s jewellery.
The typical “month-to-month bonus” for a level-1 Advisor and level-2 Advisor is barely $12.49 and $23.67 respectively. The “bonus” for these ranges might be as little as $0.10.
Nonetheless, after recruiting a minimum of three extra Consultants, the potential compensation will increase dramatically.
At stage 3, the month-to-month bonus is greater than eight instances the level-2 bonus and greater than fifteen instances the level-1 bonus.
At stage 14, the typical month-to-month bonus is greater than 6,536 instances the level-2 bonus and 12,402 instances than the level-1 bonus.
Thus, Consultants can not advance except they’re recruiting different people into the pyramid. And the development of a Advisor doesn’t require that Advisor to promote Paparazzi’s jewellery and equipment.
Paparazzi’s “lead and nickel free” scandal can also be introduced up.
Throughout eleven claims of reduction, the Counterclaim seeks to carry Paparazzi accountable for alleged
- violations of Utah’s Pyramid Scheme Act;
- violations of the Lanham Act;
- violations of California’s Client Authorized Treatments Act;
- violations of Texas’ Misleading Commerce Practices Act;
- violations of Idaho’s Client Safety Act;
- violations of Utah’s Client Gross sales Practices Act;
- breach of specific guarantee;
- breach of implied guarantee;
- violations of California’s False Promoting Legislation;
- fraudulent misrepresentation; and
- negligent misrepresentation
Paparazzi’s co-founders have but to reply to the Counterclaim.
Trying ahead, a Case Administration Convention has been scheduled for September twenty seventh.