2 Former FutureNet Execs Settle Federal Charges

Two former executives at FutureNet Inc., a Valencia-based network marketing company, agreed on Tuesday to settle federal charges that they took part in a pyramid scheme that offered Internet distributorships.

The Federal Trade Commission said it reached an agreement with Robert Depew and David Soto, barring the former executives from engaging in pyramids in the future.

The settlement, in which the two men did not plead guilty, requires them to post a $1-million bond before engaging in any multilevel marketing plan.

The settlements represent the latest with executives related to FutureNet, which markets a hodgepodge of services including TV, long-distance telephone connections and deregulated electricity.

In April, the FTC announced a $1-million settlement with the company and its two top executives, Chairman Alan Setlin and President Chris Lobato. In November, another agreement to settle similar charges was announced with FutureNet founder Larry Stephen Huff.

The FTC filed charges against FutureNet in mid-February, alleging that the company and its five principals conducted a scheme that promised a lifetime income to those who paid between $195 and $794 for a distributorship to sell Internet access devices.

The FTC’s complaint charged that the claims were false and violated federal law because 90% of those who took part in the pyramid lost their money.

In addition, the agency alleged, the so-called lucrative Internet devices actually sold more cheaply at retail stores such as Sears and Circuit City.

Only the fees paid by new recruits to the scheme would keep the money stream flowing, the FTC charged.