Trek Alliance Review and Profile

Trek Alliance no longer appears to be active as a direct sales company.

Trek Alliance is no longer active. A federal court halted Trek Alliance’s operations in 2003, and the company and its principals entered final FTC settlements in December 2005.

Original Npros business profile for Trek Alliance, preserved below for archival purposes:

Trek Alliance began operating around 1997 as a multilevel marketing company selling water-filtration systems, household cleaning products, nutritional supplements and beauty aids. The company was based in Incline Village, Nevada, and operated nationally through independent distributors, also called Independent Business Owners. Trek Alliance was closely associated with former leaders and distributors of Equinox International, an MLM company that had previously settled federal and state pyramid-scheme allegations by agreeing to liquidate approximately $40 million in assets.

Distributors could earn income from product sales and by recruiting and developing other distributors. According to the Federal Trade Commission, however, Trek's presentations emphasized recruitment as the principal route to substantial income. New participants were encouraged to purchase hundreds of dollars in products to enter at higher compensation levels, attend paid training seminars, rent space in regional offices and maintain telephone lines used to recruit others. The company and its distributors advertised potential monthly earnings ranging from $2,000 to $20,000.

The FTC sued Trek Alliance, Trek Education Corporation, VonFlagg Corporation and company principals in December 2002. The complaint alleged that distributors placed advertisements in newspaper "Help Wanted" sections that implied salaried employment was available, then presented respondents with an MLM recruiting opportunity. The FTC also alleged that the company made deceptive earnings claims, failed to disclose that most participants would not earn substantial income, inadequately enforced its stated retail-sales requirements and operated an illegal pyramid scheme in which most participants lost money. A temporary restraining order froze the defendants' assets and placed the company under a receiver, followed by a preliminary injunction in August 2003 that halted the disputed practices.

Final settlements entered on December 13, 2005, required approximately $1.5 million in consumer redress. Kale Flagg was ordered to pay $360,000, Richard and Tiffani Von Alvensleben were ordered to pay $515,000, Harry Flagg was ordered to pay $20,000, and the defendants' insurer agreed to pay an additional $600,000. Kale Flagg, the Von Alvenslebens and the corporate defendants were permanently banned from multilevel marketing. Harry Flagg was prohibited from participating in illegal pyramid schemes but was not subjected to a complete MLM ban.