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An article in today’s The State further explores the still-developing profile of the BurnLounge investors, claiming that former South Carolina football stud Rob DeBoer had “a hand in recruiting 30,000 people” to the online music store – which the Federal Trade Commission alleges is a pyramid scheme.
And among those 30,000 are some well-respected Palmetto State athletes.
DeBoer, who was sued for allegedly misrepresenting earnings from BurnLounge, promoted the New York-based company with ex-USC quarterback and Gamecock football announcer Todd Ellis — helping turn Columbia into ground zero for BurnLounge.
They hosted events in Columbia nightspots and living rooms to market BurnLounge franchises — customizable Web pages that rewarded buyers with free music or cash for selling songs or additional franchises priced between $30 and $430.
Their promotion, along with the involvement of other well-known sports personalities, created a jock-inspired network of investors across the Sunbelt, including University of Oklahoma football head coach Bob Stoops and some of the biggest names on both sides of the Clemson-South Carolina rivalry .
Ex-Clemson football coach Danny Ford and former USC running back and Heisman Trophy winner George Rogers both said they lent their names in exchange for franchises that ended making little or no money.
Those invested in BurnLounge sites included USC football head coach Steve Spurrier’s sons — one a Gamecocks assistant coach, the other a player on the team.
Other former athletes associated with BurnLounge:
• Former USC baseball player D.T. Cromer, who played in the Oakland Athletics organization with DeBoer and sells real estate in Lexington County
• Will Merritt, a former Clemson lineman who is a member of the Tigers’ broadcast team
• Kip Bouknight, a former national baseball college player of the year from USC now in the Pittsburgh Pirates’ farm system. [JASON RYAN and JOSEPH PERSON - The State]
They also have a pretty good rundown of “how it works” in the piece. And, we have to say, this story had one of the best leads from a writer at The State we’ve seen in a while:
Before making enemies with the Federal Trade Commission, Rob DeBoer tried to make as many friends as he could.
Good job guys, good job.
Burnlounge Ceo Alex Arnold resigned late Monday afternoon. Do you think he cut a deal with the FTC?
http://www.dmwmedia.com/news/2007/06/18/ceo-of-music-store-burnlounge-target-of-ftc-probe-resigns
CEO of Music Store BurnLounge, Target of FTC Probe, Resigns
Submitted by Mark Hefflinger on June 18, 2007 – 1:42pm.
New York – BurnLounge, a service that lets fans create their own music stores that the Federal Trade Commission (FTC) last week branded a pyramid scheme and is seeking to shut down, announced on Monday that CEO Alex Arnold has resigned.
BurnLounge co-founders Ryan Dadd and Stephen Murray, along with the company’s board, unanimously approved the appointment of Grant D. Johnson — a current board member and BurnLounge investor — to succeed Arnold as chief executive.
Johnson is a founding managing partner at Benevolent Capital, and also owns music label Tomato Records.
“This change in management is a first step towards a reinforced focus on building the entertainment company we’ve always envisioned,” said BurnLounge president and co-founder Stephen Murphy.
“We’re entering a critical growth period for the company and we believe we have the right team in place to fuel this next evolution of the business to benefit our employees, artists, partners, and independent retailers.”
The company maintains that its “revolutionary business model” is lawful, and said it is “working to understand and address any legitimate issues and concerns that the FTC may have.”
A hearing on the FTC’s demands for an injunction and asset freeze against BurnLounge will be held in fedearl court in California on Tuesday.
[...] appears that the good folks at BurnLounge, who are in the midst of a heavy-hitting Federal Trade Commission lawsuit, have decided to update [...]