Torres v SGE Management LLC

Update:  September 23, 2011, Torres files SECOND AMENDED ORIGINAL CLASS ACTION COMPLAINT



Amended Complaint filed in 06/2009 reads in part:

The Defendants have created, operated and maintained a pyramid and endless chain scheme. Specifically, the defendants induced Torres, Robison and others to invest in the "Ignite Services Program" ("Services Program") for $329.00 and purchase an "Ignite Homesite" web page for $29.00 a month for the right to recruit new individuals to do the same with false promises of enormous profits.

As is expected in any pyramid scheme, those at the very top make more and more money. For example, between July 2005 and June 2006, the highest paid Executive Director received $819,089.50. By July 2007 to June 2008, the highest paid Executive Director received $2,148,615.50, an increase of 262%. In contrast, between July 2005 and June 2006, the average Qualified Director received $460.31. By July 2007 to June 2008, the average Qualified Director received only $174.06. This is a decrease of 264%. Therefore, while those on the bottom of the Pyramid are progressively receiving less and less, those at the top, including the Presidential and Executive Defendants, are making excessive sums from the illegal Pyramid.


Amended Complaint filed in 09/2011

Fifth Circuit Holds Arbitration Provision Illusory and Unenforceable

In Juan Torres v. S.G.E. Management, L.L.C., the Fifth Circuit Court held that Ignite Representatives do not have to submit to arbitration as their contract called for.

This case came about when Juan Ramon Torres and Eugene Robison filed suit against Stream Energy.  Ignite is a subsidiary of Stream Energy. Torres and Robison allege that Stream Energy is conducting an illegal pyramid scheme in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1967 et eeq. 

Stream Energy moved to dismiss the case stating when Torres and Robison signed their original agreement, they had agreed that all disputes would be arbitrated.  The Fifth Circuit Court threw out the arbitration clause stating since Stream Energy had the right to change the original agreement at any time as per the agreement, but Torres and Robison did not have that same right, that made the arbitration agreement void.