LV network marketer sues FDIC

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Monday, March 20, 2000 | 11:33 a.m.

Las Vegas network marketer Equinox International Corp. sued the Federal Deposit Insurance Corp. in federal court in Denver, accusing the federal agency of failing to cover nearly $1 million in lost deposits.

The Rocky Mountain News of Denver reported that Equinox lost $982,000 in payroll funds when BestBank, a Boulder, Colo., bank, failed on July 23, 1998. The bank failed two days after Equinox electronically transferred the funds to BestBank. Equinox later agreed to cover all losses suffered by its representatives.

The FDIC maintains it's only liable to repay $100,000 to Equinox -- the maximum deposit insurance coverage the agency provides to every account holder. But Equinox maintains it sent instructions to deposit the funds in the accounts of 80 Equinox sales representatives, so all funds should be insured.

Equinox is currently embroiled in a legal battle with the Federal Trade Commission and eight states, including Nevada. The FTC and states accuse Equinox of operating an illegal pyramid scheme, a charge the company denies.