Sponsor of the 16th Annual LA Music Awards
We affirm the district court’s holding that BurnLounge was an illegal pyramid scheme, in violation of § 5(a) of the FTCA. BurnLounge’s scheme satisfied both prongs of the Omnitrition test because Moguls paid for the right to sell products, the rewards BurnLounge paid were primarily for recruitment, and Moguls were clearly motivated by the opportunity to earn cash rewards from recruitment. We reject the argument raised by BurnLounge and Arnold that the district court abused its discretion when it admitted Vander Nat’s testimony because the testimony was relevant and reliable. The district court’s decision as to these two issues is AFFIRMED.