Three defendants in the “employee leaks” case have countersued the co-founders of Paparazzi. 

Geraldine Souza, Jennifer Carrol, and Jaime Robinson, who are now Counterclaim Plaintiffs, contend, among other things, that Paparazzi is a pyramid scheme. 

A Plaintiff’s Complaint was filed with a response to the Paparazzi’s lawsuit, in which they largely denied the charges.  

In April, the paparazzi filed a lawsuit against the defendants to prevent them from revealing “private and protected information.” 

Misty Kirby, Trent Kirby, Chantel Reeve, and Ryan Reeve, co-founders of Paparazzi, are named as defendants in a counterclaim filed on August 15.

According to the counterclaim, The business strategy of Paparazzi relies largely, if not totally, on hiring and retaining individuals to serve as consultants. Paparazzi compensates and incentivizes its consultants to hire new consultants, who recruit additional consultants.  

In accordance with Paparazzi’s pay system, consultants are not eligible for the vast majority of bonuses, commissions, and other forms of remuneration until they have recruited other people into the organization.

In October 2021, Concerns were raised about consultants being encouraged to buy “huge quantities of stock,” inventory loading, and obligatory purchases — all characteristics of an MLM pyramid scam. 

The counterargument proceeds: Paparazzi’s 2021 revenue statement indicates that a consultant’s claim to remuneration is primarily based on the consultant’s recruitment of new members into the pyramid scheme, as opposed to the sale of Paparazzi’s jewelry. 

The average “monthly bonus” for consultants at levels 1 and 2 is only $12.49 and $22.67, respectively. This level’s “bonus” can be as low as $0.10. However, the potential remuneration grows considerably after recruiting at least three additional consultants.  

At level 3, the monthly bonus is greater than eight times the bonus at level two and greater than fifteen times the bonus at level one. At level 14, the average monthly bonus exceeds 6,536 times the bonus at level 2 and 12,402 times the bonus at level 1. 

Consequently, consultants cannot advance until they attract new members into the pyramid. And a consultant’s advancement does not necessitate the sale of Paparazzi’s jewelry and accessories.

The “lead and nickel free” Paparazzi controversy is also mentioned. Across eleven remedial grounds, the counterclaim seeks to make Paparazzi liable for alleged violations of the law. violations of the Utah Pyramid Scheme Act, the Lanham Act, the California Consumer Legal Remedies Act, the Texas Deceptive Trade Practices Act, the Idaho Consumer Protection Act, and the Utah Consumer Sales Practices Act; breach of explicit guarantee; breach of implied warranty. 

California’s False Advertising Law infractions and negligent misrepresentation The co-founders of Paparazzi have yet to respond to the counterclaim. 

A conference on case management has been organized for the 27th of September

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