A federal court has shut down Digital Income System and four of its operators, finding they bilked people with fake income promises and hidden earnings data.

The FTC secured a preliminary injunction against the company, Derek Jones Foley, William J. Foley, Jennifer Hedrick, and Kaitlyn Scott on December 21st. The move follows an earlier injunction against DIS promoter Brandon Frye.

The court found the defendants systematically lied to potential recruits. They misrepresented how much money people could actually make. They withheld required earnings disclosure documents. They pushed income claims they couldn't verify. They fabricated sales numbers within the system. And they promised to find customers for affiliates—a promise they had no ability to keep.

The judge concluded the FTC would likely win the case. The evidence showed the defendants violated the FTC Act and the Business Opportunity Rule, and continuing to let them operate posed immediate, irreparable harm to consumers.

The injunction freezes all assets connected to Digital Income System and bars the defendants from accessing the company's affiliate database. They're prohibited from making the same moves again.

Brandon Frye and Kaitlyn Scott both failed to respond to the court's orders, triggering default entries on December 23rd. That clears the path for the FTC to file for default judgments without a trial.

What happens next likely involves asset seizures and individual settlements as a court-appointed receiver takes control of what remains. Defendants in these cases rarely make it to trial. MLM fraud defendants almost never win when they do.

The case has moved to mediation as of late December. The receiver will file his first report soon, which should give a clearer picture of how much money was taken and how much the FTC can recover for victims.

🤖 Quick Answer

What is the Digital Income System (DIS) case about?
A federal court issued a preliminary injunction shutting down Digital Income System and four operators on December 21st, following FTC allegations of systematic fraud. The defendants misrepresented earnings potential, withheld disclosure documents, made unverifiable income claims, fabricated sales numbers, and promised customer recruitment services they couldn't deliver to recruits.

Who were the defendants named in the injunction?
The preliminary injunction targeted Digital Income System company, Derek Jones Foley, William J. Foley, Jennifer Hedrick, and Kaitlyn Scott. This action followed an earlier injunction against DIS promoter Brandon Frye, indicating ongoing enforcement against multiple individuals involved in the scheme's operations and promotion.

What fraudulent practices did the defendants employ?
The court found defendants systematically deceived potential recruits by misrepresenting income opportunities,

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