WASHINGTON — An Arizona company that sells "Internet malls" — Web sites with links to retailers — will pay $5 million back to its customers to settle charges that it operated an illegal pyramid scheme, federal regulators announced Tuesday.
Mark and Harry Tahiliani, the proprietors of the Web site called Bigsmart.com, also agreed to post a $500,000 bond before engaging in another similar marketing operation, the Federal Trade Commission said.
Bigsmart charged more than $100 for each mall, the FTC said, and said that customers would make substantial income on the deal if they continued to recruit more participants. Customers received commissions if visitors clicked links on their site and made purchases at the stores.
A spokeswoman for Bigsmart, based in Mesa, Ariz., did not return a call for comment Tuesday.
The company's Web site states that despite the settlement agreement it is still in business.
Bigsmart customers who believe they qualify for refunds should call the commission at 1-202-326-3294.