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09.02.2008 11:36 am

YTB’s “Coach” and Elvis’ plane

St. Louis Post-Dispatch
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lisamarie_opt.jpgThere I was, reading Tim Logan’s excellent story in Sunday’s Post-Dispatch about YTB International when a name from the past jumped out at me:  J. Lloyd Tomer.

Why, just a couple of weeks ago, I’d been regaling my colleagues with a story from my days as a young general assignment reporter, and the time I found this small-town preacher who’d bought Elvis Presley’s airplane. And suddenly, there he was, on the front page of my newspaper. To quote Logan’s story:

YTB was launched in 2001 by three Alton-area veterans of the multilevel marketing industry: J. Lloyd “Coach” Tomer, a former pastor from Benton, Ill., who became a high-level salesman for insurance company A.L. Williams; his son Scott, who’s now YTB’s chief executive; and longtime business partner Kim Sorensen.

YTB (for YourTravelBiz) is based in Wood River. It is a multi-level marketing organization that sells folks a chance to become online travel agents. For $450 up front, and $50 a month thereafter, YTB members sell vacation packages. They also sell other YTB franchises. California Attorney General Jerry Brown says it’s a pyramid scheme, where only the people who get in early are likely to make any money. As Logan reported Sunday:

YTB’s 8,500 agents became 22,000 by the end of 2005. Then nearly 60,000 a year later. At the end of 2007, they had more than 131,000 agents and claimed 303,000 sales reps. Revenue boomed, too, nearly tripling to $141 million last year, when the company earned its first-ever profit. And a major trade publication ranked them the nation’s 26th-biggest travel agency.

“And it’s going to get better and better and better,” Lloyd Tomer said a weekly conference call this month.

Along the way, the Tomers prospered. Scott Tomer and Sorensen each earned $2.3 million in cash, benefits and stock last year, according to filings with the Securities and Exchange Commission. Lloyd Tomer earned $3.5 million. Top salespeople made out well, too: A couple earned more than the top execs last year, and 11 sales directors topped $800,000, according to the company’s publicly available income disclosure statement. Dozens more earned six figures.

lloyd_opt3.jpgYTB’s defenders say it’s more like like Amway and Mary Kay Cosmetics, multi-level marketing plans that deliver useful products, in YTB’s case, exotic travel and vacations. Illinois Attorney General Lisa Madigan has launched her own investigation, and two class action lawsuits have been filed in East St. Louis against YTB on behalf of disgruntled members.

But here’s the thing: If it is a pyramid scheme, it’s not the first one J. Lloyd  Tomer has been involved with. Nor, for matter, is it the most unusual one.

When I met him, back in May, 1978, “Coach” Tomer was “Pastor” Tomer of the First Church of God in Benton. I drove over to visit him after reading that his church had bought a half-interest in Elvis Presley’s airplane, the Lisa Marie. Elvis had died the previous August, and the good pastor, then 44, was convinced that folks would pay $300 apiece to tour The King’s refurbished Convair 880.

Visitors would also get to hear the plane’s crew share stories about flying Elvis and his posse around the country, including the time he woke everyone up at 2 a.m. to fly to Denver where he could get his favorite fried peanut butter and banana sandwiches.

And as if the tour and tales of The King weren’t enough, Tomer told me, each and every visitor would get 12 $30 kits containing a gasoline additive called “Add-a-Tune” and a chance to sign up as a distributor for the product. Tomer’s partner, a Dallas businessman named Robert Philpott, claimed that treating your car’s engine with Add-a-Tune would boost its mileage by 2 to 6 miles a gallon.

“At times,” Tomer told me, “God says to me, ‘Go get ‘em, Tiger,’ and I go get ‘em.”

He figured the promotion would easily pay off the church’s$800,000 building debt within a year. Plus, church members would get on the ground floor as Add-a-Tune distributors, selling more distributorships and becoming wealthy. I told him it was the most elaborate church fundraising scheme I’d ever heard of. “We could have had a chili supper, I suppose,” Tomer said.

Alas, the 50-state tour that Philpott and Tomer planned for the Lisa Marie never got off the ground. By June of 1978 the Texas attorney general had quashed the marketing plan as being in violation of the state’s deceptive trade practices law. Philpott was discovered to have had problems with the IRS and  the SEC.  By July the Lisa Marie had been repossessed (it’s now parked near Graceland in Memphis). And a lot of people were stuck with dozens of cases of a useless oil additive.

Pastor Tomer became Insurance Man Tomer, and now is Coach Tomer. As Logan’s story recounts, he and his son are wheeling and dealing on a massive scale, renting out the Edward Jones Dome for rallies, buying and selling mansions doing lots of business with firms owned by YTB insiders.

I don’t know whether YTB is a pyramid scheme or not, but I’ve met Lisa Madigan and I would not like to have her on my trail. Maybe the Coach should have stuck to chili suppers after all.

Photos: The Lisa Marie on display near Graceland in Memphis. J. Lloyd Tomer and his son, Scott, at a YTB rally Aug. 8 in St. Louis.  (Post-Dispatch photo by Christian Gooden)

7 comments

Comments are closed.

Gawd… bring back Alex Mayer so we’ll have some decent content on this forum again.

*

— RoFe
12:09 pm September 2nd, 2008

thank you and do not stop investing. you are right on and there is so much more that people dont know about

— melissa
9:55 am September 5th, 2008

It appears there is a fetish for planes. Their general counsel (John D. Simmons)just resigned from the YTB Board and he is the guy who still holds the paper on the mansion the Coach has on the river. As the Post Dispatch continues to investigate, it will be interesting to see what evolves. I am with the other poster—I bet there is a LOT more to come!

— jwf21403
10:40 am September 9th, 2008

It is very interesting that the post has become a place for the attack on YTB and MLM’s. Every time I look on STL Today there is a story about YTB. I would like to see how this company made it through the Federal Trade Commission all these years and now STL Today has an article everyday on how bad it is. I am not a member or owner of YTB but if over the last 7 years there hasn’t been a negative report about them, how is it now that the company is passing up name brand travel companies that St. Louis has it as “The talk of Day” everyday?
I think there is something up with this so called investigation if by now there has been no founding yet but their upset members are crying wolf weeks into the business. Seemed to be ok to sale travel online when the big boys have been doing it all these years, now that Joe from St. Louis can do the same thing it illegal huh?

— James
1:26 pm September 9th, 2008

You have to recognize one important thing…If YTB was a TRUE MLM or Networking company, they would be paying a lot more from the acutal product being sold each month like a Mary Kay or Herbalife…With those companies, you only earn money when someone buys product, period! In 2007 with 100,000+ reps all across the US doing $300+ Million in sales revenue….paying out only $15 Mil to $18 Mil on acutal travel…that is where the states have a problem…It’s a signup game…Plain and simple!!!
Not a real MLM….The writing has been on the wall for sometime now.

— Larry Smith
3:21 pm September 11th, 2008

James–just some background. YTB was never vetted by the SEC. They became a publicly traded company by the reverse merger with RezConnect which was a publicly traded company so they essentially were “grandfathered” into all those “investigations” that the recruiters like to say happened to prove they are legitimate.

And, once the current management was in place, they were tossed from the OTC board for accounting irregularities and for failure to file timely reports. They were relegated to the Pink Sheets and just recently were reinstated to the OTC. However, they recently have withdrawn their application to be listed on the AMEX due to the current issues.

I think the attention is due to arrogance. They barged into the travel industry with little to no desire to sell travel. They forged some partnerships which worked out and others that did not–Royal Caribbean and their brands refuse to work with them among other respected travel suppliers. They received IATAN accreditation and decided they did not need to abide by their rules and proceeded to re-sell the number and subsequently lost their accreditation. They were in negotiations with the AG for 18 months (supposedly) and when talks broke down, the AG filed suit. Now, most legitimate companies do not have 18 month relationships with the AG of the largest state.

Couple that with 300K+ Reps and 138K RTAs all professing riches for nothing, decimating the travel industry, and essentially saying whatever needs to be said to seal the deal and you have a problem.

And lets not forget that YTB is a “saviour” of sorts in the local area. The development, the hiring (well they are laying off now) and so forth.

But I think they have some serious issues right now.

— jwf21403
10:27 am September 12th, 2008

I am getting really tired of all the attacks on YTB. MLM’s do work according to two of the wealthiest men in this country, Donald Trump and Robert Kiyosaki. And so what if YTB is making a profit. I work my business and get paid. Aren’t businesses allowed to make a profit? I would be surprised if there wasn’t a company in this country with a few skeleton’s in their closet. Everyone needs to get off their case and let them grow just like every other company. Also, it seems to me that most companies are built in a way that the peon employees can’t make more than their boss, who can’t make more than their boss, so on and so on. You can’t make more than the “BOSS”. In YTB I can make as much as I am willing to work for. Why don’t you go pick on these banks that are stupid enough to loan money to people who can’t afford a mortgage and that need $85 trillion dollars to get bailed out using my money to do it.

— jgs
10:00 am October 1st, 2008