The PHP Agency lawsuit landscape covers several distinct fronts: a federal contract and trade-secrets suit PHP filed against a group of departing agents in Texas, counterclaims from those agents alleging PHP lured them with false income promises and withheld commissions, a regulatory finding that PHP’s recruiting posts made misleading earnings claims, and plaintiff-firm investigations tying PHP agents to alleged fraud in the sale of indexed universal life (IUL) insurance policies. Here is what each one involves and where it stands.
PHP Agency v. Martinez: The Agent Defection Suit
In 2021, PHP Agency sued a group of former associates led by Jose Martinez in the U.S. District Court for the Northern District of Texas after they left for a competitor, Family First Life. The case, PHP Agency, Inc. v. Jose Martinez et al. (Civil Action No. 3:21-cv-00418-X), was assigned to Judge Brantley Starr.
PHP’s complaint brought nine claims. Four were breach-of-contract counts under the company’s New Associate Agreement, covering alleged misuse of a proprietary database, improper recruiting of other PHP agents, early affiliation with a competitor, and violations of the agreement’s business-ethics provisions. PHP also brought federal and state trade secret claims under the Defend Trade Secrets Act and the Texas Uniform Trade Secrets Act, plus tortious interference with contract, tortious interference with prospective economic advantage, and defamation.1GovInfo. PHP Agency Inc v Martinez et al, Memorandum Opinion and Order (Jan 10, 2022)
On January 10, 2022, Judge Starr dismissed three counts — the two tortious interference claims and the defamation claim — for inadequate pleading, giving PHP 28 days to replead. The remaining six claims, including the breach-of-contract and trade secret counts, survived the defendants’ motion to dismiss.1GovInfo. PHP Agency Inc v Martinez et al, Memorandum Opinion and Order (Jan 10, 2022)
The Former Agents’ Counterclaims Against PHP
The defendants, referred to in court as the “Hayward Parties,” filed counterclaims against PHP and several individuals: Alejandro Aguilar, Hector Del Toro, Erika Del Toro, and R. Aguilar. They alleged PHP recruited them with false promises about agent income, business opportunities, and lead sources. Once they left, they said, PHP withheld commissions, overrides, and residuals they had earned and then contacted their former clients to cancel existing policies and replace them with new ones sold by agents still at PHP.2vLex. PHP Agency Inc v Martinez
The counterclaims included fraud, breach of written and oral contracts, violations of California’s Unfair Competition Law and Texas’s Deceptive Trade Practices Act, insurance code violations in both states, and tortious interference with business relationships. The former agents also asked the court to declare PHP’s New Associate Agreement void and unenforceable, arguing its restrictions effectively barred independent contractors from working anywhere in the life insurance industry after leaving.3GovInfo. PHP Agency Inc v Martinez et al, Memorandum Opinion and Order (Sep 27, 2022)
On September 27, 2022, Judge Starr issued a mixed ruling on PHP’s motion to dismiss those counterclaims. The fraud count was dismissed for failing to meet the heightened specificity standard of Federal Rule of Civil Procedure 9(b). The breach-of-contract counts were dismissed because the Hayward Parties did not identify which specific provisions of the agreement were breached. The California and Texas consumer protection claims were also dismissed. All of those dismissals were without prejudice, with 28 days to replead.3GovInfo. PHP Agency Inc v Martinez et al, Memorandum Opinion and Order (Sep 27, 2022)
One counterclaim survived intact: tortious interference with business or contractual relationships. The court found the allegation that PHP contacted the departing agents’ clients to terminate and replace their policies stated a plausible claim at the pleading stage. The public court records do not reflect what happened after that September 2022 order, including whether the Hayward Parties refiled the dismissed counts or how the case ultimately ended.
The New Associate Agreement at the Center of the Dispute
PHP’s New Associate Agreement is the contract driving much of the Martinez litigation. Agents sign on as 1099 independent contractors responsible for their own taxes, equipment, and licensing. The agreement bars false or misleading representations about potential income, requires ethical conduct, and includes a non-disparagement clause covering PHP, its leadership, and its products. It also states that agents “cannot earn income from sponsoring new agents” — income is supposed to come from commissions on insurance sales.4PHP Agency. New Associate Agreement Policy
New associates pay a one-time $199 enrollment fee with a three-business-day refund window, and an annual platform fee applies after the first year. The former agents in Martinez argued the restrictive provisions as a whole made it nearly impossible to keep working in the life insurance industry after leaving PHP, going directly to whether the contract is enforceable.4PHP Agency. New Associate Agreement Policy2vLex. PHP Agency Inc v Martinez
Regulatory Finding on Misleading Earnings Claims
PHP has also been through a regulatory inquiry, separate from the private litigation. The Direct Selling Self-Regulatory Council (DSSRC), a program administered by BBB National Programs, opened Case #209-2025 to review 14 posts on Facebook, YouTube, and PHP’s website published between September 2024 and January 2025. The posts promoted “financial freedom,” “unlimited growth potential,” “generational wealth,” and specific figures such as “$450,000” in 12 months and “six-figure income.”5BBB National Programs. PHP Agency DSSRC Closure
The DSSRC concluded that the posts created a misleading impression that a typical PHP agent could expect significant income, contrary to FTC guidance for multi-level marketing companies, which treats significant earnings as atypical and requires reliable empirical backing. PHP did not attempt to substantiate the claims. Instead, it removed or modified all 14 posts, added social media compliance requirements to its New Associate Agreement, launched a mandatory Social Media Compliance Certification for agents, held field leadership training, and hired a third-party monitoring firm to audit future agent posts. The DSSRC closed the case administratively on April 14, 2025, calling PHP’s remedial efforts “necessary and appropriate.”5BBB National Programs. PHP Agency DSSRC Closure
PHP’s own 2022 income disclosure gives context for why those claims drew scrutiny. Of paid agents, 44% earned less than $1,000 for the entire year and another 31% earned between $1,000 and $5,000. Fewer than 2% earned $100,000 or more. The average annual income for the largest group — the bottom 44% — was $388.59.6PHP Agency. PHP Agency LLC Income Disclosure 2022
IUL Fraud Investigations Involving PHP Agents
PHP has also drawn attention from plaintiff-side attorneys pursuing indexed universal life insurance fraud claims. IUL policies are complex life insurance products whose cash value tracks a stock market index. Plaintiff firms allege that PHP agents routinely marketed these products as guaranteed “tax-free retirement income” vehicles comparable to Roth IRAs, used unrealistic back-tested performance illustrations, promoted “Be Your Own Bank” loan strategies without disclosing the risk of policy collapse, and failed to explain how fees, caps, and rising insurance costs could erode returns.
PHP’s primary IUL carrier, National Life Group, is itself a defendant in Virani v. NLV Financial Corporation, filed in October 2024 in the District of Vermont. Plaintiff Sanya Virani purchased an IUL policy in September 2023 and alleged it credited 0% interest in its first year despite sales materials relying on favorable back-tested data. The complaint asserted breach of contract, deception, and racketeering claims.7CourtListener. Virani v NLV Financial Corporation8Insurance News Net. Vermont Judge Sides With National Life on IUL Illustrations Lawsuit
The broader wave of IUL litigation reaches beyond PHP’s carrier. NASCAR driver Kyle Busch and his wife, Samantha, sued Pacific Life Insurance Company in North Carolina state court in late 2025, alleging they paid more than $10.4 million in premiums on IUL policies marketed as safe, self-funding retirement vehicles and suffered net losses exceeding $8.58 million; an independent review reportedly projected the policy would lapse within 16 months. The Busches are represented by RP Legal LLC, the same firm that has publicly named PHP Agency as a company it investigates for IUL-related claims.9Insurance News Net. Kyle Busch Case a Day of Reckoning for Indexed Universal Life The Busch case itself is not against PHP.
Is PHP Agency a Pyramid Scheme?
The pyramid-scheme question comes up regularly around PHP because of its MLM structure. In a 2021 investigation, Local 24 News in Memphis reported that the Better Business Bureau of North Texas, where PHP was accredited with an A-minus rating, considered the company a “lawful MLM.” BBB spokesperson Monica Horton said pyramid schemes typically lack a product and involve money changing hands without a sale, while PHP requires agents to be licensed, fingerprinted, and background-checked before selling insurance. The A-minus rating reflected 174 customer complaints, which the BBB considered proportional for a company with more than 20,000 agents.10Local Memphis. Pyramid Scheme or Not a Pyramid Scheme – A Closer Look at PHP Agency The DSSRC finding and PHP’s own income disclosure still point to a wide gap between the earnings promoted in agent recruiting posts and what most participants actually make.
Ownership Since the Integrity Acquisition
Integrity Marketing Group acquired PHP Agency on July 20, 2022. One source describes the deal as valued at “$250 million plus future earn outs,” though the official press release did not disclose financial terms. Patrick Bet-David became a Managing Partner at Integrity as part of the transaction, and PHP employees were included in Integrity’s Employee Ownership Plan. PHP gained access to Integrity’s technology platform, carrier relationships, and shared legal and compliance services.11PR Newswire. Patrick Bet-David and PHP Agency Joins Integrity to Accelerate Growth and Serve More People12Blue Ocean Strategy. From $2 Million to $250 Million With Blue Ocean Strategy PHP’s website still lists Bet-David as founder and CEO, and the company states it serves nearly half a million Americans through more than 27,000 agents.13PHP Agency. About Us14Integrity. PHP Agency