Under state law, all pyramid schemes, regardless of name, are illegal. « We hope this case serves as a warning to others that these systems are not worth the risk. Participants see their hard-earned money coming in, but most will never see a dime come back, » said Grégoire. Some black supporters of illegal Ponzi schemes are using the Black Lives Matter movement to justify `sou-sou` scams – it seemed to be legal, » said the Maryland resident who contacted me as part of her due diligence research. « I didn`t want to bring anyone in unless I was sure, because I didn`t want anyone to lose their money. » « A lot of people are committed to 2020 because it has become the year of very low interest rates and exceptional stock market volatility, » Bronnenkant said. Some people don`t like any of these options and have looked elsewhere. This can unfortunately lead to potentially illegal activity. Gift clubs are illegal Ponzi schemes, in which new club members usually give cash « gifts » to the most senior members. If you get more people to join you, they promise that you will rise to the highest level and receive a gift that is much bigger than your initial investment. But few people benefit from this program and most people lose their investment. But Mr. Lawson, this is a « gift, » not an advertisement for anything.
It is a Christian movement: in New Zealand, for example: « Women who lead a circle or invite others to join can be fined up to $600,000 per offence. Gift circles are illegal in Australia and Canada, and in the United States, the FBI investigated the issue, where more than 20 county women were convicted of fraud and tax evasion, including two sentenced to 14 years in prison in Connecticut in 2013. (Reference below) When people get together in a circle to give each other gifts without exchanging money, this is called a gift circle. If people gather in person or online because they are recruited and the recruiter receives money or gifts for each person recruited, it is a gift program – which is also an illegal Ponzi scheme. « While it is true that receiving a gift is not generally considered taxable income, it can be difficult to argue that the proceeds of potentially illegal activity should be treated as a gift, » said Eric Bronnenkant, auditor and tax managing director at Betterment. Eight years ago, a friend asked me to support a young woman who wanted to join a women`s gift circle but was looking for sponsorship because she didn`t have the $5,000 to participate. It was at a time when I had been working hard and accumulating savings, and I decided to support her with half the money she needed. When she reached the « receiver position, » she received $40,000, which we then shared. I readily admit that the motivating factor for me was certainly money.
However, it was also sincere to be able to support this woman in her process and development. For her part, I sincerely believe that even though money mattered, her motivation to participate came from a deep desire for connection, understanding, and a place on a women`s council. Months passed before she apologetically told me that the circle had collapsed and dissolved. On Monday night, KPRC 2 Investigates is on the trail of a local woman accused of organizing virtual gift circles. We will also hear from the woman she is accused of stealing $8,000 for a blessing circle. Find out what the accused had to say about the accusations against her that she stole thousands of people who poured into her gift circles. In 2013, a federal jury found two Connecticut women guilty of tax evasion for running a gift circle and failing to pay taxes on their profits. The leader was eventually sentenced to 48 months in federal prison, Hartford Current reported.
Gift programs, on the other hand, are all about payment. Despite their alluring New Age rhetoric of a gift economy, they are just a modern version of an old-fashioned Ponzi scheme. Cash gift programs skip the sale of products and only give people money, but the principle is the same – like other pyramids, cash gift programs are based on the number of people recruited.