BULLETIN: 7 Michigan Women Charged With Felonies In Cash-Gifting Scheme; State Police Issue Alert On Pyramid Schemes Targeting Women; Ask Public To Report Gifting Offers

So, you want to involve your family, friends and business associates in a cash-gifting scheme and tell them it it perfectly legal?

Seven women have been charged with felonies in Michigan and the Michigan State Police (MSP) are warning that schemes targeting women are sweeping across the state.

MSP is asking members of the public to contact the department if they receive an offer for a gifting pyramid scheme. The schemes spread by plucking heartstrings and making people believe they are becoming a part of a legal enterprise.

One of the schemes is known as “Women Integrity Group.” It suggests a $5,000 gift can lead to a return of $40,000.

The office of Michigan Attorney General Mike Cox has been warning about gifting scams for years.

“No matter how these schemes are presented, the bottom line is the same for all — cash gifting schemes are illegal in Michigan,” prosecutors warned in October 2008.

“Cash gifting schemes are the quintessential example of a pyramid scheme,” prosecutors warned. “Instead of selling products, cash gifting schemes forgo the sale of products and just give people cash, but the premise is the same — like other pyramids, cash gifting schemes are based on the amount of people recruited.”

The Muskegon Chronicle reported that seven women from Newaygo County had been charged in the alleged scheme.

Local TV stations also have devoted coverage to the gifting scheme.

Here, according to prosecutors, is the Michigan law that applies:

Section 28 of the Michigan Franchise Investment Law (MCL 445.1501 et seq.) makes pyramids illegal in Michigan.  The statute reads in part:

[a] person may not offer or sell any form of participation in a pyramid or chain promotion.  A pyramid or chain promotion is any plan or scheme or device by which (a) a participant gives a valuable consideration for the opportunity to receive compensation or things of value in return for inducing other persons to become participants in the program or (b) a participant is to receive compensation when a person introduced by the participant introduces one or more additional persons into participation in the plan, each of whom receives the same or similar right, privilege, license, chance, or opportunity.

Essentially, a pyramid is a scheme in which participants receive compensation for recruiting other participants.

Violations of Section 28 of the Michigan Franchise Investment Law are a felony, punishable by a fine of up to $10,000 or seven years in prison.

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2 Responses to “BULLETIN: 7 Michigan Women Charged With Felonies In Cash-Gifting Scheme; State Police Issue Alert On Pyramid Schemes Targeting Women; Ask Public To Report Gifting Offers”

  1. But this can’t be. Why Title 26 of the IRS Code says they can gift up to $13,000 per person per year to anyone they want. Juat ask any cash gifter about this. They prominently display this in all their material and spiel.

    Never mind they leave out the last sentence that says, “Your gifts must be given WITH ABOSLUTELY NO EXPECTATION OF RECEIVING ANYTHING IN RETURN. It’s just a pesky detail they don’t want to talk about.

    I hope this is the omen of what is to come with all the others that are out there stealing millions. I can thinkk of at least 10 we would love to see get busted just like this one.

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  2. If Section 28 of the Michigan Franchise Investment Law is real,

    Do they sell insurance in Michigan?

    I worked at Primerica for 1 month. They are the most legal ponzi.

    Just to top it off; Insurance companies are attempting to make the government to require purchases of insurance. Now lets talk about referral commissions if the whole country is required to buy your product.

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