So, you think your cash-gifting “sponsor” has your best interest at heart?
Three women who were “leaders” of a cash-gifting scheme in Connecticut were arrested earlier today on charges of conducting a pyramid scheme and engaging in a conspiracy, wire fraud and tax fraud, federal prosecutors said.
The scam operated between 2008 and 2011, reached beyond Connecticut’s borders and allegedly featured an element of “intimidation” aimed at a prospect who questioned the purported opportunity.
Prosecutors today published snippets of emails sent over multiple months and linked to the alleged scheme, which gathered purported “gifts” $5,000 at a time using a food theme.
“[K]eep bringing in new blood,” one of the emails allegedly read in part. “It is a fact when women get excited about making money, they tend to over extend . . .”
Another email allegedly advised in part that potential recruits needed “to Shit or get off the pot . . .”
It has been known for months that a grand-jury probe into so-called “gifting tables” has been under way in Connecticut. That probe now has resulted in the arrests of Donna Bello, 55, of Guilford; Jill Platt, 64, of Guilford; and Bettejane Hopkins, 66, of Essex.
An indictment filed yesterday that names Bello, Platt and Hopkins also includes the word “co-conspirators,” suggesting others may be charged.
“The indictment alleges that the three defendants ran a pyramid scheme designed to enrich themselves at the expense of other participants,” said U.S. Attorney David B. Fein. “In addition, the indictment alleges that the defendants tried to use the pretext of ‘gifting tables’ as a way to avoid paying taxes on the substantial illegal proceeds of their scheme.”
Fein noted that the probe, which is being led by the IRS, is ongoing.
Bello, Platt and Hopkins “conspired to defraud the IRS by misrepresenting to recruits and participants that monies given and received during the scheme were legally considered tax-free ‘gifts’ under the IRS code and that lawyers and accountants had approved gifting tables as legal ventures that generated tax-free proceeds,” prosecutors said. “The indictment further alleges that Bello, Platt and Hopkins filed false tax returns that failed to report income generated from the scheme.”
Prosecutors today also released snippets of emails linked to the alleged cash-gifting scammers.
“[W]e need to keep silent and under the radar,” one of the emails read in part, prosecutors said.
Another allegedly read in part, “[A]s women we like our own stash. Keep it in a safe. Keep it quiet because rather not have red flags raised. Hiring accountants and atterneys [sic] is costly.”
A third allegedly read in part, “I am not a . . . saint . . . . I’m teaching you all how to make an extra 80 grand a year . . . . Isn’t that enough?”
Meanwhile, a fourth allegedly read, “It’s sort of a joke that I refer to our freezer as the ATM.” A fifth allegedly read, “They have had enough parties. Its [sic] costing us a small fortune in their food and wine delights. No more parties until they commit with the cash.”
From prosecutors (italics added):
. . . a gifting table is configured as a four-level pyramid, with eight participants assigned to the bottom row, four participants assigned to the third row, two participants assigned to the second row, and one participant assigned to the top row. The top row participant is referred to as the “dessert,” the two participants on the second row as “entrees,” the four participants on the third row as “soup and salads,” and the eight participants on the bottom row as “appetizers.” To join a gifting table, new participants were required to pay $5,000, typically in cash, to the dessert, that is, the participant occupying the top position on the pyramid. The $5,000 payment, which was fraudulently characterized as a gift, secured the new participant a position as an appetizer on the bottom row. Participants moved from the bottom row of the pyramid and progressed through a gifting table by recruiting additional people to join. When eight new participants joined a gifting table, each having made a $5,000 “gift” to the person occupying the dessert position at the top of the pyramid, the dessert left the gifting table and kept the $40,000 paid by the eight new participants. That particular gifting table was then split, with the two participants occupying the Entree position on the second row moving to the top position (dessert) of two new pyramids. The other incumbent members of the gifting table moved up a row on one of the two newly-formed pyramids, and the search for 16 new participants began. The success of the gifting tables depended on new participants joining and making the $5,000 “gift.”
The indictment alleges that from approximately 2008 to 2011, Bello, Platt and Hopkins oversaw and profited from this gifting tables pyramid scheme. The defendants recruited individuals to join the scheme, prepared and distributed materials to recruits that contained false representations, and misrepresented to recruits and participants that gifting tables was not a pyramid scheme. The indictment further alleges that in May 2010, the defendants attempted to intimidate a participant who had questioned the legality of the gifting table scheme.
Read the indictment, which includes information investigators allegedly gleaned from emails.
URGENT >> BULLETIN >> MOVING: UPDATED 10:18 P.M. EDT (U.S.A.) Two Connecticut women convicted of wire fraud and filing false tax returns in a multimillion-dollar cash gifting scam have been sentenced to a combined 10.5 years in federal prison, federal prosecutors announced tonight.