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Tag: Michigan pyramid schemes

  • UPDATE: 8 More Women Charged In Michigan Cash-Gifting Probe, Bringing Total Since December To 15; BBB Releases Video That Adds To Prior Warning About ‘Thousands’ Of Gifting Scams Promoted Online

    Just prior to Christmas last year, seven Michigan women were charged with felonies in an alleged cash-gifting pyramid scheme that targeted women.

    Now, just prior to Memorial Day, eight more women have been charged, bringing the total number of women charged to date to 15. The Michigan State Police said last year that gifting schemes were sweeping across the state.

    The Muskegon Chronicle was among the first newspapers to report on the new defendants.

    Separately, the BBB has added a video on cash-gifting scams and added to its previous warning about “thousands” of such schemes using YouTube and the Internet to proliferate.

    In August 2008, after the U.S. Secret Service seized tens of millions of dollars in the AdSurfDaily autosurf probe, some ASD members immediately turned to cash-gifting, positioning it as a way for ASD members to make up their losses. Gifting scams typically pluck heartstrings, targeting people of faith, people down on their luck and people who can ill afford to lose a single dollar, let alone hundreds or thousands at a time.

    “Cash gifting is a pyramid scheme — pure and simple,” the BBB says. “There are thousands of YouTube videos and websites out there touting cash gifting as an empowerment program or a way to make easy money from the security of your home.”

  • NEW HAVEN REGISTER: Feds, State Investigating Cash-Gifting Schemes In Connecticut; Grand Jury Convenes; State AG Called Gifting Programs The Business Of ‘Parasites’ In Statement About ‘The Women’s Gifting Table’ Last Year

    State and federal probes into cash-gifting schemes are under way in Connecticut, the New Haven Register is reporting.

    Investigators are concerned about so-called “Women’s Gifting Tables,” and women soon will be called before a federal grand jury, the newspaper reported.

    Similar probes are under way in Michigan. Seven women were charged with felonies last month, and the Michigan State Police issued a warning that gifting schemes targeting women were sweeping across the state.

    The Connecticut probe began more than a year ago, when then-Attorney General Richard Blumenthal warned that the schemes were illegal and doomed to collapse. Blumenthal is now a member of the U.S. Senate, and the gifting probe now is under the direction of George Jepsen, Connecticut’s new attorney general.

    Gifting is the business of parasites, Blumenthal said in November 2009, noting that “The Women’s Gifting Table” had been positioned as a “sisterhood” in which women provide a $5,000 gift to another woman in the network.

    Participants were encouraged to take cash advances on their credit cards and even to sell their cars and family heirlooms to grease the “pernicious” pyramid-scheme wheel, Blumenthal said.

    “As new women join the group, others move to higher ‘positions’ to eventually receive their own gifts totaling much more than their initial contribution,” Blumental said.

    “Gifting clubs take more than they gift — often ending in economic ruin for participants and their families,” Blumenthal said. “A gifting club is merely a fancy name for an old-fashioned pyramid scheme that bleeds newcomers to feed the parasites above them. Even as I investigate, I urge all Connecticut citizens to immediately reject and report such schemes.

    “Gifting clubs are the gifts that keep on taking,” he continued. “These fraudulent clubs exploit economic catastrophe — urging newcomers to sell their belongings, jeopardize their credit and assume devastating debt with deceptive and dangerous promises. Citizens facing foreclosure and job loss may risk everything for these ominous opportunities.

    “State and federal law prohibit all pyramid schemes because each one is a house of cards doomed to collapse,” Blumenthal said. “Any offer involving upfront money payments with promises of riches, but no product or service, should be considered suspect.”

    In August 2008 — in the days immediately following the seizure of tens of millions of dollars in the AdSurfDaily autosurf Ponzi scheme probe — some ASD members raced to forums in bids to recruit members for emerging cash-gifting schemes.

    Efforts to recruit members for other autosurf and HYIP schemes also continued after the seizure of assets in the ASD case.

    Some gifting schemes are targeted at people of faith and promoted as an opportunity to “pay it forward” to put cash in the hands of participants while positioning yourself also to get a pile of cash. The language of “pay it forward” increasingly has become a marker that a scam is under way.