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Tag: Newaygo County pyramid scheme

  • 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.”

  • 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.