Help Stop the ‘Gifting’ Pyramid Scheme
This pyramid scheme targets law-abiding citizens who have no idea they are breaking the law.
The Gifting Pyramid Scheme usually targets groups of law-abiding citizens who are convinced to recruit their friends or acquaintances. New members have to pay their recruiter a $5,000 ‘gift’ to join. In turn, each member is expected to recruit new people so everyone can end up with $40,000.
Recruiters try to legitimize the buy-in payment by calling it a ‘birthday gift,’ a ‘transaction,’ or ‘a gifting circle’ and insisting that the payment is not taxable or illegal because it’s only a gift. Participants are advised to use false names and to keep the gifted money in cash form, to avoid drawing suspicion from financial institutions.
The sad truth is that pyramid schemes always fall apart and the people at the bottom- your friends and family- lose their money.
You might be reluctant to talk to police because your friends are involved or you feel ashamed but the RCMP need your help to spread the word and prevent more people from being victimized.
People should understand that, not only could they suffer a personal financial loss for their involvement in gifting circle or similar pyramid schemes, but they could face tax implications through the Canada Revenue Agency, and/or criminal charges.
Additional information about pyramid schemes and how to avoid them, can be found at Canadian Anti-Fraud Centre, toll free at 1-888-495-8501 or the federal Competition Bureau toll free at 1-800-348-5358.
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