Ridge Meadows RCMP is issuing a public warning about a new economic scam called gifting or a gifting pyramid.
The gifting pyramid scheme targets law-abiding citizens who are convinced to recruit friends, family and acquaintances into the group, according to the RCMP.
New group members have to pay their recruiter a fee or “gift” to join and are expected to recruit eight new members who also provide a buy-in fee. Sometimes these buy-in fees are as high as $5,000 with a false promise of a $40,000 pay out. Recruiters try to legitimize the buy-in by calling it a gift and insist that the payment is not taxable or illegal because it is only a gift.
“Many participants may not be aware that this is in fact illegal, said Ridge Meadows RCMP Inspector Aaron Paradis. “The very nature of a pyramid scheme is that eventually it will run out of resources. Pyramid schemes always fall apart and the people at the bottom never get their money back. People tend to earnestly get involved but they have no idea they are breaking the law”.
Paradis said they find people will not come forward in these circumstances because they may be embarrassed or ashamed due to involving friends and family.
“We are releasing this public awareness bulletin in the hopes of preventing further victimization,” he said
Anyone with information about a pyramid gifting scheme should contact your local police, said Paradis. He said you can call the Ridge Meadows RCMP non-emergency line at 604-463-6251.
