Woman charged in pyramid scheme

Last year, eight Sacramento-area women were charged in connection with a pyramid scheme also known as Women Helping Women. At the time, investigators said it operated more like Women Helping Themselves to Other Women's Money.

Saskatoon StarPhoenix
May 23, 2003

Woman charged in pyramid scheme

Saskatoon RCMP have completed their investigation into an alleged female-only pyramid scheme, resulting in charges against 14 city-area women.

Staff Sgt. Tim Jansen, of the Saskatoon RCMP commercial crime section, said the number of people charged in connection with the alleged scheme is significant.

"Pyramid schemes have been a continual problem in the province," Jansen said.

"Now, I'm not just referring to the one that's before the courts today, but there have been other pyramid schemes that have taken place in the province.

"There are pyramid schemes out there with different terms or labels, or whatever you want to attach to them," he said.

The women charged in connection with the alleged scheme hail from Saskatoon, Delisle, Harris, Martensville and Perdue.

They were charged with gaming-related offences under Section 206 of the Criminal Code, and appeared in court on Wednesday and Thursday.

According to the RCMP, the alleged scheme was known as Women Helping Women, Women's Gifting Club and Circle of Friends.

The alleged scheme consisted of four levels. Eight participants signed up on the bottom row and were required to pay, or share a payment, of $5,000 to the person on top.

The person at the top would receive $40,000, or eight times the money they paid into it, according to police.

But once the top person was paid out, the board split in two. Eight new squares were added to the bottom of each of the two new boards, and each participant moved up the board by recruiting other participants into the new positions.

An offence is committed when "an individual conducts, manages or is a party to a scheme where, upon payment of a sum of money, the payer receives or is entitled to receive a larger sum of money" because others pay into the scheme, police said.

A thank-you card was allegedly to be given with the cash in order to satisfy Canada Customs and Revenue Agency (CCRA) rules that the money was a gift, police said.

However, payments made into pyramid schemes are not gifts under the Income Tax Act. Failure to declare such income could result in a CCRA investigation.

According to police, most participants in a pyramid scheme will lose their investments in the end.

"Because the simple mathematics of it is, eventually the people at the bottom will lose," Jansen said.

"At some point in time, the scheme itself will collapse."

Jansen would not comment on how much money was invested in or lost to the alleged pyramid scheme.

"Appreciate that these matters are now before the courts," he said, adding that he did not want to discuss specific evidence.

He also declined comment on how long the scheme had allegedly been going on, but said that RCMP had been investigating it for "a lengthy time."

Last year, eight Sacramento-area women were charged in connection with a pyramid scheme also known as Women Helping Women. At the time, investigators said it operated more like Women Helping Themselves to Other Women's Money.

It's not the first time a Saskatoon woman has been charged in connection with a notorious money-raising scheme.

In 2002, a woman appeared in provincial court facing two counts of conducting an illegal gambling scheme. She was accused of taking $5,000 each from two women, and was allegedly connected to a scheme that goes by the name of Women Helping Women, The Muffin Club and The Recipe Club.

Participants in pyramid schemes can be prosecuted and fined even if they don't collect the promised cash.


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