Could a chain letter that involves sending money be considered illegal?
Full Question:
I have recently come across an opportunity where there are a list of four email addresses. You send five dollars each to the person at the bottom of the list and to the person at the top of the
list. Then you replace the email address at the bottom of the list with your email address. The person on the bottom of the list is supposed to get 20 people to sign up for the program and follow the exact same process. You never have to give more than $10.00. You collect five
dollars if you are the person on the bottom of the list and five dollars when you become the person on the top of the list. You only have to sign up two people to break even. There are claims that this same program was featured on Oprah. I believe the program is called the 'Guardian' system. Since this involves such a small amount of money and only the bottom
person and the top person get paid,could this be considered illegal?
05/05/2009 |
Category: Debts and Credit |
State: Florida |
#16583
Answer:
This may be considered a prohibited chain letter or pyramid scheme. A pyramid scheme is a fraudulent system of making money which requires an endless stream of recruits for success.
Recruits
(a) give money to recruiters and
(b) enlist fresh recruits to give them money.
These schemes are characterized by the promise of sky-high returns in a
short period of time for doing nothing other than handing over your
money and getting others to do the same.
The following are Florida statutes:
849.091 Chain letters, pyramid clubs, etc., declared a lottery;
prohibited; penalties. —
(1) The organization of any chain letter club, pyramid club, or other
group organized or brought together under any plan or device whereby
fees or dues or anything of material value to be paid or given by
members thereof are to be paid or given to any other member thereof,
which plan or device includes any provision for the increase in such
membership through a chain process of new members securing other new
members and thereby advancing themselves in the group to a position
where such members in turn receive fees, dues, or things of material
value from other members, is hereby declared to be a lottery, and
whoever shall participate in any such lottery by becoming a member of,
or affiliating with, any such group or organization or who shall solicit
any person for membership or affiliation in any such group or
organization commits a misdemeanor of the first degree, punishable as
provided in s. 775.082
(2) A "pyramid sales scheme," which is any sales or marketing plan or
operation whereby a person pays a consideration of any kind, or makes an
investment of any kind, in excess of $100 and acquires the opportunity
to receive a benefit or thing of value which is not primarily contingent
on the volume or quantity of goods, services, or other property sold in
bona fide sales to consumers, and which is related to the inducement of
additional persons, by himself or herself or others, regardless of
number, to participate in the same sales or marketing plan or operation,
is hereby declared to be a lottery, and whoever shall participate in any
such lottery by becoming a member of or affiliating with, any such group
or organization or who shall solicit any person for membership or
affiliation in any such group or organization commits a misdemeanor of
the first degree, punishable as provided in s. 775.082
For purposes of this subsection, the term
"consideration" and the term "investment" do not include the purchase of
goods or services furnished at cost for use in making sales, but not for
resale, or time and effort spent in the pursuit of sales or recruiting
activities.
