Illegal Pyramid Scheme Targeted At MD Deaf People
Since the end of October, the state has received 15 inquiries regarding a pyramid scheme targeted at deaf people. A Canadian company is soliciting residents to sell diamonds, says Kevin Enright, a spokesman for the Maryland attorney general’s office.
Pyramid schemes — mock businesses that earn money primarily from recruiting members and charging them fees rather than by selling products or services — are illegal in Maryland.
“Many people promote pyramid schemes out of ignorance and do not realize they are engaging in illegal and harmful behavior,†Attorney General J. Joseph Curran says in a news release.
Some pyramid schemes offer a product or service to disguise their true nature. The product or service may be overpriced or have a questionable value, like exotic vitamins, health tonics and gemstones of uncertain origins, a state news release says.
The state released a new investor-education brochure with tips to identifying pyramid schemes that make be masked under the name multilevel marketing plans.
The brochure is available at www.oag.state.md.us.
http://washington.bizjournals.com/washington/stories/2006/11/13/daily8.html?jst=b_ln_hl
A follow up, 11/15/06:
I’ve received five claims in my comment section. I’m not printing them now as I am unable to verify the legitimacy of this CDT organizaiton. So I have forwarded these claims to the appropriate state agency (securities@oag.state.md.us). When I receive a response from the state, I will follow up on these claims.  Until then, I will not print any claims on the legitimacy of this company. Elizabeth
Since the end of October, the state has received 15 inquiries regarding a pyramid scheme targeted at deaf people. A Canadian company is soliciting residents to sell diamonds, says Kevin Enright, a spokesman for the Maryland attorney general’s office.
Pyramid schemes — mock businesses that earn money primarily from recruiting members and charging them fees rather than by selling products or services — are illegal in Maryland.
“Many people promote pyramid schemes out of ignorance and do not realize they are engaging in illegal and harmful behavior,†Attorney General J. Joseph Curran says in a news release.
Some pyramid schemes offer a product or service to disguise their true nature. The product or service may be overpriced or have a questionable value, like exotic vitamins, health tonics and gemstones of uncertain origins, a state news release says.
The state released a new investor-education brochure with tips to identifying pyramid schemes that make be masked under the name multilevel marketing plans.
The brochure is available at www.oag.state.md.us.
http://washington.bizjournals.com/washington/stories/2006/11/13/daily8.html?jst=b_ln_hl
A follow up, 11/15/06:
I’ve received five claims in my comment section. I’m not printing them now as I am unable to verify the legitimacy of this CDT organizaiton. So I have forwarded these claims to the appropriate state agency (securities@oag.state.md.us). When I receive a response from the state, I will follow up on these claims.  Until then, I will not print any claims on the legitimacy of this company. Elizabeth
December 22nd, 2006 at 10:18 am
For your information, please read the link that indicates what FTC has as shown below:
Watch Out For Pyramids
Steer clear of multilevel marketing plans that pay commissions for recruiting new distributors. They’re actually illegal pyramid schemes.
Why is pyramiding dangerous? Because plans that pay commissions for recruiting new distributors inevitably collapse when no new distributors can be recruited. And when a plan collapses, most people-except perhaps those at the very top of the pyramid-end up empty-handed.
The above information can be found at http://www.ftc.gov/bcp/conline/pubs/alerts/lotionalrt.htm
December 22nd, 2006 at 10:50 am
FTC has information on what the multilevel marketing plans are. Those shown below can be found in http://www.ftc.gov/bcp/conline/pubs/invest/mlm.htm. Please read the FTC homepage regarding the information.
See the inscribed comments as shown below.
If a plan offers to pay commissions for recruiting new distributors, watch out! Most states outlaw this practice, which is known as “pyramiding.” State laws against pyramiding say that a multilevel marketing plan should only pay commissions for retail sales of goods or services, not for recruiting new distributors.
Why is pyramiding prohibited? Because plans that pay commissions for recruiting new distributors inevitably collapse when no new distributors can be recruited. And when a plan collapses, most people — except perhaps those at the very top of the pyramid — lose their money.