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Arrests in pyramid scheme

Mission RCMP have busted what they are calling a fraudulent gifting scheme.

Four people have been arrested in connection with the scheme that could involve thousands of people across the Lower Mainland.

The gifting circles or clouds, as they are known, recruit new participants who are asked to bring in two additional people. Once a new group of eight people is created, the new recruits are asked to contribute a $5,000 gift to the person at the top of the pyramid.

Police say the cash gift is known as a “birthday spot,” and participants are advised to use fake names to avoid suspicion from banks.

“There are virtually no winners in this type of pyramid scheme,” said inspector Annette Fellner. “People who are involved in this kind of fraud are imaginative. They sound convincing and say the right thing to make you believe it’s perfectly legal when it isn’t.”

According to police, the fraudsters use an app called Telegram Messenger to communicate.

Police are warning the public that those involved in these schemes could face financial loss, tax implications and criminal charges.

-with files from CTV



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