Attorney General's News Release

May 2, 2000

Nixon warns Missourians about pyramid schemes disguised as "gifting" or "empowerment" networks

Jefferson City, Mo. — Missouri Attorney General Jay Nixon today warned consumers to beware of schemes that promise easy money based on a premise of "gift giving." Such schemes, Nixon said, are often illegal pyramids.

A pyramid scheme is any situation where the primary way of making money or commissions is by getting others involved in the organization. Nixon said his office has received reports from the Kansas City area of a current scheme that involves the giving of cash "gifts" and relies completely on the recruitment of more participants as the way of making money.

"The names may change, but the scam is the same," Nixon said. "Pyramid schemes are illegal, regardless of the form they take. Consumers should steer clear of any scheme in which they do not make money unless they recruit others to participate in the scheme."

Nixon said his office has received complaints about an organization called the Women's Empowerment Network, also known as The Breakfast Club. Information from the organization claims that the FBI has declared the scheme to be "perfectly legal."

"Operators often claim they are not running a pyramid and claim to be endorsed by officials from federal or state governments. Nothing could be further from the truth," Nixon said. "Investors quickly find they can no longer recruit more participants. The pyramid then collapses, leaving most participants with little, if any, chance of recouping their money."

Nixon said that under Missouri law, those who operate pyramids may be subject to civil liabilities, including injunctions, restitution and monetary penalties and to potential criminal charges. He encouraged anyone with information about the reported "gift-giving" pyramid schemes operating in the Kansas City area or any other pyramid scheme to call the Attorney General's Consumer Protection Hotline at 1-800-392-8222.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818