Attorney General's News Release

July 13, 2000

Nixon warns St. Louis area residents about "gifting" or "empowerment" pyramid schemes moving into area

Jefferson City, Mo. — Attorney General Jay Nixon today warned St. Louis area residents to beware of schemes that promise easy money based on a premise of "gift giving." The schemes rely on the recruitment of participants to make money and are illegal pyramids, Nixon said, adding that those who recruit others to participate in pyramids can face criminal charges and civil penalties.

Nixon said his office recently received several reports from the St. Louis area of one such scheme called the Women's Empowerment Network, or (WEN). It is also known as the Dinner Party, the Original Dinner Party, the Breakfast Club or Prosperity 4u2. Nixon obtained an injunction last month against several people in the Kansas City area associated with WEN, prohibiting them from further participation and freezing any assets they gained through the scheme.

Nixon said that WEN and the other schemes are often in the form of the courses of a dinner party, with participants who enter at the lowest level (sometimes referred to as the "appetizer" or "soup & salad" level) paying $5,000 to the person at the top, or "dessert," level. Entry-level participants move up through the pyramid as more participants are recruited.

"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 others are recruited to participate in the scheme."

Information from organizers 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 participate in 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 or any other pyramid scheme to call the Attorney General's Consumer Protection Hotline at 1-800-392-8222.

Learn more about illegal pyramid schemes

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