ILLEGAL PYRAMIDS IN MAINE
January 17, 2001
JANUARY 17, 2001
CONTACT: James Mckenna, Assistant Attorney General
207-626-8800
The Department of the Attorney General announced today that it has filed
in Kennebec Superior Court an Unfair Trade Practice action against participants
in the "Changing Lives" pyramid who initially refused to return money
illegally obtained through the pyramid.
This pyramid scheme operated mainly in the Lewiston and South Paris areas
and required each new recruit to contribute $2000 and to then recruit
eight new members. The organizers used a high school analogy to describe
the pyramid, telling new recruits that for $2,000 they could enter the
pyramid as a "Freshman." They were then required to help recruit eight
new members who would also contribute $2,000. They were promised that
eventually, they could rise to the status of "Senior" and receive $16,000.
"Changing Lives is a direct violation of our anti-pyramid statute and
has resulted in numerous recruits losing their money," said Assistant
Attorney General James McKenna, the Assistant Attorney General who is
handling the case for the State. "Our Superior Court Complaint has 39
individual defendants. We are determined to bring this matter to trial
and obtain Orders requiring these people to pay back all monies and to
pay a civil penalty to the State."
"The unavoidable fact is that a great majority of the people who are
recruited into pyramid schemes lose all their money," said Attorney General
G. Steven Rowe. "This is why Maine has declared pyramids illegal."
Rowe warned that other pyramids are currently operating in the State
of Maine. The most prominent one that the Attorney General has received
reports about is titled, variously, "Women Helping Women" or "The Women's
Project" or "The Dinner Party." This pyramid scheme is now operating across
Maine, from Machias to Portland, and recruits only women, who are required
to find seven or eight recruits who will each contribute $5000. Women
are recruited at dinner parties, warned not to tell their husbands, and
promised that when they reach the "dessert" stage of the pyramid they
will receive $35,000.
The Attorney General warned against participating in any pyramids. "Such
pyramid schemes always have a simple sales pitch. They tell you it is
legal and that you will receive a lot of money. In fact, the opposite
is true: it is most certainly illegal and the great majority of people
lose all their investment." In order to comply with the law, the Attorney
General recommends that all pyramid participants immediately return any
money they may have accepted from recruits to the pyramid.
