April 30, 2002

APRIL 30, 2002

CONTACT: JAMES McKENNA, Assistant Attorney General 207-626-8800

Attorney General Steven Rowe announced that his office has filed a lawsuit against the pyramid scheme known as A Woman's Project. The suit was filed in Superior Court in Kennebec County and names 31 defendants who have refused to return the $5,000 they solicited from new recruits to the pyramid scheme.

"Numerous women, often in great need of money, were attracted by an illusory promise that they could quickly obtain $40,000," said Attorney General Rowe. "But A Woman's Project is like all other pyramids, and it is doomed to fail."

A Woman's Project uses a dinner party analogy to explain to recruits how its fund-raising scheme works. Each new recruit typically gives $5,000 and is then placed at the "Appetizer" level of the "Dinner Table." When eight new recruits have been persuaded to join A Woman's Project, they each give $5,000 to a participant who has reached the "Dessert" level, the highest position at the "Dinner Table." As the new recruits work their way up the hierarchy, they move from "Appetizer" to "Soup and Salad" to "Entrée" and, finally, "Dessert." Recruits are led to believe that the pyramid can continue ad infinitum, even though mathematically it is certain to fail. See the attached description of A Woman's Project pyramid.

The Attorney General is seeking to recover money for 41 persons who were lured into contributing $5,000 to A Woman's Project. "Pyramid schemes such as A Woman's Project sow great discord in communities," said Attorney General Rowe. "People in need of money will recruit their friends and neighbors and relatives with the result that many people will lose their money and become embittered. Pyramids are against the law and we are going to try to stop them whenever we can."

The Attorney General's Office is also aware that alumni of A Woman's Project have apparently started a new fund-raising scheme called Ophelia or Stepping Stone. Assistant Attorney General James McKenna said, "The new schemes attempt to distinguish themselves from garden variety pyramid schemes, but those attempts fall short of the mark. Anyone who is asked to participate in any kind of 'gifting club' should report that to me at 626-8800."

A federal court previously dismissed a case filed by A Woman's Project organizers against the Attorney General and Maine's eight District Attorneys alleging that the prosecutors' public warnings against participating in illegal pyramids were chilling participation in A Woman's Project. The court ruled that the prosecutors were well within their power to warn the public about suspected illegal scams.

Two years ago, the Attorney General sued several participants of a similar pyramid scheme called Changing Lives. A trial is forthcoming against the defendants who have not settled in that case. The AG's office is currently involved in three suits against participants in a men-only pyramid scheme called NASCAR.