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.