By CHAT News Today

Police warn residents of Gifting Circle pyramid scheme

Dec 22, 2017 | 9:03 AM

MEDICINE HAT, AB — The Medicine Hat Police Service is warning the public about a pyramid scheme which they say is operating in the city.

According to police, the Gifting Circle is a pyramid scheme that has been reported in several cities across Western Canada.

The scheme sees a recruiter asking eight victims to pay a gift of $5,000 each to the recruiter. The victims are then asked to recruit another eight people to pay $5,000, with everyone in theory making $40,000 if the pyramid continues.

Police say in reality, the model collapses after the first level, as the initial recruiter leaves with the $40,000 and then goes to another city or territory to defraud another eight victims.

Due to the lack of a legitimate product or service, the Gifting Circle is considered a pyramid scheme. In Canada, it is illegal to promote a pyramid scheme, and it is also illegal to profit in any way by deceit, falsehood or any other fraudulent means.

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The Gifting Circle is presented as legal, which police say should raise a warning sign. Officers are also reminding residents to be wary of easy money or get-rich-quick ventures.

Anyone with questions or concerns is asked to contact the Major Crimes Section of the Medicine Hat Police Service at 403-529-8420.