Five shoreline women involved in an alleged illegal pyramid scheme will forfeit tens of thousands dollars each as part of a voluntary agreement reached with the state Consumer Protection Agency, the agency announced Wednesday.
The women will hand over a total of $202,500 in restitution as part of their agreements. The individual agreements for all five women are attached to this article.
In a separate case, earlier this year three other shoreline women were arrested as part of the alleged scheme, after a federal grand jury returned an 18-count indictment charging them with .
The suspects allegedly were the ring leaders of a so-called “gifting table” club where new members would pay $5,000 to join for an eventual payout of $40,000.
The individuals who have entered into an Assurance of Voluntary Compliance with the state are:
- Patricia MacKenzie of Essex, who will forfeit $45,000.
- Elizabeth Culligan of East Haven, who will forfeit $40,000.
- Terrell Naumann of Branford, who will forfeit $20,000.
- Sally Stedman of Guilford, who will forfeit $65,000.
- Felicia Zaffin of Branford, who will forfeit $32,500.
The individuals have also agreed that they will not participate in any gifting tables or other pyramid schemes, and that they will cooperate with the state’s investigation. The forfeited funds will be deposited into the state’s General Fund.
“As with any pyramid scheme, these gifting tables are inherently deceptive,” Attorney General George Jepsen said. “Representations are made about a potential for large sums of money that, as recruitment stalls, are unattainable. People lose thousands of dollars believing they will receive a windfall return that never materializes."
He added that consumers should be aware that state and federal law prohibits "these kinds of schemes," and any offer involving upfront money payments with "promises of big profits that depend on recruiting others should be considered suspect.”
require every recruit to perpetrate the scam on the next victim, and thereby commit fraud themselves," he said.
“These pyramid schemes resurface every few years in different forms, but they are always illegal,” state Consumer Protection Commissioner Rubenstein said. “Anytime you are not selling a product or service, but have to recruit new members into the scheme in order to get paid, it is an illegal pyramid."
Rubenstein said "simple math dictates" that within a very short period of time, the number of new recruits who are needed in the scheme will outstrip the entire population of Connecticut, with nearly everyone but the original players losing everything.
"Beyond causing financial loss, these schemes are insidious because they
In this scheme, women are encouraged to join a small group known as a “table” in which they each provide a $5,000 gift to another woman in the group.
As new women join the group, others move up the pyramid into higher “positions” to eventually receive their own gifts totalling much more than their initial contribution.
When such schemes fail to recruit enough new members, the pyramid collapses, leaving the newest members with nothing.
Investigation 'Active and Ongoing'
Pyramid schemes are considered a violation of the Connecticut Unfair Trade Practices Act.
The voluntary compliance agreements resolve state civil claims only, and are not related to or resulting from any federal criminal matters.
The state’s investigation into Women’s Gifting Tables remains active and ongoing.
(Editor's Note: This post was edited at 8:45 p.m. on Wednesday to clarify the five shoreline women who reached an agreement with the state today are a separate from the group of three shoreline women indicted earlier this year.)