Dec. 21, 2001
Contact: Lucas Hamilton
Single "gifting" program scams $1.4 million from Montana investors
State Auditor John Morrison is warning consumers of the dangers of pyramid schemes that promise investors a way to "get rich quick," if they first recruit additional investors.
"These programs quickly collapse under their own weight with the first 10 percent of investors making great profits at the expense of the last 90 percent who participate and lose everything," said Morrison, Montana's Securities Commissioner.
Pyramid schemes are fraudulent because nothing of value is purchased or sold when a person joins the program. The person's money is "recycled" and given to people who joined the program at an earlier time. Continuation of the program is dependent upon the recruitment of new participants. Eventually the pool of people available for recruitment disappears and the pyramid collapses. People on the pyramid's lower tiers lose all their money.
"The people organizing these programs expect to make a profit," Morrison said. "If you profit primarily through the recruitment of others into the program, you are in violation of state law, which explicitly outlaws pyramid schemes."
The Auditor's Office has investigated a number of pyramid schemes and has pending cases involving a type of pyramid scheme known as a "gifting" program.
It also has identified nearly 60 individuals and groups in Montana with more than $1.4 million invested in a "gifting" program called Greater Ministries International Church.
The program is receiving national attention because it sold unregistered securities throughout the United States and in foreign countries since 1988.
The organization and its affiliates primarily have sold a double-your-money-back investment program. Court documents allege that the program is an illegal investment contract that targets and preys upon fundamentalist Christians, promising that the funds invested in the plan will double as a result of the blessings of God. Court records indicate there may be as many as 15,000 to 20,000 victims worldwide.
Morrison announced Feb. 28 that individuals or groups involved in the program must file claims against the organization with the United States Bankruptcy Court by March 30, 2001.
"It is important to identify the victims quickly so they can recover their losses," Morrison said. "Innocent people trusted this organization and planned to use their profits to pay medical bills, college tuition and home mortgages."
The Greater Ministries program evolved and is known by several names including "Double-Your-Blessings," the "Greater Trust Gift Exchange" and the "Faith Promise." The various versions of the programs were administered by entities including Greater Trust, 1 John 4:4, Greater Ministries International of Grand Cayman and Ultimate Pension Fund.
Program representatives generally claimed that the funds invested by a prospective investor would double at a predetermined date if the investor successfully solicited two additional investors to invest the same amount of money or more in the program.
Representatives said the plan was a form of Christian social security, which would provide participants with a good living, according to court documents.
Greater Ministries claimed and touted investment activities including a gold and platinum mine in Nevada, thrift stores, real estate, precious metals, bank notes and debentures. It also told prospective investors in the Faith Promise Plan that their money would be used to conduct offshore trades of precious metals and foreign currency.
Anyone involved in the "gifting" program who has not received a letter from the State Auditor's Office, should contact the Securities Department at (800) 332-6148.
Individuals with questions or concerns about pyramid schemes should contact the office at the same number.
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