MORRISON ORDERS ILLEGAL PYRAMID SCHEME TO SHUT DOWN
Utah-Based Organization Operating in Montana Receives Order to Cease and Desist
Helena, Mont., Dec. 5, 2005 - Montana State Auditor John Morrison issued a cease and desist order last week against a Utah-based "charity", deceptively named "End Child Hunger". In the action against End Child Hunger Inc. and its president Tyson Williams, the Securities Department of the State Auditor's Office claims that the organization is an illegal pyramid scheme. At least 52 Montana participants are known to be involved in the program
"Illegal pyramid schemes hurt everyone involved," Morrison said. "The donated or gifted money from new investors is merely 'recycled' to existing participants. The pyramid scheme depends on ever-increasing recruitment. All pyramid programs will collapse as the pool of people available for recruitment dries up. People almost never get their initial money back, let alone make a profit."
The Department alleges that despite claims found on the End Child Hunger website that their mission is to "bring an end to the suffering of millions of the world's children," the donations people make to this pyramid program are distributed as compensation to other participants in the program. The company pays people to recruit others to donate money to the program. A participant is compensated according to the amount of donations that they solicit. The Department alleges the donations are really income for the company to pay participants and are not being used to feed starving children. The Department also alleges that End Child Hunger entices people to become involved in the pyramid scheme with the offer of a personal "Virtual Business Center" for the fee of $49.95. The "Virtual Business Centers" are allegedly used for recruiting other participants/donors.
Along with the cease and desist order the State Auditor's Office is seeking fines against both End Child Hunger and Tyson Williams. Persons found in violation of the Montana law that prohibits pyramid promotional schemes face administrative penalties of up to $10,000 per violation. This can include anyone who recruits others to participate in the "program".
"This is the worst kind of scheme because hard-working Montanans thought their money was going to a good cause. We will hold the perpetrators accountable for this unethical and illegal activity," says Morrison.
If you or someone you know has any information regarding this scheme or another potential fraud, please call Gene Hermanson at the State Auditor's office at 1-800-332-6148.