Have You Been Charged with Pyramid Schemes in Georgia?
The general public is very familiar with the concept of pyramid schemes. Most people think of Bernard Madoff who had one of the most successful pyramid schemes in history. He was arrested in 2008 after losing 50 billion of his investor's funds. However, many people are unaware of the illegality of these schemes or the consequences of being charged with participating in or promoting a scheme. There are many situations where there is a legitimate business plan that appears to model a pyramid scheme but in fact, are not. If you have been charged, you need a Georgia Pyramid Scheme Attorney to assist with your case.
What is a Pyramid Scheme?
In basic terms, a pyramid scheme is a form of investment where each paying participant recruits other participants, with money being given to the first people using money from the latter ones. The central premise is that participants only make money when they receipt other members.
The reason courts have ruled pyramid schemes illegal is that it is impossible for the cycle to sustain itself and ultimately, people will lose their money. Investopedia states that an estimated 90% of people who get involved in a pyramid scheme will lose their money.
Georgia Law on Pyramid Schemes O.C.G.A. §16-12-28 reads:
No person may establish, promote, operate, or participate in any pyramid promotional scheme.
The Penalty for Participating or Promoting Pyramid Schemes in Georgia
A person who participates in a pyramid scheme will be guilty of a misdemeanor of a high and aggravated nature if convicted.
If convicted of establishing, promoting, or operating a pyramid promotional scheme, the penalty is elevated to a felony. It will include a prison term of between one and five years. Additionally, having a felony conviction on your record can make it difficult to obtain housing, credit or employment. Call one of our experienced pyramid scheme lawyers in Georgia to talk about your case and try to avoid severe penalties.
Pyramid Scheme Defenses in Georgia
It was a legitimate business: This statute does not prohibit companies from giving consideration in return for the right to receive compensation based on purchases of goods, services, or other property so long as the plan does not promote or induce inventory loading.
I was a participant rather than a promoter: Even though this doesn't seem like a defense, there is a great benefit for you to be convicted of a misdemeanor rather than a felony. If this applies in your case, contact our Georgia Pyramid Scheme Attorneys today.
I was unaware that it was a pyramid scheme: While the statute does not address that the involvement must be intentional, the Court may be reluctant to accept this defense. However, a pyramid scheme lawyer in Georgia would be able to help develop this argument and present evidence showing that the participation was accidental.
What are Not Defenses
There was a limit as to how many people could participate: Under the statute, this limitation does not alter the fact that it is still a pyramid scheme.
The participants received goods: It is not a defense that the contributors receive things such as goods, services, or other consideration in addition to their commission.
One of the most common illegal pyramid schemes is what is referred to as a "gifting circle." People argue that since the purpose is to "gift money" it is, therefore, a legal act. The argument is specious and without any merit. For further information on gifting circles, we have provided an article, "Gifting Circles are illegal in Georgia."
A conviction for participating, promoting, or operating a pyramid scheme in Georgia will have lasting consequences. Your best option is to contact a Georgia Pyramid Scheme lawyer from the very beginning. Our Georgia Criminal Defense Attorneys are here 24 hours a day, seven days a week to answer your call. Contact us today and schedule a free consultation. Every second counts so don't delay!