Kauai prosecutor warning about pyramid scheme

Published On: Feb 18 2014 02:38:46 PM HST   Updated On: Feb 18 2014 03:06:22 PM HST
LIHUE, Hawaii -

Kauai Prosecuting Attorney Justin F. Kollar cautioned the public on Tuesday concerning a pyramid scheme known as "Women's Gifting Circles" or "Women Empowering Women Circles."

While not a new phenomenon in Hawaii, the schemes appear to be enjoying a resurgence in recent months, according to the prosecutor.

"These schemes are marketed as a way to entice women through a tiered investment model, often using language that speaks in terms of 'empowering' women spiritually or financially," said Kollar.  "The people at the top of the pyramid collect money from those at the bottom of the pyramid, plain and simple. The people at the bottom are promised future rewards that are based on recruiting additional followers to start new circles. These schemes are illegal and are designed by predators to extract money from people who trust them."

In many cases, women who are being recruited are told not to talk about the circle for various reasons, or are told that the practices are legal as long as the dollar amounts are under a certain threshold.  However, violators can be subject to criminal and civil penalties under State securities laws.

"As far back as 2001, the State has been warning people that these schemes are illegal, but every few years they seem to come back around," added Kollar. "We've been hearing reports from as far away as the Big Island that these situations are still happening. Once a person has given up their money to join one of these pyramids, it’s very difficult, if not impossible, to get it back. The bottom line is that we want to stop people from becoming victims.”

Anyone with information on gifting circles on Kauai can contact the Office of the Prosecuting Attorney at 241-1888 or via email at prosecutor@kauai.gov.


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