Cash Gifting Mlm
- Feb . 7 . 2009 | admin in category: Uncategorized |
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Are ALL Pay It Forward Cash Gifting Programs The Same as Described on Ponzi-Pyramid-Scams.com ?
I know gifting is legal, and I know pyramids are not, so why are so many promoting this as ethical and legal while others seem to say it is not? As long as a person is fully informed no cash gifts are guaranteed in return, and you gift someone accordingly, and you sign documents with this understanding, so why would it be illegal?
Seems to be a gray area from what I have researched. Of course, all gifts have to be reported on your 1040 tax returns, as we all know avoiding taxes is illegal. I read legal description of Ponzi pyramid scams by MLM lawyer on Ponzi-Pyramid-Scams.com and am looking for answers as gifting does not seem to fit the typical description.
1. The “gifting statement” contracts are themselves illegal, as no donative intent is evidenced (see http://www.vid.uscourts.gov/territorial/06sc0016.pdf for the judge’s wording, much clearer than mine is).
2. “Cash gifting” is, by official definition, a pyramid scheme. See http://www.mason.mi.us/police/101708-CashGiftingSchemes.pdf
3. In addition to taxes, you face securities fraud charges. See the Supreme Court rulings Lucas v Alexander (for why no cash gifting program can possibly be a non-profit charity – the profit motive), and Nebraska v Irons (for the selling of unregistered securities).
4. Every single state of the United States has their own laws banning the practice, in addition to the Federal laws. Colorado’s are particularly harsh, with serious consequences kicking in once you receive $50 (itself a consequence of the economic damage the state suffered in 1935 when a 10 cent gifting program almost destroyed them).
5. In addition to the financial issues (taxation and securities), there are wire fraud laws such as 18 USC 1343 that can very easily send you to prison for false and misleading advertising. Attempting cash gifting by mail hits 39 USC 3005 squarely, just like postal chain letters do (lottery materials may not be sent through the mails), and as the folks from Biblical Seven found out earlier this year, Fed-Ex and DHL and the rest of the common parcel carriers are bound by the same laws as the USPS.
6. Then there’s the interstate commerce laws. I’d suggest the editorial page at http://www.vnn.org/editorials/ET0008/ET15-6156.html where that gets explained quite nicely.
7. And if you really want to get an earful of the legalities that cash gifting breaks, review the flame war from http://www.scam.com/showthread.php?t=40980 that resulted in an FBI raid on a gifting program’s headquarters.
