Two Arrested For ``Gifting'' Clubs
Thursday, July 27th 2000, 12:00 am
By: News On 6
DALLAS (AP) â€” It sounds innocuous enough: a women's club that costs $5,000 to join, where members mingle and exchange cash gifts in restaurants and homes.
The best part? The promise of a return on their initial investment to the tune of $40,000.
Some participants, however, have found that the pay off isn't quite so sweet. Two women were arrested Tuesday for partaking in the so-called ``gifting'' scheme, which is illegal under Texas law.
Princeton police said Shannon Ford, 29, and Judy Gipson, 52, both of Princeton, were arrested after Ford refused to return a $5,000 investment she gave Gipson.
They were charged with a felony count of promoting an illegal pyramid scheme.
Police said new club members paid $5,000 to join. They then became eligible to receive money from the next eight participants, reaping a potential windfall of $40,000 during planned dinner meetings.
Similar clubs have cropped up elsewhere in the United States.
In March, Washington State Attorney General Christine Gregoire sued 13 promoters of a gifting club, accusing them of operating an illegal pyramid scheme called the Renewal Celebration.
Last week, several male and female police officers in Auburn, Maine, were suspended or forced to resign after spending $2,000 to join the local ``Changing Lives'' pyramid scheme.
In Arlington, Texas, southwest of Dallas, the problem reached its height in March, when local police were bombarded with dozens of calls.
``We had so many complaints about it. It became really so widespread it became the talk of the town,'' police spokesman Dee Anderson said Wednesday.
Authorities eventually teamed up with the Better Business Bureau and held a news conference warning women of the clubs. No arrests were made.
Arlington resident Denyse Lindquist borrowed $5,000 from a bank in March to join one such club, but never saw a penny of it again.
``The only thing I did was put money into it, and I really regret it. ... The whole thing really sounded true at the time,'' said Lindquist, a single mother.
Anderson said savvy marketing on behalf of club organizers often proves alluring in desperate financial times.
``They're very good, they're very polished. They're con artists on a different level,'' Anderson said.