"Gifting Tables" Pyramid Scheme Indictment

[Number Six]

http://www.justice.gov/usao/ct/Press2012/20120502.html

“The indictment alleges that the three defendants ran a pyramid scheme designed to enrich themselves at the expense of other participants,” said U.S. Attorney Fein. “In addition, the indictment alleges that the defendants tried to use the pretext of ‘Gifting Tables’ as a way to avoid paying taxes on the substantial illegal proceeds of their scheme. The investigation into this scheme and others like it in Connecticut is ongoing and will remain an important priority for my office and IRS Criminal Investigation.”

In June 2009, Bello allegedly sent an email that said “I am not a . . . saint . . . . I’m teaching you all how to make an extra 80 grand a year . . . . Isn’t that enough?”

In October 2009, Hopkins allegedly emailed Platt and Bello advising that “we need to keep silent and under the radar.”

Later in October 2009, Bello allegedly emailed a participant and indicated “as women we like our own stash. Keep it in a safe. Keep it quiet because rather not have red flags raised. Hiring accountants and atterneys [sic] is costly.”

[Number Six]

http://www.justice.gov/usao/ct/Press2012/20121218.html

One of the insiders in this scheme has pled guilty to the tax charge.

"The investigation further revealed that in an email to a participant on January 17, 2009, HOPKINS stated “My goal was to come up with 80k GREEN BEANS this year. It is going to happen, it could also be 120k, who knows. This is awesome!”

"In an email on October 2, 2009, HOPKINS asked her co-conspirators “Are you worried that this will blow up like it did in Naples? We need to keep silent and under the radar.” The investigation has revealed that HOPKINS and others also participated in a Gifting Tables scheme in Naples, Fla., and that it had been detected by Florida law enforcement."

[GlimDropper]

I found a well written blog post by Juliana Gribbins, a woman who was invited to join this scam but had the good sense not to. I think the following gives a little of the flavor of the piece:

We’re also told not to park in the driveway of the house. That way the police who “unfairly” crack down on this type of thing won’t know which house is “hosting” the “party.” As we pull up to the curb, I feel less guilty and nervous about imbibing champagne before I’ve arrived than I do about going to this house. There has to be something illegal about all of this if they won’t let anyone park in the driveway. Like really, actually illegal.

Two women with toothy smiles greet us at the door. “Hiiiiiiiii! You’re new!” they say.

Um. Yeah. And a little sauced on champagne, thank you.

“Come in! Come in!” The women introduce themselves and I really so seriously want to give a fake name like I’d give to a drunk man at a bar who tells me he likes my eyes when really he’s staring at my chest and has been doing so all night long.

[Link]

[The Observer]

BNA Tax Daily is reporting that Bello and Platt were found guilty by a jury on 2/20/2013 after deliberations of 2 hours:

The federal government charged that the women ran a pyramid scheme designed to enrich themselves at the expense of other participants and that the defendants tried to use the pretext of “gifting tables” as a way to avoid paying taxes on the illegal proceeds of their scheme.

Prosecutors presented evidence during the trial that indicated that Bello and Platt conspired to defraud IRS by misrepresenting to recruits and participants that monies given and received during the scheme were legally considered tax-free “gifts” under the IRS code and that lawyers and accountants had approved Gifting Tables as legal ventures that generated tax-free proceeds. In addition, Bello and Platt filed false tax returns that failed to report income generated from the scheme, according to the U.S. attorney's office for the District of Connecticut.

[wserra]

After a couple of adjournments, Bello and Platt are now scheduled for sentence this Tuesday, August 13, 2013. According to the govt, the guideline is 11-14 years. While the Guidelines don't bind the Court, and the Court may sustain defense objections to certain guideline calculations in any event, it is clear they are both facing a very substantial sentence. The case carries a couple of lessons.

First of all, of course, cash gifting is not the innocuous activity that its pimps portray it to be. It's a federal (and state) felony. If you read the ponzi pimp boards - TalkGold and MoneyMakerGroup come to mind - cash gifting is just a harmless amusement, indulged in by people who fully understand it. Bello and especially Platt (who's older) may die in jail because of it. Tell them it was just harmless amusement. Yes, they made it worse by telling their "members" to file false tax returns - and, of course, doing it themselves - but a jury decided that their "Gifting Table" activities alone constituted mail and wire fraud.

Second, the "Gifting Table" manual contains all of the usual pimp reasons why it's OK to commit fraud. To wit:

• It's only a group of like-minded people supporting each other (p 3).
• It's legal because anyone can gift anyone else up to $12K/year with no tax consequences (p 4).
• Happy NewAge horseshit:

  Giving, supporting and nurturing are qualities expressed through the Divine Feminine and are part of our true nature . . . there is a powerful invisible force for good operating in the Universe. The Women's Gifting Table is a lifeline to that force.

  P 5.
• An entire section on the tax treatment of gifts, including a comparison of the Women's Gifting Table to "churches, charities and ... the Red Cross". P 7. Short, obvious answer: you're not a charity, and what your members give is not what the law considers a gift.
• A claim that they have been reviewed "MANY times by MANY lawyers and accountants", all of whom said they were fine. P 8. Nonsense, of course.

And more.

So, if anyone you care about starts with the cash gifting line, show him/her the govt's sentencing memo, and ask if the description of the Women's Gifting Table it contains sounds anything like what s/he is considering joining. Show the manual linked to above, and asked if it looks familiar. Finally, bring out the Women's Gifting Table verdict sheet, with its unbroken string of "Guilty" to federal felonies. If this doesn't work - well, you've done what you can.

I'll followup with the sentences unless someone else beats me to it.

[Number Six]

I will be interested to see what sentence the orchestrators of this fraud actually get. Lynn Meredith was also making a ridiculous argument after she was raided the first time that because all of the leading members of her "team" were female as well as the judge presiding over the case, things looked very good for her getting damages for the indignity of the raid, etc.. And you know how that turned out. I think she ended up blaming the 9/11 event as to why the case turned against her.

[wserra]

According to the Hartford Courant, Bello got 6 years, Platt 4.5. No parole on federal sentences, just 53 days/yr of good time. So, assuming they don't lose good time, Bello will serve about 5 years, Platt about 3.75. Both will surrender to begin the sentences on October 15.

Especially for people of their age (Bello is 57, Platt 65), not a slap on the wrist.

[Number Six]

More details in the US attorney press release: http://www.justice.gov/usao/ct/Press201 ... 813-1.html

They have been bad, bad girls and now have quite a bit of quiet time ahead of them to think about all those, according to this article, 1000 other women who were sucked in and went into debt to try the crapshoot of this scheme/scam: http://www.newstimes.com/default/articl ... 728432.php

[Lambkin]

http://www.ctlawtribune.com/PubArticleC ... 2615702541

Sixty-eight-year-old Bettejane Hopkins of Essex was sentenced Wednesday in federal court in Hartford to three years' probation. She also was ordered her to perform 300 hours of community service.