Pyramids, Ponzies and the Gifting programs… Why care?

Pyramids, Ponzies and the Gifting programs… Why care?

Many are the programs that come along and promise you a percentage paid daily, for a set period of time on the purchase of a “ad pack” or “position” that you purchase.

By legal definition this would be an investment program and come under the auspices of the FTC who regulates all investment companies, businesses and programs.  You will NOT find a single one of these operations like JSS which is FTC controlled or regulated.

The simple truth is that they are a Ponzi.  A Ponzi involves funds passing through a central point, company or set of hands and paying people with money from later joining members.

Here is how it works…

Person “A” joins and buys a position for a set amount, in this case $10 and is promised 2 percent per day return for 75 days.  Now first off JSS has that persons money to use for 50 days at no expense to themselves.  In order to pay the $0.20 to person “A” on the 51st day JSS will have to come up with the money from somewhere.

That somewhere is the money paid by person “B” when they buy a position.  JSS now has the funds to pay the full amount to person “A” on the 75th day BUT they will only have enough to pay person “B” for the first 25 days of their position.

Enter person “C” and the cycle continues.  When done by a master scammer this type of program can sometimes run for a few years building membership levels sky high and always paying the oldest positions with money coming in from the newer ones.

Why is this bad?  because at some point the scales will tip and there will not be enough money coming in to pay all that is owed.  This is also the point when there will always be a crisis of some sort so that payout needs to be temporarily delayed while funds continue to pour in.

When there is enough to satisfy the operator the whole program will simply vanish along with the money and everyone will lose all the money they had in the program.
It is because of the greed inherent in all humans that this is so damaging.

Yes things can be drawn out a bit by actually selling a product and distributing some of that money but make no mistake about it this is NOT revenue sharing!  No legitimate company can or will promise a guaranteed return on investment (which this is not)…

The reason is that profits can not be guaranteed in the future so shares can not be guaranteed either.  JSS even tells you on their web site that they are a PONZI and not a legitimate business…
QUOTE:-”JSS-Tripler is Indefinitely Sustainable!”-:END QUOTE

People through greed, need or even desperation put rent money, food money, college funds and other monies into these programs and lose it all in the blink of an eye.  If you had put just $10 in and lost it… no big deal right? Let me show you some math…

$10x 23,000 people is $230,000 … almost QUARTER OF A MILLION DOLLARS! which are being handed to the owners for free.  The shame is that many will put much more into this program and lose it all.

There will be a few who were in early enough and pulled their money out before it goes away that will see a profit but they are most certainly outnumbered by those who will lose.

On to the Pyramid scheme…

On top you have the President, below him The Senate then the Congress…
Is there something wrong here?  This is a pyramid with you and me at the bottom right?

Ok lets try this….

First there is the CEO then there are the VP’s followed by the board of directo…
What do you mean that can’t be a pyramid?  It is honestly, as is almost every other organized structure in the world up to and including religion!

The church? Yup.
Network marketing and MLM?  Yup.
Big companies like Ford or Horizon? Yup.
The mob?  Yup.
Aunt Lou’s hair salon?  If she has employees, you bet.
Even the family structure is all based on the same concept!

So where does the “scheme” part come in?

Well as far as I can determine, the schemes originated in Denver, Colorado, in
1934 or 1935 as the “Send-A-Dime Letter”. Long before the Internet was created.

“A pyramid scheme involves active recruitment and does not require a central administration, being defined in terms similar to that of a private lottery.”

The most recognizable form of them are the gifting programs that are prevalent all over these days.  Unlike their Ponzi counterparts they do not involve a limited number of individuals getting rich off the contribution of many.

Instead they rely on the generosity of human nature to redistribute wealth without the government getting a slice of the pie and it is primarily for this reason that they are illegal.

Send “X” amount of money to the name on the top of the list, add yours to the bottom of the list after removing the top name and send out copies to as many people as you can is the basic concept.

Many of these are called chain letters or gifting programs and they rely on the fact that most countries have a legal structure in place to allow gifts to be made and received legally. here in the USA it reads as follows….

QUOTE:-
United States IRS Tax Code, Title 26, Sections 2501-2504 and 2511, which states that:

An individual may give as a “cash gift” up to $12,000 USD total, to as many individuals as that individual desires within a calendar year. While these gifts are non-taxable, and need not be reported to the IRS, there are conditions. In order to be deemed non-taxable, the cash gift must be given without the expectation of receiving anything in return.”
-:END QUOTE
P.S. The limit is now $13,000

Personal observation here… it says “to be deemed non-taxable the cash gift must be given without the expectation of receiving anything in return.”  Personally I would then assume that if I made a gift “WITH an expectation of return” it would be taxable, but I am not a tax accountant nor a lawyer and therefore not at liberty to interpret the statement in any legal manner.

Everything said and done… it works, plain and simple. But because it is deemed illegal there is always the risk of it going away at any moment and nothing is gained in return. Honestly would YOU send $5 to a stranger without the expectation of gain or profit from it at some point?

If so, send me $5 now! :Þ

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