Gifting Table Scam - A Four Level Pyramid Scheme
According to court documents, statements made in court and the evidence presented during a trial of her codefendants, a Gifting Table is configured as a four-level pyramid, with eight participants assigned to the bottom row, four participants assigned to the third row, two participants assigned to the second row, and one participant assigned to the top row.
The top row participant is referred to as the “Dessert,” the two participants on the second row as “Entrees,” the four participants on the third row as “Soup and Salads,” and the eight participants on the bottom row as “Appetizers.” To join a Gifting Table, new participants were required to pay $5,000, typically cash, to the Dessert, that is, the participant occupying the top position on the pyramid.
The $5,000 payment, which was fraudulently characterized as a gift, secured the new participant a position as an Appetizer on the bottom row. Participants progressed from the bottom row of the pyramid by recruiting additional people to join the Gifting Table. When eight new participants joined a Gifting Table, each having made a $5,000 “gift” to the person occupying the Dessert position at the top of the pyramid, the Dessert left the Gifting Table and kept the $40,000 paid by the eight new participants. That particular Gifting Table was then split, with the two participants occupying the Entree position on the second row moving to the top position (Dessert) of two new pyramids. The other incumbent members of the Gifting Table moved up a row on one of the two newly-formed pyramids, and the search for 16 new participants began. The success of the Gifting Tables depended on new participants joining and making the $5,000 “gift.”
From approximately 2008 to 2011, HOPKINS, Donna Bello and Jill Platt oversaw and profited from a Gifting Tables pyramid scheme operating primarily in Connecticut’s shoreline communities. The defendants recruited individuals to join the scheme, prepared and distributed materials to recruits that contained false representations, and affirmatively misrepresented to recruits and participants that Gifting Tables was not a pyramid scheme.
HOPKINS and her codefendants conspired to defraud the Internal Revenue Service by telling recruits and participants that monies given and received during the scheme were tax-free “gifts” under the IRS Code and that lawyers and accountants had approved Gifting Tables as legal ventures that generated tax-free proceeds. They also advised and counseled participants not to report on their tax returns monies received through their participation in the scheme, or deposit a large amount of cash into bank accounts, which would require the bank to report the sum to the IRS.
HOPKINS received at least $89,500 from her participation in the scheme, none of which was reported on her individual income tax return.
On December 18, 2012, HOPKINS pleaded guilty to one count of conspiracy to defraud the Internal Revenue Service.
On February 20, 2013, after a four-week trial, Bello and Platt were convicted of conspiracy to commit wire fraud and conspiracy to defraud the IRS, multiple counts of wire fraud, and filing false tax returns.
Bello was sentenced to 72 months of imprisonment and three years of supervised release, and Platt to 54 months of imprisonment and three years of supervised release. Bello also was ordered to pay a $15,000 fine.
HOPKINS, Bello and Platt were ordered to pay restitution in the amount of $32,000 to several victims of the scheme.
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