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Is Kindred Hearts Gifting a Scam?

Is Kindred Hearts Gifting a Scam?

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Gifting clubs are illegal pyramid schemes where new club members typically give cash “gifts” to the highest-ranking members. If you get more people to join, they promise you will rise to the highest level and receive a gift much larger than your original investment. But only a few people profit from this scheme and most people lose their investment.

Organizers keep creating new names for gifting clubs, such as “Friends Helping Friends,” “Women Empowering Women,” “Airplane,” and “Pit Stop,” but these clubs all work the same way and are all illegal. If someone asks you to join a gifting club, don’t fall for their high-pressure sales tactics or stories of great earnings.

Watch out for false claims like these:

Claim: This program is legal.

Fact: Gifting clubs are criminal enterprises. Organizers are guilty of a felony, and participants are guilty of a misdemeanor.

Claim: According to the IRS this is legitimate, because the law allows you to give someone up to $13,000 each year without a tax consequence.

Fact: Gifting clubs are not approved by the IRS.

Claim: The money paid to join is a gift.

Fact: A legitimate gift has no strings attached and is not an investment. Signing a statement that you expect nothing in return does not change the situation, and neither does calling the entry fee a “loan.”

Claim: This has been endorsed by the Attorney General.

Fact: The Attorney General does not endorse any business or investment plan.

Claim: Much of the money is donated to charity.

Fact: Even if the money is donated to charity, this does not make the program legitimate.

Claim: Prominent people are participating in this.

Fact: The people named probably are not participating.

Claim: This program isn’t a pyramid; it’s a circle with money flowing between the members.

Fact: Gifting clubs all meet the definition of an illegal pyramid scheme despite jargon that may be used to disguise the true nature of the program.

Claim: No laws are broken if your gift is in cash and not sent through the US mail service.

Fact: Organizers prefer receiving cash because it is difficult to trace, not because it makes their scheme legal.

Claim: Investing in this program helps create prosperity in the community.

Fact: No new wealth is created by gifting clubs. Money invested at the lower levels simply goes to the person at the highest level. The only way for participants to recover their money is to bring new people into the scheme. When the scheme shuts down, the last people to pay lose all of their money.

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  • September 12, 2020 at 11:45 PM by DavidW from: North Las Vegas, Nevada, United States

    I would like to address the biased and incorrect assertions in this "Review".

    Your assertion that all such activities are illegal is incorrect. Properly constructed and organized, gift giving is a legal activity. The methods some organizers employ are, however, illegal.

    In refuting your claims, I will use the example of Kindred Hearts Team, not to be confused with Kindred Hearts, or any of many similarly named programs.

    Is it legal? Yes, it is. It is in compliance with Attorney General regulations on Private Gifting activities

    True, the IRS does Not endorse of approve any such activity, however their own code does exclude the 1st $15,000 of gifts received per individual, per calendar year, from taxation (see publication 559, page 26 and form 709 instructions, page 3 under Annual Exclusion).

    True, a true gift has no strings attached. The gifts themselves have no strings attached, however, continued participation in the activity does have guidelines to adhere to.

    True, no Attorney General will endorse any business or activity, however, they do have regulations which determine what is legal and what is not and any business or activity which complies with those regulations Is legal.

    Much of the money is donated to charity? No. In Kindred Hearts Team, gifts are free gifts to the person they are given to. What they do with those gifts is purely up to them.

    Do prominent people participate? I wouldn't know. No claims have ever been made about that. We are all just average people.

    Kindred hearts Team is not a pyramid. There is no one on "top". Everyone cycles through in the same manner. The government is a pyramid, so is every company in Corporate America. Most of them are not illegal.

    Cash, money order, check, electronic transfer, they are all traceable these days and the organizers of Kindred Hearts Team have no say in how the members exchange gifts.

    Investing is not a term used in a private activity. Though we are a community, drawn together with the common goal of helping each other, gifts are not investments and do not create wealth or prosperity. They do, however, help those in the community to do things they may not have been able to do, such as pay bills or buy medications.

    The individuals in the community are our focus. Not making a quick buck or getting rich.

    Honesty, Integrity and Discipline. These are the attributes of a Kindred Hearts Team member.

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Is Kindred Hearts Gifting a Scam?