Gifting Circles

Gifting Circles seem like such a great thing. It starts out innocent enough when a friend whispers something in your ear at work or at church or something about inviting you to have a glass of wine tomorrow night with her friends. She says she is meeting a bunch of smart, successful women – like yourself of course – and you should come. Who wouldn’t want to go check that out? You need a break from work and the kids anyway. Besides, it’s good to get together for friendship, sisterhood, and a little laughter with other driven women who share your career or your interest in (something).

Your friend picks you up and it’s like a little caper trying to find a place to park and sneak in. This is fun already! You have some really good wine and talk about stuff with other women that you wouldn’t be able to say with men and the kids around. It’s exclusive which makes you feel special, as you can only get in if you were personally invited. Everyone is on a strict first name basis only. You recognize a few people who work in your industry which gives this whole thing some credibility. Plus you get so many hugs that you can just feel the love in the room. You connect with wonderful, giving women on such a great level that you don’t want to go home. Luckily everyone agrees to meet again in secret next Tuesday.

You don’t know it yet, but you got invited to what is usually called a ‘Gifting Circle’, a ‘Women’s Financial Circle,’ or a ‘Women’s Financial Collective.’ Men are strictly forbidden. You wouldn’t want men around anyway. All they would do is make rules and try to be logical and stuff. Besides, this is the chance to connect with other women who do what you do for a living and maybe accomplish great things. Its a huge part empowerment meeting, a great wine party, felony, and a women-only networking event all rolled up into one.

On the second night two of the women motion for you to join them in the front room. They tell you in hushed tones about how this group has done great things for women like raising money to fly local Hispanic women home to Mexico to escape abusive husbands. Or how they helped move someone’s ailing mother into a really good home that can treat Alzheimer’s, or they got cancer treatment for two orphans in Haiti, or they helped that woman in the red dress by the door get out of debt so she could start her own business and find a real man. These are all great things that really strum your heartstrings, especially after that second glass of high end Pinot. You lower your voice and ask where the money came from. Ah, they say, everyone freely gifts $5,000 and in a few months it will be your turn to decide what good thing you are going to do with $40,000.

Wow, you say as the wheels turn in your head.

Sure it’s a lot of money but you didn’t get invited because you are living paycheck-to-paycheck. This is a Gifting Circle for women who do (something). You all have good jobs and a middle class lifestyle.

Two wine parties later you freely write the check with a smile on your face.

Gifting ClubYou even sign a special ‘contract’ that looks all legal and everything that says you voluntarily gift this to the club without any expectation of ever getting it back. All you want to do is do good with your money, sort of like a pass-it-on kind of thing. Of course, as soon as you pay in your money you become one of the stars in this chart to the left. Once there are eight new stars, the ‘sun’ in the middle gets her $40,000 – an 800% payoff. The chart then splits in half and everyone moves up a level. The two green planets are now their own stars, the blue moon Mommies move up to planets, and the stars are now one step closer to their own big payoff. Maybe.

The day after you write your check you get a private call from someone in the group who tells you the name of the new ‘sun’ who will get your group’s $40,000 once everyone finds eight new stars. They also tell you some wild story about how she is going to save the lives of three Afghan war orphans with diabetes living in abusive Taliban homes but you aren’t supposed to tell anyone. It’s a secret.

This is how the 'dinner party' version works. It's the same as the star chart kind of scam but sounds better.
This is how the ‘dinner party’ version works. It’s the same as the star chart kind of scam but sounds better.

Now, nobody is required to bring in new special friends to gift money but how else are you going to help save three abused Afghan war orphans living with war criminals? We’re supposed to be saving that country from the bad Taliban, right? In fact, there isn’t an organization doing anything at all. It’s just a bunch of women enjoying friendship, fellowship, and of course great wine. And secretly talking to their friends at work about why they should join their Gifting Club and part with $5,000.

That, plus as soon as all you “stars” get eight new people to kick in you get one level closer to your own $40,000 jackpot. You start dreaming about what kind of thing you can do to fix the world with $40,000. You want to do something better than everyone else so you have a great story to share at the wine parties.

If it sounds too good to be true...well it must be true!
If it sounds too good to be true…well it must be true!

But at one of the get-togethers you kind of wonder how these things can keep going. After all, it seems like the numbers don’t really work. You ask someone but they quickly shoot you down. Oh no, they say. The naysayers are men who don’t want strong, powerful women doing good things. We’re doing this ourselves! Don’t listen to that guy Sam with the blog.

Well is it legal you ask? It’s perfectly legal, they say with a little tinge of indignation. There isn’t a central organization and nobody is forcing anyone to recruit. Besides the IRS allows you to gift up to $10,000 without paying a tax. It’s up to you to “follow your heart and do what you think is best on your tax return when you get your $40,000” they say to you with a wink.

So where’s the scam, you ask? It’s a reasonable question. Most of the time the women involved don’t see the crime, either. One of these just ripped its way through the wives of police officers in my hometown. After all, the $5,000 is a gift that they give freely and without any expectation of any return so they’re not victims. Just like a $50 birthday present to your niece, right?

Wrong. Gifting Clubs are illegal pyramid schemes. They’re done with really slick emotional appeal and promises of huge payoffs but sooner of later these clubs are going to run out of women to scam. It’s simple exponential math.

This is why your typical pyramid scheme doesn't work.
This is why your typical pyramid scheme doesn’t work.

Lets assume you get in as one of the first eight stars. For all eight of you stars to move up to be moons after the first split you need to recruit a total of sixteen new people. Then for all eight of you moons to move up to planets you need to bring in 32 new stars. It keeps going. All of you initial eight might get paid after 128 new stars join, but to keep going and let everyone in the system receive their own $40,000 the scheme needs to bring in more people than exist on the planet. I suppose you’re going to run out of women in your city first, and that is when it starts to fade away and collapse. The money disappears but everyone says they swear they want to keep it going. Maybe next summer, the bottom levels all tell themselves.

I actually admire this kind of sophisticated ripoff. Not to say that I would run one of these. I’m not even sure I could. But all that emotion and wine hides a scam that willingly snookers women into giving up $5,000. They actually BELIEVE they are going to be able to help sightless and oppressed HIV+ sex slaves in Cambodia or whatever. Plus the top levels kind of suggest you don’t really have to report it to the IRS when you get your $40,000 so you can spend the whole amount on your secret good thing. That makes you complicit in tax fraud that feels good and fun at the same time, which draws you in deeper. It’s pure genius.

-Samuel Owen

Read my new post about two women just sentenced to prison for running Gifting Circles.

© Samuel Owen 2013. All rights reserved. Please read important notices and disclaimers by clicking here.

56 thoughts on “Gifting Circles

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  1. I not advocating these circles, but to say it just keeps getting wider at the bottom is false. They usually go deep, not wide. And of course the “authority” is going to discount these types of money games…the system doesnt want tax free income happening and also doesnt want people to become financially free and get out of the rat race. So your article is really not fair and balanced, its just how your wanting to see it. sorry.

    1. Gifting Circles are illegal Ponzi schemes. They collapse when there are too few people left to keep contributing and everyone who wasn’t at the very top gets ripped off. Since their bottom layers increase exponentially, they actually do get wider at the bottom where the victims are tricked into ‘contributing.’ You say they “go deep” but the truth is that they need to keep finding more and more people to ‘gift’ and that means their scheme keeps getting wider at the bottom. Do the math and figure it out.

      Also, the money taken off the top is taxable as income. What you call “the system” just wants you to pay taxes like everyone else who earns the same amount of money lawfully. I don’t think you’re sorry, I think you are involved in keeping one going and are trying to use your comment to counter my description of the criminality, theft, and tax evasion at the center of Gifting Circles. Am I right?

      1. AllThingsConsidered’s comment is the perfect example of how the cult language blinds common sense. It’s absolutely baffling how so many people, people who went to HIGH SCHOOL, some even COLLEGE can get caught in something that is so obviously a pyramid. They call it whatever they want to call it. And the “authority” and “the system” is actually protecting unwitting fools by going after recruiters who operate in these schemes, not trying to keep people from getting out of the “rat race”. I consider myself a conspiracy theorist, but that is just plain moronic. Oh and another thing, by definition a “RANT” doesn’t proclaim to be fair and balanced, the author is giving a perspective based on a combination of facts and his own thoughtful analysis. Great job Samuel, by the way. Loved it.

    2. A pyramid is a pyramid in any case, either wide, deep, fat, whatever. That is a ridiculous excuse based on a word trick.

  2. The circles I am aware of (even thought not part of one yet) have the same women circulating. So, it is not about getting new women in all the time. The oldies simply come back to go through it again. Some women have done it 8 times! Just FYI… maybe they won’t run out of women as quickly as you think…

    1. If you’re saying you think a group of women keeps kicking in $5,000 each in a round-robin style gifting circle without bringing in more people, then I think you’re misinformed. Or worse.

      Lets say there are six of them and they each “gift” $5,000 a year. The fifth in line has to wait until the fifth year before they get their $30,000. Nobody wants to keep throwing in money in the hope that everyone else (especially the first four recipients) keep “gifting” so that five years from now they will get their money. Even if they “gift” twice a year there is still no way to force the first winners to stay involved for two and a half years. People move away, get divorced, lose their jobs, die of weird diseases, and generally decide they don’t want to keep paying out to people they no longer like very much for no return.

      I think it is absurd and disingenuous for you to suggest gifting circles aren’t always seeking new members. The people in the circles you are aware of may not be telling you but they are really out there recruiting new victims. The math doesn’t lie, and human behavior is such that people are not going to keep making something like a Gifting Circle work forever. Some day the whole thing will collapse and the last ones in will get ripped off. That is why they are illegal, which I think you understand very well.


      1. As I understand “Ease of Living”, I think she was saying that it is a true circle, and not a pyramid. For example, 5 people, A, B, C, D, and E all throw into a pot, and the first pot is controlled by A. Then next time they all throw into a pot, B controls where the money goes. And so on.

        Perhaps she is misinformed, and it is actually an enlarging circle (which is a pyramid and therefore a bad thing.) But I’ve heard of things like this working well. Especially in some cultures where a husband may not allow his wife to buy a dress, but will allow her to pay her “Circle Dues” or whatever each time she meets. And in the US, perhaps it’s a fun way to combine resources to feel even better about giving to charity.

        I’m not suggesting any of this is the norm. But I am trying to give “Ease of Living” the benefit of the doubt.

        1. David, actually part of the “circle”culture’s cult language helps convince its initiates that it’s “not a pyramid, it’s a circle” because some of the women often re-invest and “re-circulate” the money. They are given a script to regurgitate should anyone confront them with questions regarding the sustainability of this structure. She heard this theory from the person who tried to recruit her (let’s hope that over the course of the past 3 months the veil has not blinded her and she has declined the invitation!). Part of the justification and reasoning these people use to convince themselves that this is NOT an unsustainable scheme is that women DO often put money back in either by entering again and/or by backing one or more people. “Backing” means they pay for another woman’s $5K entrance fee, and split the winnings ($40K / 2 = $20K) when the new initiate reaches her receiving position. However, the math shows that this may slow down the inevitable collapse, but it certainly does not prohibit it. Next, consider women who have successfully “backed” 20-30 women to the tune of $400K-$600K easy money, and once the “market” for new recruits has been exploited they pack up and buy land in South America leaving the women high and dry to recruit as best they can. I’m not making this up.

      1. These woman do not “go through the circle again” – they start NEW circles with new victims. The leaders put up nothing. They start a circle by convincing 14 other woman to give them 5,000 (appetizers, salads, and entrees). The first person makes $70,000 (not $40,000), then – per the rules of the “circle” have fulfilled their obligation as a “leader” and are SUPPOSED TO LEAVE so that the circle can “help” more women….

        Do the math, Maria. This isn’t an “anti-circle rant” – it is a pro-logic tutorial.

    2. that is not accurate… they can’t just continue to have the same women join again and again (which is not to say that some people don’t get out there and hussle and go through it multiple times… but they have to continually bring in new suckers to make it work)… they rely on more new people coming in. If you have 10 people in a group and everyone gives everyone else a $100 you give away $900 and get $900… there is no gain. You can’t increase a pile of money by giving it back and forth between members of a group… you must bring in new members. So… you give your money, and recruit 2 who recruit 2 who recruit 2… and then you get your payoff… that is 14 new people that have to sign up for you to get money. Mathematically it is IMPOSSIBLE for more than one in 14 people who join up to get their payoff. This is not “the establishment” trying to close a loophole… it is a simple matter of arithmetic. For every person that gets money, 14 people lose… unless you can continue to sign up new people… but there are not infinite people to sign up! As was shown up above, the population of the world is not enough to sustain this past 12 cycles… and that is assuming every single person in the world is unable to do the math, and has the money to participate… you are more likely to have a couple hundred people in your area who fit into that criteria…which gets you through the first 3 cycles… you want to make money at this? You have to be the one standing up at the front selling it… and you have to be willing to accept that you are misleading people to get money out of them.

  3. Aloha Sam! I love on the island of Maui and have recently been approached by 6 different women with the Women Empowering Women circle. At first it sounded really beautiful and awesome! Then I went home and did the math and talked to my husband about it. We realized quickly that the math doesn’t work and that most of the women would end up losing. The thing that really bothers me is that all of my friends who are joining, if they took the time to really see what was going on, would never join a group that is lying and taking women’s money. And what is really sad, is that of the women I know who are in, are not successful middle class women, but single moms, or struggling young women who cannot afford to lose $5000. When I approached one of them with the math, she said, “maybe the equation is wrong.” And another one said, “but the law of the universe is that what you give, you get in return.” I agree with the last statement for a lit of reasons, but to give and get 750% in return, must be a law of an alternate universe I have yet to set foot in.

    I am worried for all these women. We live on a small island and the number of women here who can/will give the “gift” will expire far faster than I believe any of my friends will receive their gift. I’m torn between going to the authorities or just informing them and see what they choose. I just don’t want to see even more women taken by this “too good to be true” scam.

    1. Mahalo, Ranee. I love Maui, especially the Lahaina area up by Honokowai. Very peaceful.

      It’s sad the ‘Women Empowering Women’ circle is making its way through your friends but it shows how powerful the appeal is. I’m glad you were able to figure out it was scam and hopefully your friends listen to you before they lose their money. You could tell them that the same thing was in the papers in 2002 when some people got arrested for the scam and got in a lot of trouble: Also, back in 2001 the Commissioner of Securities in Honolulu issued a Cease and Desist Order against ‘Women Empowering Women’ because it was a scam that was targeting women on the Big Island: The Commissioner was really serious about it and said “The Order issued today by the Commissioner finds that memberships or interests in the gifting circle are securities, prohibits the named parties from making any offers, sales, or solicitations of these securities, or any other securities, in the State of Hawaii, and imposes a civil penalty of $90,000 joint and severally.” That’s a big fine. Here’s the contact information for turning this one in to prevent others from getting hurt:

      Hawaii residents who have been contacted by, who have invested with, or who have any information regarding any of the above named parties are urged to contact the Securities Enforcement Branch of the Department of Commerce and Consumer Affairs at 586-2740 on Oahu. The toll free numbers for the neighbor islands are as follows:
      Big Island: 974-4000, then enter 62740 and hit #
      Kauai: 274-3141, then enter 62740 and hit #
      Maui: 984-2400, then enter 62740 and hit #
      Molokai & Lanai: 1-800-468-4644, then enter 62740 and hit #

      Thanks for your contribution to this post. I hope we can help prevent others from getting their money stolen.


  4. May I ask….if I know of a gifting circle and want to put a stop to it, whom do I contact? I was living in Canada for a time and reported one to the Commercial Crimes division, and they eventually did nothing. (I heard later because there were a lot of cops involved in it themselves). The one I wish to report is based in LA. What department do I call and report it to?

    1. Well, thanks for reading my post about Gifting Circles. If you want to report a Gifting Circle in Los Angeles you could start by contacting the LAPD Commercial Crimes Division at 213-486-8430 or 213-486-6630. Not sure which one.

      -Samuel Owen

  5. I dont agree with being ripped off and I am thankful for your article and opinion…BUT, it just seems like you are a little angry…and calling the police department? wow…Im sure having your friends arrested will help…you know what, people get ripped off every day all of the time…just work on helping the people you know, no one needs to frenzy about anything and get more internet rights revoked, phone calls tapped, etc…Big Brother is robbing each and every one of us all day long…All these women are looking for is some freedom, real freedom…try giving someone that and see how happy they are and how many people they can help. Ive turned down every circle that has come my way, no regrets, my friends will have to learn the hard way…I guess, unless they read your article…anyway thanks for helping ladies be aware.

    1. Well Maggie, um, thanks for your comments. I think. No actually I don’t know what you are trying to say. Are you telling me something like so what if women get ripped off by a Gifting Circle as people get ripped off all the time anyway? Or that I should hush up because I’m going to contribute to the establishment of a police state and the end of freedom as we know it? Because I don’t agree with your idea to let your friends get ripped off and “learn the hard way” or the idea of calling the cops on your buddies.

      You know, I think you’re crazy. But I’m fine with what you wrote because the other readers of my blog know I think the crazies are my favorite. I especially like the part you wrote about how you think these Gifting Circle scams give women “freedom, real freedom.” That’s good stuff! I can almost hear Mel Gibson. Same with the bit about how you think “Big Brother is robbing each and every one of us all day long.” Also, do your friends know you like the idea of them getting ripped off and learning “the hard way”? Why don’t you just take your happy pills and let them know it’s a scam. That’s what friends are for.


      1. She didn’t say the scam gives women freedom…she just stated that is what they are LOOKING for.
        And truely, some women DO get it from these scams. Just, sadly, at the expense of others..
        I have a very good friend who is knowingly getting involved in one, knowing she might not get paid out…. So, in a way, to her, its like gambling. I showed her this article and explained to her that it is still cruel to be involved in something where at the end a lot of women get screwed, but she just says that’s the risk they are taking.
        So…. Obviously its not much of a risk for the people who start it….it gets fuzzy and confusing for people in the middle…. The whole thing just makes ne upset, tho, because of its inherent scammy nature. And that the people involved can be involved and not even know whats happening to the people down the line…
        Thanks for posting this article.

        I can definitly relate to not wanting to call the police…I couldnt call on my close friend,but i also dont want the ‘circle’ which isn’t a circle, to continue.

        1. police do not typically target the other “members” of the circle… they go after the organizers. If your friends is being ripped off they won’t go to jail for their part in all of it… they are counted as a victim… even if they are one of the lucky few who have made some money. They go after the people who are setting the circles up… that is where the real money is. To understand that look at the example above… each person recruits 2 who recruit 2 who recruit 2… so 14 people jion up, and then the bottom 8 pay you your big payoff… but what happens with the first person to set one of these up? well… they get the money from all 14 of the first pyramid that they set up… they get it from the first 2 they recruit, and from the 4 they get, and from the 8 after that… it is only on the next step after that that anyone else gets anything. THAT is the person the police go after.

    2. Maggie,

      By that reasoning, no one should have reported on Bernie Madoff, because it was so clearly a scam and people should have just learned the hard way, right?

      Just because I don’t know the someone who will get hurt by this, since inevitably many people *will* get hurt…doesn’t mean I don’t have a responsibility to report it. The faster it stops, the fewer people will lose their money. See, when one thinks and acts morally, one realizes that everyone is deserving of equal protection. Yes, some people are desperate and will be lured into this…people who truly cannot afford to do it and for whom the loss would be catastrophic. So by reporting it and getting law enforcement to put an end to it, you save people from pain and loss. That, is called ethics.

  6. Hey Sam,
    Thanks for your well written and clear account of this type of scam. I found your article after a search, as I was approached by a lady last night offering me an invitation to one of these circles. I was already suspicious of the meeting, as she had been pretty unfriendly before, but was suddenly willing to meet up and “get to know me better”. – Side note – I had been approached in a similar fashion just 6 months ago, but that was an attempt to sell me an array of expensive cleaning products.
    You know all the details, but I was struck by this false sense of “doing something wonderful with the money”. It was an interesting spin, I thought. This particular lady has no wealth, and I’m sure, no intention of giving the money to charity – it was an interesting diversion on the basic premise. Also, she told me that she doesn’t actually meet the other women, but that they talk on a conference line, and that they are all over the world. How convenient!
    Thanks again for the information you provided.

    1. You’re welcome. Interesting about how the others meet by phone conference. They could be anywhere. Well, I’m glad you picked up on the scam before it was too late.

      -Samuel Owen

  7. For all the Circle apologists out there who think that reinvestment in the circle prevents it from growing outward or continue indefinitely, you obviously have not done the math.

    The number of recruits increases exponentially, regardless of reinvestment. Once the first dessert gets her prize and is ready to reinvest in a circle, there are two circles that need a total of 16 new appetizers for a total of $80,000. How many circles do desserts usually reinvest in? 1, 2? If one, her investment represents no more than 1/16 of the new round, if she gifts $5000 in both circles, her gift represents 1/8. So instead of 16 new people, you have 14 new people. So instead of the number desserts needed with each level being x ^ 2, it is instead x ^ 1.93. The impact is negligible. This number will not change over time because the paid-off-dessert-to-appetizers-needed ratio stays more or less the same at about 12.5:87.5. So instead of 31 cycles being needed to completely deplete the planet’s supply of adult women, with reinvestment it would now take 33 cycles. It’s a pyramid scheme no matter what way you look at it.

    Now let’s look at the exponential growth in the amount of money that is needed to sustain the circle. That equation IS NOT AFFECTED AT ALL by reinvestment. AT ALL. So for each level of this pyramid, the amount of money needed to successfully complete another level doubles. It doesn’t take long before the amount of money needed is greater than the GDP of the entire U.S.

    The gifting circles are CLASSIC pyramids. Don’t believe me? Look up pyramid scheme on Wikipedia, and you will see the most basic pyramid has the same structure as the women’s gifting circle. Moreover, it even mentions gifting circles as an example of a pyramid scheme. Reinvestment is not unique to the “Circles”. This is something people do in all pyramid schemes — and they do it to make even more money.

    For all of you who are critical of the US. Capitalist pyramid scheme and it’s complimentary patriarchal power structure, I’m right there with you. But a Gifting Circle is not an alternative that empowers women. Rather it’s just a more simplistic model of capitalism — both are unsustainable and enrich people at the top at the expense of everyone else. And tragically, for every single-mother it empowers, or woman trying to escape an abusive relationship, there are 8 more single-mothers or victims of partner abuse whose situation will be made that much worse as a result of the Circle’s collapse.

    The longer it goes on, the more people who are going to suffer.

    If you want a true alternative to out modern economic system, one that provides a practical and realistic model for a true “gift economy”, I highly recommend that you read Sacred Economics by Charles Eisenstein. You can read it here, for free (or a gift) at

    However, for starters I recommend a great blog post by Nala Walla ( that examines the Circles using the principles of Sacred Economics and Sacred Geometry. The author of this article goes beyond simply critiquing the Circle — she puts out a call to all her sisters to collaborate on the creation of a real gift economy. If you are in the Circle, you are not stuck. Rather you have an awesome opportunity to rechannel all the positive energy and positive vibes that you feel with your sisters in the Circle toward the creation of a real alternative that is sustainable and empowering for all.

    1. Ah, thanks for your comment. The math you describe makes sense, but I went to law school so I wouldn’t have to think through stuff like that. Interesting counter-argument, though, and I’m glad you took the time to post it here.

      I checked the links in your comment and they were interesting. I’m not sure about sacred economics and I’m not familiar with the feminist perspective or that critique, as my thing runs more toward criminal arraignment hearings, felony indictments, and restitution statements. All of which come fast and thick from Gifting Circles, as you might imagine, which makes some real money for lawyers like me! So I kind of don’t want you to convince too many people to stay away from them, OK? I have a big mortgage payment on my beach house plus I have to put the kids through college.

      -Samuel Owen

  8. A gamble is a gamble. If these women are being told there is no guarentee of a payback, they sign a paper stating they expect nothing in return…Then they know what they are doing. It is really no different then going to Vegas with 5000$ and dropping in on the Craps table in hopes to win and tripple your money, There is no guarentee that they will win that money from the casino. It would be their risk. Yes eventually there will be loosers in this circle but like any gamble there are lossers. As I see it this is nothing more than maybe illegal gambling…However so are the men’s tuesday night “friendly” poker games. Maybe the women should meet in Vegas once a week and call it gambling losses and winnings. Would that make it legal??..Truth is there is enough information out there on these circles; contracts are signed saying they understand they may not recieve a return, infact they sign it stating they expect no return. Therefore these grown adult women are making there own risky choices, and it should be left at that. However I will be saving my big money for Vegas so I can throw it away on lots of different sceemes set up for the top guy to win. ( AKA the Casino).

    1. Ah, we have a Gifting Circle apologist! I’m glad you took the time to post a comment, although you really need to buy a dictionary.

      You say a gamble is a gamble, but Gifting Circles are crimes. See my recent post on two women who just went to prison for running these things in Connecticut. You’re making a very weak ‘willing victim’ argument and a half-hearted comparison to legalized gambling. You must kind of think that if the circles were regulated the way card games are in Vegas then they would be OK. The problem with that comparison is gambling is based on odds that are independent of the number of people involved. Circles will always rip off some people when they get too big or collapse. And since they are unregulated the ‘winners’ hide the income and defraud the government. Because of the frequency with which people get ripped off, state and federal laws define them as crimes. You’re not going to convince me that the people getting involved with these things are just making some kind of risky choice. They are getting conned into giving up $5,000 which is why these are illegal.

  9. This is so funny! Sounds like the boys are a bit pissed that they didn’t think of it first. I’m gonna go tell on them!!! Waaaaaa.. You guys are so small. Crack me up!! It is so time for the patriarch to fall…THIS is why you males are so threatened. Power to the women!! Catch em if you can!! HAHAHAHHAHAHH!

    1. Hey look everybody, we have another screwball reading this stuff! I’m not really sure what her name is, since her email address is “f*” so lets just call this dummy Feminine Power, OK?

      So, what I think is that we can all agree it’s way too easy to knock around another one of the idiots like Feminine Power who think we live in a male-dominated, misogynistic culture that is threatened by powerful womyn (it’s not spelled ‘women’ because that includes ‘men’ at the end and nobody wants that, right?). All I want to point out to Feminine Power is that it doesn’t help the womyn’s liberation movement when you go around using Gifting Circles to rip people off. You are not doing something noble.

      You’re a thief.

      You are taking advantage of women using a sophisticated play on their emotions, hopes, and fears. What you are doing is wrong no matter how screwed around in your head you have made yourself to think that you are empowering people. Oh, and about your comment ‘Catch em if you can!!’ – please read my post about those two women who went to prison recently for running Gifting Circles in Connecticut. I hope local law enforcement does catch you. And when they do, I hope they imprison you and publicly use you as an example of criminal conduct to deter other idiots like yourself. Gloria Steinem would be so proud of what you have done in the name of feminism!


    2. Hilarious. Given that many of the women in these things are getting funded by men, and many of them are in fact run by men on the outside, who know that they can exploit greedy, needy or simply dumb women by packaging it in faux NewAge Sisterhood/earth Goddess/empowering Women bullshit. It would be laughable if it weren’t so sad. And opportunistic. And illegal.

  10. @Power to the Feminine: A few points to consider- 1) There are men’s versions of this scam as well (Fire Circle is one). 2) Most of the men that I know are not intimidated by women who are truly empowered. 3) This is not about empowerment, this is predatory, and has very little to do with enlightenment in any shape or form. 4) Enough men and women in our Northwest community have recently called our friends on this bullshit, and the circles are folding- not only here, but all over the West Coast. The FBI is connecting the dots in many cases, so this is a great time to get out before the shit hits the fan.

  11. Well, the post is actually the sweetest on this laudable topic. I harmonize with your conclusions and will eagerly look forward to your next updates. Saying thanks will not just be sufficient, for the great lucidity in your writing. I will at once grab your rss feed to stay informed of any updates. Fabulous work and much success in your business efforts!

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  13. I absolutely love this article, it explains the concept so well. I was invited to a gifting circle in my city and reported it to the police. I am a tax practitioner and to know that this type of fraud is going on makes me sick to my stomach.

    Thank you.

  14. Hi thank you for this post. I have been in a circle for over a year now and gracefully going to exit after my friends money is returned to her. This circle should be called “mean girls” who rip others off. There are a circle of women who claim to be spiritually enlightened and cleansed through this “circle work”, but as the math suggests not everyone is “gifted.” There are a small group of women that seem to have a handle on how to turn circles over in 4-6 weeks leaving new recruits backed and left behind for a long dragging, very catty circle culture. I am happy that the person above reported it to the FBI, I wish more people would including myself.. I am just very stuck with this. I have not “invested” gifted any money into this and have not received any money because it is not working. Women are not recruiting and when you ask for help with the movement the women who invited you are of no help. They refuse to go back into these circles and then recruit others for more “mature” circles with implied statements that these circles are moving very quickly and this is a good time. Women claim that if your circle is not moving then it is due to a “blockage” with in yourself. For those that it has worked for as example the person who invited me, she has been through 6-7 circles – do that math – on top of them backing other women.I have not finished any. My moral compass is definitely more aware of the scamming that is happening. At first I was jealous, then I became resentful, then a good friend that I recruited became soulfully damaged by the “dessert” in charge and left only to not have her money re-gifted back in which the guidelines advise will happen.. this is not the case. For every winner there must be a loser. This is awful. Please advise who to report this to?

  15. I was recently involved in a gifting circle and decided to leave after discovering it’s illegality. Is it possible for me to get my money back from the dessert (who has also recently left circle without paying anyone back)? Thanks so much!

  16. A while back I had a lady friend who got involved in one of these on the net. They even had an animated cartoon to describe the whole process. When I saw it, I found two glaring logic inconsistencies. But she went ahead anyway. Once she sent in her money and her letter saying she was never expecting the money back, the people who had recruited her disappeared. They were grifters working inside of the system with no intent of working the system, only taking her money with no legal reason to give it back. They saw the loophole and probably made a small fortune.

  17. Samuel – are you practicing law? I have been talked into one of these circles and after 1 call there is no value in it for me. I’m in need of an attorney to see about getting my $5,000 back. I live in Los Gatos california. Appreciate any insights. Thank you!

  18. Loved your article, Sam. Great work. My attention was drawn to it by a financial journalist for the New Zealand Herald. I don’t think we have too many of these kinds of schemes in NZ (but I don’t really move in these kinds of circles so could well be wrong). However when I was a young mum there was a certain amount of pressure to come along to sales events (disguised as ‘parties’) such as for tupperware, makeup, bed linen and weird dietary supplements organised by other young mums, for whom it seemed to be quite a career choice. It’s all very small scale stuff as far as I could see, but nonetheless I think the world would be a better place without it.

    1. Hi Carol, yes there are these circles in NZ, I have just left one after realising the risk I was taking with my money, my friendships and my emotional health. These circles are dangerous on lots of levels. I am waiting and hoping that I will get my money back, The woman at the centre of my circle has told me that she can only pay me in parts so we shall see. I warn anyone away from them if you get invited. I am worried as many of my friends are in them so a large part of me wants them to have success because they have already invested so I have not told them the real reasons I am leaving but I also want to warn others away from them. Please please read everything you can about them before you join one, make an informed choice. I didn’t, I was swayed by seeing my friends getting some money back and the emotional ‘support’ I was going to receive. But if you spend some time in them you realise they have no substance at all.

  19. I have news… Now these pyramids are appearing in South America thanks to those helpful gringas that have come down here to “empower” womyn and enrich themselves.

  20. Hi ii am also a victim of that gifting girls cycles here in BC Canada. Its been reported to the BBB but it seems nothing happen and the authorities are not doing anything.. I have seen the report on global news bc last Aug.29,2016 but its just a warning for some women aside from that nothing else. Do you know where we can go in order to stop these and those people who recruited us would be punished.. I admit I have left in a bad debt and until these moment I am suffering for it in paying slowly from the bank because I only borrw the money when I join the group last 14months ago.. Please help.. Not only me a lot of ladies who joined that circle. Thanks a lot.

  21. Same thing with me, hoping to get back my $5K that has been given almost 2 yrs ago…No news, no hope the people who brought me in to that circle are my co workers that is why I have put my Trust in them and right now they are not even working with me in the company. I dont know what happen to them. Please help or advise us how to get these kind of people be reported to the authority and be punished.. Thank you!

  22. I know this post is old but there is a HUGE new scheme going on. It is called ‘The Christmas Loom’. One person is in the center of the loom, two are outside of the center, 4 people are outside of that and 8 people are on the outside of the loom. It makes more since when you see a picture but I cant post it here.

    How it works:
    To join the ‘loom’ you have to pay $100 to the person in the center of the loom. You are then placed on the outside circle with the 7 other people that paid the center person $100 to get in on the scheme. Once the 8 places are filled, the loom splits and the two people right outside of the center move into the center and everyone moves up a level. The cycle begins again with 8 people joining and paying the person in the center $100.

    The second scheme that has emerged this holiday season is a list.

    How it works:
    The person at the top of the list is getting paid. The first two people to say ‘MINE’ get added to the list at the bottom and pay the top person $25 each. The top person is then taken off and the list moves up. The cycle then repeats itself.

    Like any pyramid scheme, people have stopped joining and all things have come to a hault, with the exception of a few groups.

    My advice to you: DO NOT get involved in this scheme. I know so many people who have lost so much money doing this. It breaks my heart to see what is going on still and what has happened.

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