Work-At-Home Scheme Closed
Chris Gunn
WORK AT HOME/BUSINESS OPPORTUNITY SCHEME CLOSED FOR RUNNING PYRAMID
Recently, the Florida Attorney General's office got a temporary injunction
shutting down Unique Gems and freezing $5.4 million on assets on charges
that it was operating an illegal pyramid scheme.
According to the complaint, Unique Gems and its president, Enrique Pirela,
promised to pay consumers $60 for each necklace they assembled at home. To
start, consumers paid a $3000 deposit and received materials for 30
necklaces. In exchange for the assembled necklaces, the company was
supposed to give the consumers their $3000 back plus $1800. In addition,
Unique Gems allegedly promised assemblers commissions if they recruited
others who in turn deposited more than $5000 as a group in one month. More
than 8,000 bought into the scheme since it began last June. However,
contrary to claims by the company that consumers would be paid from the
profits it made from selling the necklaces to jewelers, the complaint states
that consumers were paid from the deposits of other consumers.
"Despite company claims that they would sell completed necklaces through
various merchants, few if any such sales have been made," Florida Attorney
General Bob Butterworth said. "The operation is being run strictly on
consumer deposits. That makes it a pyramid scheme that will collapse when
enough consumers seek their rightful payments."
The defendants are charged with violations of the state's Deceptive and
Unfair Trade Practices Act and the state's Business Opportunity Act.
Attorney General Butterworth is seeking funds to cover consumer
reimbursement and civil penalties.
If you are interested in becoming an independent contractor for a company,
get detailed information before you pay any money. Sellers of business
opportunities are required to provide detailed disclosure documents which
include such information as past litigation and criminal histories and proof
of earnings claims. Be especially wary of business opportunity fees that
seem way out line with anything that could be reasonably be expected or that
are outside of industry norms. If fees seem excessive, ask for detailed
proof that the compensation plan works as suggested. And always be wary of
any situation where you are paid simply for recruiting new members. If your
profit is actually being made from fees or "deposits" of other consumers, it
is probably an illegal a pyramid.
Sometimes, companies will combine different schemes. Regular readers of
these reports have seen warnings regarding work-at-home schemes, pyramids,
and business opportunities. When classic schemes are combined you need to
hold the plan up to several different standards. Proceed with caution and
read all materials you receive about a money-making opportunities carefully.
The FTC has excellent brochures online on Business Opportunities, Pyramid
schemes, and Work-At-Home schemes. Check them all out to find out how to
spot and avoid each of them.
<a href="http://www.ftc.gov/bcp/conline/pubs/invest/franchse.htm">
<a href="http://www.ftc.gov/bcp/conline/pubs/pyramid/index.html">
<a href="http://www.ftc.gov/bcp/conline/pubs/invest/homewrk.htm">
Note: The filing of charges does not necessarily prove guilt. That is
determined by the judgment of a court of law.
Log on the WebSite at http://www.fraud.org, or call 1-800-876-7060.
If you spot obviously illegal operations on the E-Ways, please
forward copies of the messages to NFIC at frau...@psinet.com.
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