Dozens report losses to pyramid

Women throughout county tell police investigators of losing thousands to scheme
The Press Democrat, Nov. 8, 2002
http://www.pressdemocrat.com/l
By MARY CALLAHAN

A day after investigators served search warrants in three North Bay communities, prosecutors said dozens of women came forward Thursday to tell about losing thousands of dollars to a pyramid scheme under investigation by local, state and federal authorities.

Deputy Sonoma County District Attorney Dani Jo Handell said most of the women were previously too embarrassed to talk about investing $5,000 in the Women’s Garden Circle, whose promoters promise a $40,000 payoff to those who join.

But with news of a 10-month undercover investigation that could result in criminal charges against the most active proponents, Handell said: “If someone has been involved in this, the best and only way they can help themselves is to get in touch with us and come forward immediately.”

The Garden Circle is a sophisticated version of women-helping-women gifting schemes that have circulated during the past several years.

Though Handell said she expects Garden Circle losers ultimately will outnumber winners, investigators believe millions of dollars have changed hands.

While the basic appeal is the promise of money, the program’s pitch is couched in terms of empowerment, altruism, female unity and new-age spirituality.

“I was told I was chosen,” said one woman who was asked to join but ultimately declined.

Some women with experience in similar gifting circles defended what participants call the women-helping-women movement.

“For me the best part was sitting in circle and hearing women tell their dreams, and how overwhelmingly it was about things that made the world better,” said one woman, speaking on condition of anonymity.

Healdsburg financial adviser Deborah Price said she has tried to discourage women from participating, but found they often lack financial sophistication, and trust the friends or family members who recruited them.

“I think people inherently, especially today, are very desperate about money … so that most women who are already kind of living on the edge, the idea they might make a quick buck is very appealing,” said Price, the author of a book called “Money Therapy.”

But authorities say any such scheme violates state law prohibiting operation of pyramid schemes or “endless chains,” through which participants attempt to make money simply by recruiting new members.

No arrests have been made in connection with the Garden Circle Investigation.

But, Handell said, anyone ultimately arrested also could face fraud, securities fraud and conspiracy charges, as well as federal tax evasion, mail and wire fraud charges.

In the Garden scheme, each circle has 15 positions. Eight participants are called buds, four are blossoms and two are blooms. They are arranged around a single person dubbed the bouquet, who can only cash out when all spots are filled.

The blooms divide the circle, becoming bouquets and allowing each of the other participants to move up a rank. Eight more buds must be recruited to “gift” $5,000 for each respective bouquet to receive her cash.

A 26-page packet given to one recruit describes a powerful, healing process “that has helped women to embrace leadership, overcome shyness, competitiveness and scarcity.”

Punctuated with inspirational quotes and readings, the new-age verbiage offers “a safe place to share and support personal dreams, needs and goals.”

It contends that buying in to the circle “primes the pump” of the “Field of Plenty” and leads to an opportunity to experience abundance as a “physical expression in the body on a cellular level.”

Authorities said members are disproportionately single, attesting to the appeal of sharing and camaraderie.

They say the group’s meetings are sometimes like revivals, with tearful testimonials about dreams realized.

Members are required to participate in mandatory weekly and biweekly conference calls that amount to pep rallies, Handell said.

They’re also coached in recruiting new members and told to handle naysayers by refusing to focus on negativity, she said.

Florida attorney Lewis B. Freeman, an expert in pyramid schemes, said they’re all “somewhat like cults.”

“They all have either a spokesman or a special bond or a special password,” he said. “The people really are trying to believe. Even though their left brain is saying, ‘Don’t go,’ their greed and the hunger for earnings is saying, ‘It’s got to be true.'”

Anyone with information about the Women’s Garden Circle is asked to call the district attorney’s consumer fraud unit at 565-3161 or the California Department of Corporations at (866) 275-2677.

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