Coquitlam Mounties are trying to clamp down on a new gifting pyramid scheme that has started to crop up in the area.
Investigators said the fraud targets law-abiding citizens who are convinced to recruit their friends, who each pay $5,000 to join. The new members are then expected to go out and recruit eight more people, raising a total of $40,000 each.
Coquitlam RCMP Cpl. Michael McLaughlin said many participants may not be aware the scheme is illegal.
"We believe many of those people don't realize they are doing anything wrong and don't realize the risk they and their friends are getting into," he said. "We suspect there are people at the very top who know very well it is illegal and they are making the money."
Recruiters tell prospective members that the buy-in is legitimate and not taxable, often calling it a birthday gift, a transaction or a gifting circle, McLaughlin said.
So far, only a couple of formal complaints have been made with the RCMP, but investigators have been hearing anecdotally that there are more victims out there.
McLaughlin said many people may be reluctant to come forward to police because the people involved in the scheme are often friends and family. However, he added that investigators need to be aware of the situation to help prevent more people from becoming involved.
"One of the biggest problems with fraud is the sense of shame and embarrassment people go through when they are victimized," he said. "We think that is at play."
Anyone who has been victimized by the gifting pyramid scheme are asked to call the police. The Coquitlam RCMP can be reached at its non-emergency number at 604-945-1550.
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