Dozens of Cloverdale women involved in illegal ‘gifting clouds’

Supported By:

Net Patrol International Inc.  Data Investigation and Forensic Services
Bankruptcy and Insolvency Trustees

Dozens of Cloverdale women have invested thousands of dollars into illegal pyramid schemes known as “pay-it-forward clouds,” and are actively working to recruit family and friends throughout the Lower Mainland to join them.

The concept surges in popularity every few years and has recently re-branded to escape the negative connotations of “gifting circles,” which is how the RCMP and Better Business Bureau (BBB) often refer to these pyramid schemes.

Clouds promise that if you invest a sum of money and recruit two more people who are willing to invest, you will one day receive a sum of money larger than the initial investment. In the case of Cloverdale’s clouds, women are commonly told that if they “gift” $5,000 and recruit two more participants, they will then, in turn, get a “gift” of $40,000. Other clouds offer lower buy-ins for those hesitant or unable to commit to a bigger sum.

The language used within the groups, at weekly meetings, and within group conversations via an anonymous, encrypted texting service, is important. It isn’t a “scheme” – it’s a community that helps women become financially independent. It’s not a pyramid, it’s a cloud. It’s not illegal, it’s a gift.

Despite the positive terminology, the clouds are by definition pyramid schemes and illegal in Canada. Rather than selling a product or service, all of the money made in a cloud is generated by enticing new members to join. The Canadian Anti-Fraud Centre defines a pyramid scheme as “frauds that are based on recruiting an ever-increasing number of investors” and it is illegal to promote a pyramid scheme or even to participate. According to the RCMP, a conviction could mean up to five years in prison, or a fine of up to $200,000.

So why are so many Cloverdale women signing on to the pyramid scheme? The Cloverdale Reporter attended three seminars hosted by Cloverdale businesses in December 2017 and January 2018 to investigate.

Read the original story at Surrey Now-Leader.

This story was summarized by Canadian Fraud News Inc.