Yesterday, two Guilford women and one woman from Essex were charged for their alleged involvement in a pyramid scheme known as “Gifting Tables.”
David B. Fein, United States Attorney for the District of Connecticut, and William P. Offord, Special Agent in Charge of IRS Criminal Investigation in New England, announced that Donna Bello, 55, of Guilford, Jill Platt, 64, of Guilford, and Bettejane Hopkins, 66, of Essex, were arrested.
Yesterday, a federal grand jury sitting in New Haven returned an 18-count indictment charging the defendants with conspiracy, tax and wire fraud offenses.
“The indictment alleges that the three defendants ran a pyramid scheme designed to enrich themselves at the expense of other participants,” said U.S. Attorney Fein. “In addition, the indictment alleges that the defendants tried to use the pretext of ‘Gifting Tables’ as a way to avoid paying taxes on the substantial illegal proceeds of their scheme. The investigation into this scheme and others like it in Connecticut is ongoing and will remain an important priority for my office and IRS Criminal Investigation.”
“These arrests should send a strong message to all who threaten the financial health of our communities,” said IRS Criminal Investigation Special Agent in Charge Offord.
“Schemes that seem too good to be true should be a signal to individuals to stay clear. Criminal Investigation is committed to investigating schemes like these in an effort to protect the financial well being of the American public and to ensure that everyone pays their fair share of taxes.”
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According to the indictment, a Gifting Table is configured as a four-level pyramid, with eight participants assigned to the bottom row, four participants assigned to the third row, two participants assigned to the second row, and one participant assigned to the top row. The top row participant is referred to as the “Dessert,” the two participants on the second row as “Entrees,” the four participants on the third row as “Soup and Salads,” and the eight participants on the bottom row as “Appetizers.”
To join a Gifting Table, new participants were required to pay $5,000, typically cash, to the Dessert, that is, the participant occupying the top position on the pyramid.
The $5,000 payment, which was fraudulently characterized as a gift, secured the new participant a position as an Appetizer on the bottom row. Participants moved from the bottom row of the pyramid and progressed through a Gifting Table by recruiting additional people to join.
When eight new participants joined a Gifting Table, each having made a $5,000 “gift” to the person occupying the Dessert position at the top of the pyramid, the Dessert left the Gifting Table and kept the $40,000 paid by the eight new participants.
That particular Gifting Table was then split, with the two participants occupying the Entree position on the second row moving to the top position (Dessert) of two new pyramids. The other incumbent members of the Gifting Table moved up a row on one of the two newly-formed pyramids, and the search for 16 new participants began. The success of the Gifting Tables depended on new participants joining and making the $5,000 “gift.”
The indictment alleges that from approximately 2008 to 2011, Bello, Platt and Hopkins oversaw and profited from this Gifting Tables pyramid scheme. The defendants recruited individuals to join the scheme, prepared and distributed materials to recruits that contained false representations, and misrepresented to recruits and participants that Gifting Tables was not a pyramid scheme.
The indictment further alleges that in May 2010, the defendants attempted to intimidate a participant who had questioned the legality of the Gifting Table scheme.
It is further alleged that Bello, Platt and Hopkins conspired to defraud the Internal Revenue Service by misrepresenting to recruits and participants that monies given and received during the scheme were legally considered tax-free “gifts” under the IRS code and that lawyers and accountants had approved Gifting Tables as legal ventures that generated tax-free proceeds. The indictment further alleges that Bello, Platt and Hopkins, filed false tax returns that failed to report income generated from the scheme.
The indictment details numerous communications sent by Bello, Platt and Hopkins in furtherance of, or related to, the scheme, including an email allegedly sent by Platt in March 2009 that told a participant: “It’s sort of a joke that I refer to our freezer as the ATM.” Later in March 2009, Bello allegedly complained to Hopkins and another individual about two recruits, stating: “They have had enough parties. Its [sic] costing us a small fortune in their food and wine delights. No more parties until they commit with the cash.”
In June 2009, Bello allegedly sent an email that said “I am not a . . . saint . . . I’m teaching you all how to make an extra 80 grand a year . . . Isn’t that enough?”
In October 2009, Hopkins allegedly emailed Platt and Bello advising that “we need to keep silent and under the radar.”
Later in October 2009, Bello allegedly emailed a participant and indicated “as women we like our own stash. Keep it in a safe. Keep it quiet because rather not have red flags raised. Hiring accountants and atterneys [sic] is costly.”
The indictment charges Bello, Platt and Hopkins with conspiracy to commit wire fraud, and multiple counts of wire fraud. Each of these charges carries a maximum term of imprisonment of twenty years. The charge of conspiracy to defraud the IRS carries a maximum term of imprisonment of five years. The charge of filing false tax returns carries a maximum term of imprisonment of three years.
Bello, Platt and Hopkins appeared yesterday before United States Maigstrate Judge Donna F. Martinez in Hartford and pleaded not guilty to the charges.
U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Internal Revenue Service – Criminal Investigation, and is being prosecuted by Assistant United States Attorney Douglas P. Morabito.
This case was brought in coordination with the President’s Financial Fraud Enforcement Task Force, which was established to wage an aggressive and coordinated effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.