PRESS RELEASE
Administrator Investigates People Helping People Network Program
 
For Immediate Release
Monday, September 09, 1996 
 
Contact: Irving L. Faught, Administrator
  Oklahoma Department of Securities
  405-280-7700
 
 
Oklahoma City/////  Irving L. Faught, Administrator of the Oklahoma Department of Securities announced today that he has issued an Order Initiating Investigation into the activities of People Helping People Network Program also known as People Helping People Network Group, a money exchange program that operates as a pyramid scheme. He is in the process of serving a Summary Order to Cease and Desist and Notice of Intent against those persons most directly involved for their alleged violations of the Oklahoma Securities Act. He is seeking a permanent Cease and Desist Order and may seek a civil penalty in an amount up to $50,000.

Members pool cash "gifts" of $2,000 to join and advance through various levels of the program through the recruitment of other members who likewise make $2,000 "gifts." Participants are led to believe they will ultimately receive a $16,000 "tax free" payoff as more and more people are recruited into the program. With these types of programs, more and more people must be recruited in order to keep feeding those people at the upper levels. Inevitably these pyramids collapse when efforts to recruit new members fail, leaving a large number of unfortunate participants.

Additionally, according to Mr. Faught, the Department has received information that People Helping People Network Group misrepresented: that the Oklahoma Attorney General's office said that People Helping People Network Group was not illegal; and that the gift was not taxable by the IRS. According to a representative from the Attorney General's Office, no such statement was made. Additionally, the IRS takes the view that such payments may, depending on the facts, be taxable.

Mr. Faught also commented that a number of pyramid schemes seem to be making the rounds in central Oklahoma at the present time. Participants should be aware that such activities may violate not only the Oklahoma Securities Act but the criminal statute, the Pyramid Promotional Scheme Act. The Department is vigorously investigating these schemes and may make referrals to local law enforcement agencies for additional investigation and prosecution.
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This press release, and related information, is available on the Securities Commission's web site at securities.ok.gov, by phone at (405) 280-7700, or in writing at:  Oklahoma Securities Commission, 204 North Robinson, Suite 400, Oklahoma City, OK 73102.