PRESS RELEASE
Gifting Program Ordered to Cease and Desist
 
For Immediate Release
Thursday, November 30, 2000 
 
Contact: Rebecca Cryer, Enforcement Attorney
  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 a Notice of Hearing on a Recommendation to Issue an Order to Cease and Desist against "Private and Confidential," a money exchange program that operates as a pyramid scheme.

Mr. Faught warns Oklahomans to avoid participation in any type of pyramid scheme offered in Oklahoma. “Participants should be aware that these schemes violate both criminal and securities laws. The ‘Private and Confidential’ program has every appearance of a pyramid scheme that violates Oklahoma law, and I strongly urge Oklahomans to avoid it," Faught said.

Participants in the Private and Confidential Gifting Program are initially solicited to pool cash "gifts" of $100.00 to join and to advance through various levels of a reverse pyramid through the recruitment of others who likewise make "gifts." The levels of the program are described as Freshman, Sophomore, Junior and Senior. Participants initiate a three-way telephone call with specified "managers" who will share positive "gifting" experiences to entice new prospects. Participants are led to believe they will ultimately receive a "tax free" payoff of $62,800.00 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 lower levels of the pyramid. Inevitably, these pyramids collapse when efforts to recruit new members fail, leaving a large number of unfortunate participants.

It is alleged that the gifting program misrepresents that the program is legal and that the “gift” is not taxable by the IRS. The IRS takes the view that such payments may, depending on the facts, be taxable.
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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.