Some form of a pyramid and Ponzi scheme have plagued consumer markets for decades. While there are slight differences between a pyramid and Ponzi schemes, the end goal is the same: to swindle people out of their money to payout one or a handful of "initial investors" within the scheme. The Vermont's attorney general has vast power to create rules to deter these type of fraudulent consumer practices. This is a quick summary of the pyramid and Ponzi scheme laws in Vermont.
Punishments Under Vermont Pyramid and Ponzi Schemes Laws
The following table outlines the specifics of Vermont pyramid and Ponzi scheme laws.
| Code Sections | 9 V.S.A. §2453: Practices Prohibited; Antitrust And Consumer Protection Attorney General's Consumer Protection Rules 103: Chain Distribution Schemes 13 V.S.A §2002: False Pretenses |
| Consumer Protection | Under Vermont pyramid and Ponzi scheme laws, "chain distributor schemes" are defined as a sales device where a person pays an initial investment to obtain a license or right to recruit additional people for profit or economic gain. These additional people are also granted a license or right upon making an investment. This chain continues until no more recruits are signed and the scheme collapses on itself. According to Vermont's consumer protection rules, the promotion or offer of participation in a chain distributor scheme in connection with the solicitation of investments from members of the public is an unfair and deceptive trade act and practice in commerce. |
| False Pretenses | In addition to charges by the Attorney General, violators of Vermont pyramid and Ponzi scheme laws may also face criminal charges. A person who by false pretenses and with intent to defraud, obtains from another person money or other property to a written instrument can be punished by the state. |
| Statutory Rape | No person shall engage in a sexual act with a child who is under the age of 16, except:
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| Civil Penalties | Any consumer who contracts in reliance upon false or fraudulent representations or practices prohibited by the Attorney General of Vermont may sue and recover from the seller the amount of his or her damages, reasonable attorney's fees, and punitive damages not exceeding three times the value of the investment given by the consumer. |
| Criminal Penalties | If the money or property obtained exceeds $900, a conviction of false pretenses carries a punishment of up to 10 years in prison, a fine of up to $2,000, or both, If the money or property obtained is valued at $900 or less, the crime carries a punishment of up to one year in prison, a fine up to $1,000, or both. |
If you are a victim of a chain distribution scheme, you can file a complaint with the Vermont Attorney General's Office. If you have been accused of violating Vermont pyramid and Ponzi scheme laws and would like further legal assistance, you can contact a Vermont criminal defense lawyer through FindLaw. Visit FindLaw's sections on pyramid and Ponzi schemes and other fraud and financial crimes for more articles and information on this topic.
