{"id":372132,"date":"2016-04-11T01:21:48","date_gmt":"2016-04-11T06:21:48","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/state\/connecticut-law\/connecticut-pyramid-and-ponzi-scheme-laws.html"},"modified":"2016-06-20T13:57:00","modified_gmt":"2016-06-20T18:57:00","slug":"connecticut-pyramid-and-ponzi-scheme-laws","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/state\/connecticut-law\/connecticut-pyramid-and-ponzi-scheme-laws.html","title":{"rendered":"Connecticut Pyramid and Ponzi Scheme Laws"},"content":{"rendered":"\n
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Connecticut Pyramid and Ponzi Scheme Laws<\/h1>\n
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Created by FindLaw’s team<\/a> of legal writers and editors<\/i><\/p>\n\n | Last updated\n

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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

In the Nutmeg State, there are various laws which prohibit pyramid and Ponzi schemes. A pyramid scheme<\/a> is the sale of goods, services, or rights in exchange for an investment which is contingent upon procuring others who must also do the same, thereby perpetuating a chain of people in the scheme. Those who invest in the scheme get little or nothing for their investment.<\/p>\r\n

Pyramid and Ponzi schemes are deceptive trade practices and therefore falls under the Connecticut Unfair Trade Practices Act which is subject to additional penalties. This is a quick summary of Connecticut pyramid and Ponzi scheme laws.<\/p>\r\n

Connecticut Pyramid and Ponzi Scheme Laws<\/h2>\r\n

This table outlines pyramid and Ponzi scheme laws in Connecticut.<\/p>\r\n\r\n
Code Sections<\/b><\/td>\r\n

CONN. GEN. STAT. \u00a7\u00a7 42-140<\/a>, 42-145<\/a><\/p>\r\n

Connecticut Unfair Trade Practices Act<\/a><\/p>\r\n<\/td>\r\n<\/tr>

What\u2019s Prohibited?<\/b><\/td>\r\n

Advertising the sale of goods, services, or rights or actually selling goods, services, or rights in exchange for a rebate or some other return on investment, which is contingent upon procuring others who must also pay a fee or invest and procure others to do the same.<\/p>\r\n

A home seller offering to give a commission or rebate to the buyer in exchange for the buyer giving names of prospective purchasers or otherwise aiding in a sale to another person.<\/p>\r\n

Engaging in unfair methods of competition or unfair or deceptive acts or practices in the conduct of any trade or commerce.<\/p>\r\n<\/td>\r\n<\/tr>

Penalties<\/b><\/td>\r\n

Injured parties have a right to sue for restitution and seek damages in addition to recovering any costs and reasonable attorney’s fees either separately or as a class action lawsuit.<\/p>\r\n

Unfair trade practices are punishable by up to $5,000 for each violation.<\/p>\r\n

The Commissioner of of Consumer Protection may also request that the Attorney General obtain an injunction. If the injunction is violated, the Attorney General may seek up to $25,000 in fines for each violation.<\/p>\r\n

Pyramid schemes involving home sales are Class C misdemeanors<\/a> subject to up to 3 months in prison and up to $500 in fines in addition to any of the above penalties.<\/p>\r\n<\/td>\r\n<\/tr>

Who Enforces these Laws?<\/b><\/td>\r\nThe Commissioner of Consumer Protection<\/a> enforces the prohibition of pyramid schemes in Connecticut.<\/td>\r\n<\/tr>
Where Can Victims Get Help?<\/b><\/td>\r\n

If you think you may be a victim of a pyramid or Ponzi scheme, report it to the Commissioner of Consumer Protection by filing a complaint<\/a>:<\/p>\r\n

Within Hartford and Outside Connecticut: 1-860-713-6100<\/p>\r\n

Toll-Free in Connecticut: 1-800-842-2649<\/p>\r\n

Address: 165 Capital Avenue, Hartford, Connecticut 06106<\/p>\r\n<\/td>\r\n<\/tr><\/tbody><\/table>\r\n

The best way to protect yourself from a pyramid or Ponzi scheme is to know the signs<\/a>. It is important to become informed about the company in which you are planning to invest.<\/p>\r\n

Connecticut Pyramid and Ponzi Scheme Laws: Related Resources<\/h2>\r\n

Pyramid and Ponzi schemes are complex and the laws which prohibit them can be confusing. If you have been accused of participating in a pyramid or Ponzi scheme and need help, you can contact a Connecticut criminal defense attorney<\/a>. If you would like legal assistance with a consumer fraud matter, you can contact a Connecticut consumer protection attorney<\/a>. You can also visit FindLaw\u2019s sections on Fraud<\/a> and Consumer Protection<\/a> for more articles and information on this topic.<\/p>\r\n

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