{"id":374299,"date":"2016-04-11T01:22:51","date_gmt":"2016-04-11T06:22:51","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/state\/minnesota-law\/minnesota-pyramid-and-ponzi-scheme-laws.html"},"modified":"2016-06-20T00:00:00","modified_gmt":"2016-06-20T05:00:00","slug":"minnesota-pyramid-and-ponzi-scheme-laws","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/state\/minnesota-law\/minnesota-pyramid-and-ponzi-scheme-laws.html","title":{"rendered":"Minnesota Pyramid and Ponzi Scheme Laws"},"content":{"rendered":"\n
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Minnesota 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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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

Pyramid schemes are illegal business plans involving compensating people for enrolling new members into the scheme, rather than for selling a product or service to the public. Ponzi schemes are similar in that they’re an investment pyramid scheme<\/a> with early investors being paid by money obtained from later ones. However, in the end, most investors lose their money. Both Pyramid and Ponzi schemes<\/a> are well-known white collar crimes<\/a>, mostly due to famous criminals like Bernie Madoff<\/a>.<\/p>\r\n

Minnesota isn\u2019t immune to this type of crime. In 2014, a Minneapolis area financial planner, Sean Meadows<\/a>, was charged in federal court for a more than $10 million dollar Ponzi scheme. Also, in 2013, the Minnesota Department of Commerce ordered an international pyramid scheme company, Profitable Sunrise<\/a>, to stop selling investments in the state. The company was selling investments without a securities license. While Ponzi and pyramid schemes often cross state lines, and are therefore typically federal crimes, Minnesota also has laws prohibiting these types of crimes.  <\/p>\r\n

Minnesota Pyramid and Ponzi Schemes: Statute<\/h2>\r\n

The following table details Minnesota\u2019s main pyramid and Ponzi scheme law.<\/p>\r\n\r\n
Code Section<\/b><\/td>\r\nMinnesota Statutes Section 325F.69(2) \u2013 Unlawful Practices: Referral and Chain Referral Selling Prohibited<\/a><\/td>\r\n<\/tr>
What is Prohibited?<\/b><\/td>\r\nPyramid schemes are illegal in Minnesota under the consumer protection laws. Specifically it\u2019s prohibited to:
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Penalties<\/b><\/td>\r\nChain referral or pyramid schemes violations are gross misdemeanors<\/a>. Gross misdemeanors can be punished by up to one year imprisonment and up to a $3,000 fine.<\/td>\r\n<\/tr>
Where Can Victims Get Help?<\/b><\/td>\r\nMinnesota residents can file complaints about chain referral, pyramid, or Ponzi schemes or securities frauds with the Minnesota Attorney General\u2019s Office<\/a> and the Minnesota Department of Commerce<\/a>. The exact forms to complete or agency to call may vary based on the specifics of your situation. Please call 1-800-657-3787 for the Attorney General\u2019s Office or 1-800-657-3602 for the Department of Commerce with any questions.
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\r\nIf you\u2019ve lost money to a pyramid or Ponzi scheme, you could consider seeking compensation<\/a> in civil court, in a bankruptcy case of the scammer, or by claiming the loss on your taxes. For help with this, consult with an experienced local civil litigation attorney<\/a> or tax attorney<\/a>.<\/td>\r\n<\/tr>
Where Can Accused Perpetrators Get Help?<\/b><\/td>\r\nIf you or a loved one is charged with a pyramid scheme or securities fraud related crime, you should consult with an experienced Minnesota criminal defense attorney<\/a> or your appointed public defender<\/a> as soon as possible.<\/td>\r\n<\/tr><\/tbody><\/table>\r\n

Note:<\/i><\/b> State laws change frequently, it\u2019s important to verify the accuracy of the laws you are researching.<\/i><\/p>\r\n

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