For decades, pyramid and Ponzi schemes have been tricking Alaskan investors out of their money with fraudulent investment opportunities. In an attempt to stifle these types of white collar crimes, the Alaska pyramid and Ponzi scheme laws hand down civil and criminal punishment for those running these investment deals. This is a quick summary of pyramid and Ponzi scheme laws in Alaska.
Regulating Alaska Pyramid and Ponzi Schemes
Alaska's Pyramid and Ponzi scheme laws define theses acts in the Unlawful Acts and Practices section as "chain distributor schemes."; The following table outlines the specifics of Alaska Pyramid and Ponzi scheme laws.
Alaska Stat. § 45.50.471 Unlawful Acts and Practices
Alaska Pyramid and Ponzi schemes are defined as a sales device whereby a person, upon condition that the person makes an investment, is granted a right to solicit or recruit additional persons for a profit. These additional recruits are also granted a right upon condition of making an investment and may further perpetuate the chain of persons. The invested money is paid to as profits to persons higher up the pyramid. Newer investors usually will not see any profit on their investment before the scheme collapses on itself.
The attorney general of Alaska may recover a civil penalty of not less than $1,000 and up to $25,000 for each violation.
Under the Alaska theft by deception laws, if the theft is $25,000 or more, the crime classifies as a class B felony. This class of felony is punishable by up to 10 years in prison, up to $100,000 in fines, or both.
A scheme that takes less than $25,000 but $500 or more is classified as a class C felony. This class of felony is punishable by up to five years in prison, a fine of up to $50,000, or both.
If the Alaska Pyramid scheme makes $50 or more but less than $500, then it is considered a class A misdemeanor. This class of felony is punishable by up to one year in prison, a fine of up to $10,000, or both.
Steering Clear of Alaska Pyramid and Ponzi Schemes
Knowing what to look for in a pyramid or Ponzi scheme is the first step in making sure that you are making safe investments. The Federal Trade Commission provides ways for investors to identify these schemes before the they get sucked in.
If you have been accused of participating in a pyramid or Ponzi scheme, you can contact an Alaska criminal defense attorney. If you would like legal assistance with a consumer fraud matter, you can contact an Alaska consumer protection attorney. You can also visit FindLaw’s sections on Fraud and Consumer Protection for more articles and information on this topic.