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Pyramid and Ponzi schemes are illegal under New Mexico's Pyramid and Promotional Schemes Act. A pyramid scheme is a sales plan where a person makes what is essentially a worthless investment that is contingent upon procuring others who must also invest and procure other investors. Any return from the so-called investment is primarily derived from the new investor's money rather than from the sale of any goods, services, or property.
In New Mexico, it is a crime to establish, operate, advertise, or promote a pyramid scheme. The following is a quick summary of New Mexico's pyramid and Ponzi scheme laws.
The following table outlines New Mexico's pyramid and Ponzi scheme laws.
| Code Sections | NEW MEXICO STAT. ANN. § 57-13-3 |
| What is Prohibited? | Establishing, operating, advertising, or promoting a pyramid scheme |
| Penalties | Establishing, operating, advertising, or promoting a pyramid scheme is a fourth-degree felony punishable by up to 18 months in prison and up to $10,000 in fines. An injured party may file an action to recover damages and the court may also award interest, reasonable attorney's fees, and costs. The Attorney General may also seek a restraining order or injunction to stop a pyramid or Ponzi scheme. Additionally, the Attorney General may petition the court for restitution to victims as well as a civil penalty of up to $10,000 per violation of the Pyramid and Promotional Schemes Act. |
| Who Enforces these Laws? | The Attorney General enforces the prohibition of pyramid schemes in New Mexico. However, the Attorney General may delegate this authority to local district attorneys. |
| Where Can Victims Get Help? | If you think you may be a victim of a pyramid or Ponzi scheme, report it to the New Mexico Attorney General by filing a complaint. You can also contact the New Mexico Attorney General's office by calling any of the following telephone numbers: Santa Fe: (505) 827-6000 Albuquerque: (505) 222-9000 Las Cruces: (575) 526-2280 |
Pyramid and Ponzi scheme laws can be confusing. If you have been accused of participating in a pyramid or Ponzi scheme, you can contact a New Mexico criminal defense attorney for help. If you would like legal assistance with a consumer fraud matter, you can contact a New Mexico consumer protection attorney. You can also visit FindLaw’s sections on Fraud and Consumer Protection for more articles and information on this topic.
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