Pyramid and Ponzi schemes are specifically outlawed in West Virginia. A pyramid scheme is a sales plan or device where a person makes what is essentially a worthless investment that is contingent upon enlisting others who must also invest and enlist other investors. Any return from the so-called investment is primarily derived from the new investors' money rather than from the sale of any goods, services, or property.
In West Virginia, it is a crime to promote a pyramid scheme. The following is a quick summary of West Virginia's pyramid and Ponzi scheme laws.
West Virginia Pyramid and Ponzi Scheme Laws
The following table outlines West Virginia's pyramid and Ponzi scheme laws.
W. VA. CODE § 47-15-1 et seq.
|What is Prohibited?
Promoting a pyramid scheme
Promoting a pyramid scheme is a misdemeanor punishable by up to 6 months in prison and up to $1,000 in fines.
The Attorney General or county prosecuting attorney 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 or county prosecuting attorney.
|Where Can Victims Get Help?
If you think you may be a victim of a pyramid or Ponzi scheme, report it to the West Virginia Attorney General by filing a complaint.
You can also contact the West Virginia Attorney General's consumer protection division by contacting the following:
Toll free: 1-800-368-8808
Mailing address: P.O. Box 1789, Charleston WV 25326
West Virginia Pyramid and Ponzi Scheme Laws: Related Resources
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 West Virginia criminal defense attorney for help. If you would like legal assistance with a consumer fraud matter, you can contact a West Virginia consumer protection attorney.
You can also visit FindLaw’s sections on Fraud and Consumer Protection for more articles and information on this topic.