‘Birth­day gift­ing ’ pitch pyra­mid scheme, po­lice say

St. Thomas Times-Journal - - LOCAL NEWS - DAN BROWN

You’re in­vited to a birth­day party by a fam­ily mem­ber, friend, co-worker or ac­quain­tance and asked to give a cash gift of $5,000. The or­ga­niz­ers prom­ise you then will move up the ranks of the “birth­day gift­ing cloud,” and when it’s your turn at the top, you’ll get $40,000 from a group of new re­cruits.

In Canada, you are as­sured, tax law al­lows for cash gifts.

De­spite the trap­pings of le­git­i­macy, it’s an old-fash­ioned pyra­mid scheme and it’s il­le­gal.

On Mon­day, Lon­don po­lice busted one such birth­day party in Lam­beth, lay­ing charges of con­duct­ing or manag­ing a pyra­mid scheme against two Lon­don res­i­dents.

These kinds of get-rich-quick scams have been around for decades, crime ex­perts say, and while con­sumers have grown more savvy, so have scam­mers.

“The story sounds be­liev­able, right? Be­cause they’re us­ing this idea of a gift,” said Derek Silva, a pro­fes­sor of crim­i­nol­ogy at King ’s Univer­sity Col­lege. “Part of it is that emo­tional pull. It sounds nice. And it sounds like it could work.”

Ex­cept par­tic­i­pants rarely get to the top of the peck­ing or­der.

“Only the peo­ple at the top of the pyra­mid profit from this scheme and or­ga­niz­ers will of­ten in­ject them­selves back into the pyra­mid at up­per lev­els to profit more, leav­ing those wait­ing for their ‘birth­day’ to wait even longer,” Lon­don po­lice said.

At the heart, Silva says, is of­ten a charis­matic man or woman sell­ing the idea of fast money.

“At the end of the day, they’re sell­ing some­thing,” he said. Brand­ing it as a “birth­day gift­ing cloud” gives it an air of le­git­i­macy.

The “cloud” part, Silva said, also is de­signed to put po­ten­tial vic­tims at ease. Big com­pa­nies such as Ap­ple and banks have clouds.

“I think that the strate­gies have prob­a­bly changed a lit­tle bit,” from early pyra­mid schemes, Silva said, be­cause con­sumers are “a lit­tle bit more skep­ti­cal to­day than we have ever been. I do think that, in gen­eral, we are more ed­u­cated about these things.” How­ever, so are the crim­i­nals. In this case, the 16 mem­bers of the scheme were told to use nick­names, po­lice say.

When it comes to grift­ing, there’s noth­ing new un­der the sun, said Const. Travis Buckle, a spokesper­son for Lon­don po­lice.

“With any type of scheme, there’s only so many ways they can get money from peo­ple. If it’s a type of scheme where there’s money to be made, peo­ple are go­ing to con­tinue do­ing it,” he said.

He urged other peo­ple who have taken part in the scheme to come for­ward. “I think the key thing to re­mem­ber here is peo­ple need to be vig­i­lant with their fi­nances.”

As a re­sult of this in­ves­ti­ga­tion, Bernard Baratta, 72, and Shak­ila Bayat, 51, are charged. They will ap­pear in court on Jan. 7.

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