Utah Pyramid and Ponzi Schemes Laws

In Utah, pyramid and Ponzi schemes are illegal under the Pyramid Scheme Act. A pyramid scheme is a sales device or 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, thereby perpetuating a chain of people.

The Beehive State outlaws participating in, organizing, establishing, promoting, or administering a pyramid scheme. Pyramid or Ponzi schemes are also considered deceptive acts or practices prohibited under Utah's Consumer Sales Practices Act. The following is a quick summary of Utah pyramid and Ponzi scheme laws.

Utah Pyramid and Ponzi Scheme Laws

This table outlines pyramid and Ponzi scheme laws in Utah.

Code Sections

UTAH CODE ANN. §§ 76-6a-4, 13-11-4

What is Prohibited?

Knowingly participating in, organizing, establishing, promoting, or administering a pyramid scheme

Penalties

Knowingly organizing, establishing, promoting, or administering a pyramid scheme is a third-degree felony punishable by up to 5 years in prison and up to $5,000 in fines.

Knowingly participating in a pyramid scheme and receiving compensation for procuring other investors is a Class B misdemeanor punishable by up to 6 months in prison and up to $1,000 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.

A pyramid or Ponzi scheme is also a deceptive act or practice and under the Consumer Sales Practices Act, the Division of Consumer Protection may issue a cease-and-desist order and impose up to $2,500 in administrative fines for each violation.

The Division of Consumer Protection may also seek a restraining order or injunction to stop a pyramid or Ponzi scheme. If the injunction is violated, the court may impose up to $5,000 each day in fines for each violation.

Who Enforces these Laws? The Attorney General enforces the prohibition of pyramid schemes in Utah.
Where Can Victims Get Help?

If you think you may be a victim of a pyramid or Ponzi scheme, report it to the Attorney General by filing a complaint:

Telephone number: 1-800-244-4636

Address: 350 North State Street, Suite 230, Salt Lake City, Utah 84114

Utah Pyramid and Ponzi Scheme Laws: Related Resources

Pyramid and Ponzi scheme laws can be complicated. If you have been accused of participating in a pyramid or Ponzi scheme, you can contact a Utah criminal defense attorney for help. If you would like legal assistance with a consumer fraud matter, you can contact a Utah consumer protection attorney. You can also visit FindLaw’s sections on Fraud and Consumer Protection for more articles and information on this topic.

Next Steps: Search for a Local Attorney

Contact a qualified attorney.