District of Columbia Pyramid and Ponzi Scheme Laws
Both pyramid and Ponzi schemes are fraudulent activities that seek out investors to put forth a set amount of money upfront for the right to recruit other investors. The initial investors split the money that the new investors bring in until there are no more investors and the cash flow runs dry. When the scheme eventually folds, the later investors are left with nothing. While there are slight differences between a pyramid and Ponzi scheme, the goal of swindling investors out of their money is essentially the same. This is a quick summary of the laws prohibiting pyramid and Ponzi schemes in the District of Columbia.
District of Columbia Pyramid and Ponzi Scheme Laws: Overview
The District of Columbia considers pyramid and Ponzi schemes to be forms of fraud. These acts are therefore punished under the District's criminal statutes. The following table outlines the specifics of District of Columbia pyramid and Ponzi scheme laws.
District of Columbia pyramid and Ponzi scheme laws fall under the District's criminal statutes. Since these schemes swindle people out of money by using false representations and promises, these systems constitute acts of fraud.
Fraud in the first degree: A person commits the offense of this crime if that person engages in a scheme or systematic course of conduct with intent to defraud or to obtain property of another by means of a false or fraudulent pretense, representation, or promise and thereby obtains property of another or causes another to lose property.
Fraud in the second degree: A person commits this crime if that person engages in a scheme or systematic course of conduct with intent to defraud or to obtain property of another by means of a false or fraudulent pretense, representation, or promise.
False promise as to future performance: Fraud may be committed by means of false promise as to future performance which the accused does not intend to perform or knows will not be performed.
A conviction of fraud in the first degree can result in a fine of up to $5,000 or three times the value of the property obtained (whichever is greater), imprisonment for up to 10 years, or both.
A conviction of fraud in the second degree can result in a fine of up to $3,000 or three times the value of the property which was stolen (whichever is greater), imprisoned for up to three years, or both.
If you are a victim of a pyramid or Ponzi scheme, you can file a complaint with the Department of Insurance, Securities and Banking. If you have been accused of violating District of Columbia financial fraud laws and would like further legal assistance, you can contact a District of Columbia criminal defense lawyer through FindLaw. Visit FindLaw's sections on fraud and financial crimes for more articles and information on this topic.
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