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.
|What is Prohibited?||
Knowingly participating in, organizing, establishing, promoting, or administering a pyramid scheme
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.
Contact a qualified attorney.