A number of women in the Edmonton area could face criminal charges if they take part in a 'gifting club' fronting as an illegal pyramid scheme, police warned Wednesday.
The RCMP said Women Gifting Women is quickly becoming one of the most popular pyramid schemes in Alberta in recent years.
Const. James Moore said many women participating in the scheme do not even know it is illegal.
"This is 100 per cent illegal," he said. "If you give money into this and expect anything in return that is not a gift. Revenue Canada sees it as proceeds of crime and it is taxable."
The scheme involves large numbers of people scattered throughout the province. Participants are led to believe the scam is a gifting club that will help other women. Members are offered buy-ins ranging from $1,000 to $5,000.
Moore said the scheme is able to operate by getting people to recruit other family members and close friends.
"It's tight circles who are getting involved in this," he said. "These are gals who are bringing in very close friends and families who when they found out they are very upset because they brought them into something that is illegal."
The scheme also operates under the names Women Blessing Women and Circles of Friends.
Police said participants are being mislead through advice allegedly received from lawyers, Canadian Revenue Agency employees and police officers.
One woman, who was duped into joining the scam, said it was her sister-in-law who initially mentioned the gifting club to her.
"There was this thing of women helping each other make money," a woman who would only identify herself as Chantelle said. "All you had to is give $1,000 and you would get $8,000 in return."
Officials from the RCMP said their mission is to make people aware of the scam and that it could potentially result in criminal charges.
Moore said charges could happen "if people are still operating these schemes after we have made the point."
Participants are asked to call Crimestoppers.
With a report from CTV Edmonton's Rob McAnally
