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Posted in reply to the post by rossmen:
Le’a Gleason
Author’s Note: The names of the women interviewed have been changed to protect their anonymity.
In recent months, an underground business called ‘Women’s Gifting Circles’ has made its way across East Hawaii, dividing people who disagree on the touchy subject of this investment model. To some it’s a ‘pyramid scheme,’ while others see it as a smart investment in a good cause.
According to a statement from the Federal Trade Committee (FTC) in 1998, “Pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public.”
The statement elaborates that pyramid schemes are punishable by state and federal law in a variety of ways.
“The U.S. Department of Justice, in collaboration with investigative agencies like the FBI, prosecutes pyramid schemes criminally…At the Commission, we bring cases against pyramid schemes under the FTC Act, which broadly prohibits ‘unfair or deceptive acts or practices in or affecting commerce’,” it says.
‘Gifting circles’ are not a new concept, and in fact were rumored to be happening in Hawaii in the late eighties and nineties.
While some are co-ed, the women’s versions are marketed as a way to empower women financially through a tiered investment model, described with the analogy of dinner courses. At the bottom are eight ‘appetizers,’ who each donate $1,400. Above them are four ‘soup and salads’ and two ‘entrees.’ The woman at the very top is the ‘dessert,’ who collects $11,000. Then, the circle splits in two and each ‘entrée’ becomes the top of her own circle. In order for each woman to move up a level, the group must find eight more women. For one of the original eight women to become a ‘dessert,’ only 24 new women must be recruited. However, for every one of the original eight women to reach the top, a total of 192 women must be recruited. And for every one of the eight women from each new circle to receive their ‘gift,’ numbers quickly shoot into the thousands.
Methods of recruitment and the unlikely return of the original investment have some women in the community concerned. In addition, women who are members are told not to speak publicly about their involvement. Circles have secret phone meetings where they discuss what they’ll do with the money, and exchange email called ‘hush mail.’
Karen Souza became concerned when several women recruited her aggressively. She was first contacted about six months ago by a friend on the Mainland, and then was approached two separate times on-island.
“This old friend of mine who I haven’t spoken with in years… ended up calling and said ‘I have something really exciting I wanna tell you but you have to promise you won’t tell anyone’. It could’ve been anything but there was something that raised a red flag immediately,” Souza said.
She explained that the woman was “pushing to keep her on the phone,” and to arrange a time when they could talk further.
From another woman, she received an email including a document detailing how the circle would work. In Souza’s case, it was called a “Wisdom Circle” and each woman was asked to donate $5,000, totaling $40,000 for the woman at the top. The document explained that the women need-not pay taxes, as the IRS allows up to a $12,000 gift.
It read, “Our intention is to benefit women, PERIOD. We have discovered a way …to help women begin manifesting a solid financial foundation for their families and their projects. We have joined together in a sisterhood that is truly sacred community. Those who can accept that the true energy of intention is everything, will understand the energetic foundation of the Women’s Wisdom Circle.”
It continued, “Limited by language, it is hard to convey the full nature of The Women’s Wisdom Circle; however, please know that by inviting you, we are asking you to receive support. Go within to a quiet centered place, use your intuition and make your decision.” To Souza, the email was very upsetting.
“This language is targeting women who are trying to live a spiritual life. Anybody who’s not 100 percent confident in themselves is going to be susceptible. I’m struggling and all these women I know are basically living close to poverty and the chance to have a chunk of money to better themselves, that’s basically irresistible. Who’s responsible for this? I would love to see that person go to jail,” Souza said.
Similar recruiting situations were true for Jennifer Willis, Kathleen Okuza, and Kanani Tavares. Each woman claims to have been “pushed” towards joining the circle.
“I know a handful of smart women who have unfortunately put money towards this ‘circle.’ It is hard to say no when your good friends are asking you to join, whom you believe to be smart and kind-hearted people,” Willis said. Willis named one woman involved at an upper-level as a “well known” member of the empowered, strong, hippie, female community. “Allegedly she has made over $50,000 and has ‘rejoined’ the circle three times,” she said. The same woman was mentioned by three other sources as someone who pushed them to join.
In Okuza’s case, it seemed enticing so she agreed.
“When I wanted to figure out my finances for the ‘gift,’ they got very pushy. The leader sent me a couple text-messages with exclamation points. As time went by and I wasn’t ‘gifting’ it was like ‘when are you going to give the gift? Get back to me now. I’m going to check in with you. When can I?’ And then I said ‘you’re harassing me for money and I don’t appreciate it’,” Okuza said. Tavares was also approached several times.
“It’s so insidious how they do this in Puna. I think it’s really cruel that they’re using that language to try to entice women. I get that. The idea of helping my sisters out is appealing to me,” she said, adding that the financial effects are “devastating.” “I think that’s possibly one of the most upsetting aspects of this whole gifting circle. This is the Big Island. Nobody’s particularly loaded, especially in our age group. I would have such a hard time accepting money from women knowing it was screwing them over in the process. It’s crazy, it’s illegal and it’s predatory,” Tavares said.
But member Lisa Janneson feels that membership is voluntary and the risks are made clear. Janneson was “sponsored” into the circle, meaning that a friend paid for her. If Janneson makes it to the top, her friend gets half of the $11,000.
“It was your decision to get involved in the first place. You never know what’s gonna happen, even when you give your money to a legitimate accountant they might take your money and launder it. You’re investing it in a woman. That woman is going to take that money and use it to better her life. It’s an investment in somebody else,” Janneson said. She explained that her circle is mainly comprised of people she knows, and she was invited by someone she can trust.
“I definitely haven’t had any negative experience. I think there’s an issue in our culture about people being able to trust. The whole idea behind the women’s circle…it’s like the amount of faith you can manifest for it is how it works. I think that’s really scary for some people, being able to have that faith,” Janneson said.
Neither the Pahoa or Hamakua Police departments have records of specific police reports regarding the circles, nor do police chiefs say they have any knowledge of what’s going on. According to media relations, were reports filed, they would be theft reports which would get lost amongst many other reports. The Hilo Police Chief was unable to be reached for comment. Also unavailable for comment was County Prosecutor Mitch Roth. Upon contacting his office, a representative said that Roth “no longer handles community prosecuting.”
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