Matt Rosendale, the state Commissioner of Securities & Insurance and Montana State Auditor, is warning Montanans to watch out for a pyramid scheme making the rounds on Facebook and Facebook Messenger.
The scheme is called the “Friendsgiving Network” on Facebook and involves recruiting friends to buy into the bottom of a pyramid for $100.
Once the pyramid is filled up with new participants, the person at the top takes $800. The two people at the second tier of the pyramid each become the top of two new pyramids, and the process repeats. It is primarily operating within private group chats on the Facebook Messenger app.
The scheme, which is being pitched as a “tournament” or “friends helping friends” make money online, involves participants both in and outside of Montana, including Flathead County and likely Gallatin County.
As the State Auditor’s Office investigates the matter, Rosendale warns Montanans that the “Friendsgiving Network” is an illegal pyramid scheme.
“Pyramid schemes like these are against the law because they always fail once the pool of new recruits runs out. People at the top of the pyramids make money, but the newest participants lose everything they’ve put into the pyramid,” Rosendale said in a press release.
“Montanans should not participate in these type of schemes, and remember: if an opportunity to make money sounds too good to be true, it probably is,” he added.
The Office of the Montana State Auditor is the criminal justice agency that licenses, regulates, investigates, and prosecutes securities matters in Montana in its role as Securities Commissioner. Rosendale encourages Montanans to report suspicious or suspected fraudulent activity to his office.
More information on pyramid schemes, securities fraud, and how to report suspected fraud is available on the Commissioner’s website.