According to the sources, as well as reports from other states, the model asks women to give $5,000 to the group in expectation of receiving $40,000 as more people join the groups and donate their $5,000. The groups also meet to talk about their lives, concerns, etc. As the financial part of the model requires ever-increasing numbers of new members if it's going to pay back others, it meets the definition of a pyramid scheme under several states' laws, specifically resembling the so-called Eight Ball scheme.
One of the women, a local business owner who refused to join the group, wrote to Xpress that the issue is “causing division among women in the community and conflicts when those approached do not want to join.”
State departments of justice in Oregon, Wisconsin, Michigan, New Mexico, New York, Colorado, and California, among others, have all targeted the practice as an illegal pyramid scheme, resulting in prosecutions or lawsuits. As far back as 2003, a Reader's Digest article noted the spread of the practice nationwide. It's even cropped up overseas, where the United Kingdom banned it in 2001.
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