A classic pyramid scheme has duped a number of women in the northern rivers by cloaking itself in themes of new-age spirituality and women’s empowerment.
Calling upon the power of sisterhood, the ‘Women’s Wisdom Circle’ invites women to part with a $5,000 ‘unconditional gift’ to join as a ‘seed’ with the lure of an eventual $40,000 if they ultimately blossom into a ‘lotus’.
If this sounds too good to be true, it is. The Circle is the latest version of the classic pyramid scam that has been doing the rounds for decades. The schemes inevitably collapse, leaving the vast majority of ‘seeds’ out of pocket.
Similar schemes have operated since the 90s, spreading like spot fires, and it is illegal to originate or even to participate in them.
Echonetdaily attempted to contact the proponents of the Women’s Wisdom Circle yesterday, via their website. Every link on the site that purported to provide a contact led to a ‘page not found’ failure message. Evidently the scheme’s proponents do not want to be found – or found out.
What the Circle promises
An Echo source, who wishes to remain anonymous, was recently invited to join the Circle. An introductory document sent to them via an encrypted email address states: ‘By joining our circle of women you enter a magnified creative field where the art of giving and receiving is balanced and aligned to support the flourishing of our soul’s purpose and deepest heart’s longing’.
Having joined the Circle, a ‘seed’ then recruits two more ‘seeds’ with $5,000 each and grows into a ‘sapling’. The new ‘seeds’ in turn find two more seeds and the sapling ‘blossoms’. After one more round, the original invitee becomes a ‘lotus’ and receives a $5,000 ‘gift’ from each of the eight incoming seeds beneath them, totalling $40,000 (see diagram). The Circle then splits and those next in line wait for eight more recruits before becoming their own lotus.
According to the ACCC website: ‘Pyramid schemes are an illegal and very risky get-rich-quick scheme. In a typical pyramid scheme, a member pays to join. The only way for the member to ever recover any money is to convince other people to join up and to part with their money as well.’
The defining feature of a pyramid scheme, and its relative, the ponzi scheme, is that no actual value is being created. Money from the majority at the bottom of the ‘Circle’ is simply redistributed to the minority at the top – exactly the hierarchical structure the sisterhood wars against.
Why it will collapse
Collapse is inevitable. It is basic mathematics. In order for the first ‘lotus’ to receive their $40,000, eight ‘seeds’ in the Circle must part with $5,000 each.
If each of these seeds is to reach the ‘lotus’ position, 64 new ‘seeds’ must be found. For these to get their payout/gift, 512 recruits (and $2.56 million) are required. Within two more generations the number of recruits would exceed the female population of Byron Shire, and within three more, of Australia. It is inevitable that the scheme runs out of new recruits, and when it does, anyone who has not been ‘gifted’ is left hanging.
The whistleblower resident added, ‘Sadly, it’s generally the well-heeled, well-connected and charismatic women – women who are regarded as spiritual leaders of the sisterhood – who complete their circle and “blossom”. It’s the women who come in late, and often out of desperation, who are usually left hanging. This preys upon trust and goodwill nurtured over decades, throws spirituality onto the pyre, and sacrifices the lot for a quick buck.’
The Women’s Circle is careful to state that the $5,000 entrance cost is an ‘unconditional gift’, made with ‘no expectation of return’. Otherwise, even they admit, the ACCC would crack down.
The Circle’s originators claim that ‘Since the early 1980s, this circle has remained unbroken, and has grown in numbers, strength and integrity’.
Yet identical schemes with different names in the US, UK and Australia have shattered, leaving thousands ripped off and manipulated. It is only a question of time before the same thing happens here.
A revealing report by a woman caught in a ‘Women’s Empowerment Circle’ can be found at: http://www.realitysandwich.com/womens_circle_pyramid.