Posted on: Friday, March 7, 2003

Woman may be fined in 'gifting circle' scheme

Advertiser Staff

A hearings officer is considering a state request to fine a Big Island woman $90,000 for allegedly running illegal pyramid investment schemes known as "women's gifting circles.''

An administrative hearing on a securities complaint against Marlene Vintero was held in Hilo last week, and hearings officer Sheryl Nagata is expected to issue a recommendation to state Securities Commissioner Ryan Ushijima for final action.

The state Department of Commerce and Consumer Affairs accused Vintero of operating four gifting circles on the Big Island and cheating at least 20 women out of thousands of dollars.

Eighteen women testified at the administrative hearing about their participation in gifting circles. Three of them said they gave Vintero money at Vintero's Hilo business.

In her defense, Vintero testified that like the other women, she was simply a participant in the gifting clubs.

The state issued a cease-and-desist order against Vintero and four gifting circles in July 2001. A hearing originally scheduled for late 2001 was postponed because of Vintero's pregnancy.

According to the state, Vintero asked prospective gifting circle members to invest up to $5,000 with the promise of receiving up to $40,000 in return.

Officials said new members gave cash "gifts'' to the highest-ranking club members with the promise that they, too, would rise to the top and receive money — far more than they initially paid — from newly recruited club members.

Like most pyramid schemes, these clubs must continually recruit an ever-increasing number of members to survive. When the clubs don't attract enough new members, they collapse, and most participants lose everything they paid to join the club.