Gifting Table Scam – Pyramid Scheme Exposed!

In the early 2000’s a lot of pyramid schemes were gaining attention and given the young nature of the internet at that time, a lot of people lost a big chunk of their savings to them. Sadly, despite the attempts taken by law enforcement agencies to create awareness regarding scams, people are still getting looted and the amount of loopholes seems to be growing.

So, to put an end to the fraudulent activities online, it is crucial to educate the masses or else, the number of victims will keep on growing. In this article, we are going to be exposing an infamous pyramid scheme called Gifting Table and the ways it employed to recruit new members.

By the time you go through this detailed post, we are sure that you will recognise the numerous ways to gauge any investment opportunity and more importantly learn about the options you have if you ever have lost money to them.

Gifting Table Scam - Pyramid Scheme

What is the Gifting Table Scam?

Gifting Table Scam was a very successful pyramid program that used to earn the people at the top of the chain as much as $40,000 for every new member recruited to the scheme. The program was intended to work as a means of earning non-taxable income.

At first, due to the fancy promises made by the creators and the passive aggressive lifestyle messages peddled by them, it easily got the attention of a lot of people. However, as most of us know there will never be a happy ending for illegal activities and this shiny scam was no exception to that rule.

The program was exposed as a pyramid structure in early 2011 and legal actions were taken against the people who facilitated the wrongful transactions. We are going to go over all the details of the lawsuit later in the review, but right now, we just wanted you to know that the people behind the MLM did pay for their mistakes.

After all, regardless of how clever a person might be, they will all leave some kind of bread crumbs behind which will expose all the dirty agendas and motives.

Legal Proceedings Connected to Gifting Table Scheme

All the pyramid schemes give utmost attention to recruiting new members quickly as that is the only way they can make money. Often people are attracted using fake income claims and other glittery things such as lavish luncheons and events.

Over the years, the ways used by the crooks to seduce the public have changed, but for the most part, if any scheme is making bold claims without solid proof, then it is time for you to get away from them. Note that there are a lot of legit MLM services which operate within the boundaries of the law. However, due to lack of awareness most people do not know how to differentiate.

Nonetheless, you should be aware that all pyramid schemes are illegal and if caught, the founders will face a lot of consequences. Moving on to the legal proceedings, for some unknown reason, we were not able to find the complete information and given the amount of drama it surrounds, it was somewhat expected.

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    Moreover, there are a lot of perspectives too and as the number of accused are more, we certainly know that it is going to take a long time to go through all of them. So, we are going to go over the highlights and then you can reach a firm conclusion about them.

    The main accusation for the people at the top of the scheme was regarding evading taxes and conducting borderline criminal activities. In the US, no taxes are applicable for gifts which amounts to less than $13,000. Now, the question was whether to look at the initial fee of $5,000 as a gift or an investment, because both of them need to be reported to the IRS in a different manner.

    While the defendants argued that their activities were totally legal, Ken Kelly, an economist with the FTC had an opposite view on the matter. After analysing all the data Ken Kelly said that only around 6% to 9% participants of the scheme will ever make money and their real cash flow comes in only when a new participant enters the scheme. Given the odds of 90% losses, no rational person would ever dare to proceed with them.

    Gifting Table Scam Operational Model

    In theory, the business model of Gifting Table sounds exciting and fun as it involves making exponential profits without putting in actual efforts. However, once you are familiar with the numbers behind the scheme, you would be terrified of it.

    Basically, all of the participants were required to put in a starting amount of $5,000 and the way the MLM was designed, it would give the person at the top a profit of $40,000. All of the participants were women and once anyone in the group reached the top line and exited a group with $40,000, they were free to start another group and keep on recruiting more people.

    Till now everything sounds reasonable, right? Here’s the issue, once the flow of funds gets stopped due to shortage of new clients, the entire scheme will inevitably collapse and all of the money put in by the newcomers will be gone.

    Obvious Flaws

    Traditionally regardless of whether you are selling a service or a product, it was all about bringing value to the end customer. In case of pyramid schemes, they don’t have anything valuable to offer to the participants.

    A vast majority of pyramid schemes just creates cash flow by using the money brought in by the new victims to pay out the old ones while skimming something on the top in the name of operational fees. For a pyramid scheme to last long, they need to have exceptional marketing abilities and even then they are all doomed eventually.

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    Given the facts and history of these types of deceptive platforms, we request our readers never to give them the benefit of the doubt despite the stories they peddle.

    TV Show and Popularity

    Hollywood seems to be very interested in adopting the stories from real life incidents especially when it involves a lot of drama. Though, the movies always exaggerate things and add some of their own creation to the mix, it cannot cross a certain line or else it will turn into a fantasy.

    The doc series “Murder on Middle Beach” depicts the story of the Gifting Table and judging by the amount of searches it got on the search engines, it indeed was a hit. All in all, there are a lot of controversies involved and as much time has passed, it is highly unlikely that we will ever find out the real cause of action or the answer to many daunting questions.


    This scam came to limelight in 2011 and at that time the internet was very immature and access to information was not that easy. Thanks to the advancement in literally everything digital that is not the case anymore. So, always research about the firms or organisations you are getting involved with and as a general rule avoid all kinds of firms which promise you enormous profits with little effort involved from your side.

    Remember, there is no such thing as free lunch in this world and if anyone begs to differ, then it is time to stop interacting with them. Gifting Table Scam is a thing of the past now, but more and more schemes like it are appearing on the internet on a daily basis.

    While reporting them to authorities like FTC and SEC does help, the people should also learn the basics of the online world to put a firm end to frauds.

    What do you think about the Gifting Table business model? Isn’t it obvious that it was just a cash grab for the creators of the scheme? Share your personal views on the matter by leaving a comment below.

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