Pyramid participants to help State
Auditor with investigation
Great Falls residents Heidi
Wadsworth and Georgia Wadsworth each have agreed to assist the
State Auditor's Office in its investigation of an illegal
pyramid scheme, and pay restitution and a $5,000 administrative
fine with all but $500 suspended, in a consent agreement with
the State Auditor's Office involving their alleged involvement
in a pyramid scheme.
In May, State Auditor John
Morrison issued a cease and desist order against the Wadsworths
for their participation in the gifting program Women Helping
Women. Gifting programs are pyramid schemes that are
specifically outlawed by state law.
"We are pleased with
the timely resolution of this matter and appreciate that Heidi
and Georgia have agreed to cooperate with our efforts to stop
this illegal activity in Montana," said Morrison,
Montanan's Securities Commissioner. "There is a finite
number of people available for recruitment into these programs
and we need to shut them down before more Montanans are cheated
out of their hard-earned income."
Pyramid schemes are
fraudulent because nothing of value is purchased or sold when a
person joins the program. Rather, the money is
"recycled" to existing program participants.
Continuation of the program is dependent upon new recruits.
Eventually, the pool of people available for recruitment dries
up and the pyramid collapses so the people on the lower pyramid
tiers never get their money back, let alone make a profit.
The Women Helping Women
pyramid consists of four levels. There are eight spots on the
fourth level, four on the third level, two on the second and one
on the first. The individual or individuals on each spot of the
fourth level were to provide $3,000 (for a total of $24,000) to
the person or people on the first level. The first level
disappears after the money is exchanged and the pyramid splits
in two. The two spots on the second level become the top level
of two separate pyramids. The goal at that point is to recruit
participants to donate $3,000 for spots on the bottom level of
each of the new pyramids.
The May 6 cease and desist
order alleged that Heidi Wadsworth held a recruitment meeting in
her home with 80 to 100 women in attendance. Some individuals
gave money to the program and later asked that it be returned,
but their funds were not returned as requested. The order stated
that because the people being recruited by the women were
expecting compensation as a result of joining, and that no
products or services had been exchanged, the program was a
The Wadsworths have agreed
to repay all funds they received through their participation in
Women Helping Women. They agreed to assist the State Auditor's
Office with its investigation of the program, which includes
testifying at any proceeding regarding any matter in which they
may have information and providing names of other participants.
They did not admit to the
allegations in the cease and desist order, but waived their
right to an administrative hearing.
"As I have said, we do
not plan to prosecute every single pyramid scheme
participant," Morrison said. "We want to protect
Montana consumers from becoming victims of fraudulent activity
so we do intend to stop individuals who promote and lead
Anyone with information
about gifting programs or questions about other investment
opportunities should call the State Auditor's Office at