Mini-Madoffs 'spreading via YouTube'

9 April 2009

A rash of Ponzi schemes are using the video sharing website YouTube to promote seemingly legal 'cash gifting' programs that are in fact just fraudulent pyramid schemes, according to reports.

The Better Business Bureau claims to have identified 23,000 clips promoting these 'gifting' schemes that together have received almost 60 million views, the Los Angeles Times states.

While the videos do not usually ask for money directly, they send viewers to websites where they are asked to sign up for a legitimate-looking 'gifting program' for a fee of between $150 and $5,000.

They are also urged to recruit more people to the program with the promise of rewards for all, the newspaper said.
Alison Southwick of the Better Business Bureau said: "They make it seem like it's legal and an easy way to make money, but it's nothing more than a pyramid scheme."

The newspaper dubbed the scams "mini-Madoffs" because they work on the same model as the $65 billion fraud committed by disgraced Wall Street broker Bernard Madoff.

Mr Madoff pleaded guilty to orchestrating the largest Ponzi fraud in history last month.

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