Two Guilford women who ran a million-dollar pyramid scheme, called a gifting club, for three years will be sentenced today.
An 18-count federal indictment charged Donna Bello, 55, of Guilford and Jill Platt of Guilford with defrauding the IRS, filing false tax returns and committing wire fraud.
The women pleaded not guilty to the charges during their arraignments in U.S. District Court in Hartford and were found guilty of wire fraud and filing false tax returns in February.
Bello was the "ringleader and principal promoter" of the alleged pyramid scheme, according to prosecutors, and made at least $400,000 from the arrangement.
"She didn't profit whatsoever. She did it for philanthropic purposes, giving money back to people," Bello's attorney, Richard Marquette, said during one of the hearings.
When asked if she had anything to say about the charges as she left the courthouse, Bello said, "No, I don't. I'm sorry."
The indictment outlines exactly how the alleged scheme worked.
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The pyramid had four levels: "Appetizers," "Soup and Salads," "Entrees" and "Dessert."
New members contributed a $5,000 "gift" to join at the "appetizer" level, older members moved up the pyramid, and the person at the top "dessert" level cashed in on the new member "gifts," according to court documents.
From there, the pyramid split with lower level members moving up and recruitment starting again for eight new "appetizer" level members.
The women referred to their proceeds as "Green Beans" and sent emails to potential club members promising large tax-free financial gains, according to the indictment.
"They went to counsel to review the matter, to review the essence of what the government calls a Ponzi scheme, and legal counsel that they had told them it was legal," said Jonathan Einhorn, who is Platt's attorney.
Attorneys even participated in the club, according to Einhorn.
The indictment includes portions of numerous emails sent from the women to participants in the club.
In one email, Bello told a participant, "I believe within a year of your starting ... you will make $80,000 on your small investment."
Bello emailed another participant saying, "Keep it quiet because rather not have red flags raised."
When a participant complained to her, Bello replied in an email, "You chose to gift, your family chose to gift. You and your family r not victims. There were no promises made by me."
Bello explained to another participant in an email, "The tables are not illegal. All but a few gifts received have gone to charity. I do not have money to give to you. I'm sorry."
The women claim more than 70 people made it to the "dessert" level and that more than 20 of those women made it to the top more than six times, according to emails outlined in the indictment.
They also claimed in emails that more than $5 million has exchanged hands.
