HARLINGEN, Texas – Old plans in a new situation are essentially what can be found on Facebook feeds across the country.
Amid the global pandemic, people have embarked on a 2017 Ponzi program to reach out to COVID-19 families in need of money.
The scheme has many names, but it is most commonly known as the “blessing loom” and it is nothing short of a money robbery.
“The obvious thing is that when you see someone guaranteeing a return that is far better than anyone else’s, the red flags should be raised,” advised James A. Gleason, professor of business law at the University of Texas, Rio Grande Valley College of Business and Entrepreneurship.
According to the Blessing Loom pages, the sales pitch is based on recruiting.
“And is color-coded, the purple gift recipient is in the middle, to get to the middle, invitations are sent with a sum of money to improve the level. More money is required to climb as more invitations are accepted through a payment app like Venmo, Facebook, or PayPal, to name a few. It’s essentially a pyramid scheme just in a circular shape. What makes it illegal is that you aren’t actually trading investments, ”Gleason said. “They don’t actually generate any income. In other words, you are literally borrowing from Peter to pay Paul. “The loan is a textbook Ponzi scheme according to Gleason.
The program saw a resurgence amid the COVID-19 pandemic that saw millions of Americans file bankruptcy and unemployment and potentially want to turn a $ 1,200 stimulus check into a quick buck.
Only the money does not come about.
Gleason believes such programs perpetuate the need to minimize losses: “If someone wagers $ 100 and tries to get their $ 100 back, they will in fact keep trying to hire new employees, although at some point they will have to realize it made a bad choice.
The bad choice was made by some of the followers of KVEO Derick Garcia on Facebook. One viewer wrote: “I wish I knew before I was betrayed by the little that I had.”
CBS4 / LOCAL 23 News attempted to speak to the administrators of a Facebook page called “RGV Blessing Loom”. When asked via Facebook Messenger how the plan works, the administrator replied:
We are sorry. I cannot conduct an interview without possible consequences. However, there is a lot of information about them online. The group was created only to help people who have been betrayed by this system find the means to get their money back.
Before KVEO Derick Garcia could send a request to join the closed group of more than 150 people, the page was no longer available and our follow-up questions were not answered by the administrators.
To see the full interview with more details on protecting your bags, visit:
KVEO Derick Garcias, Chats with Experts series here.
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