Legal Definitions - sisterhood

In a legal context, the term sisterhood refers to a type of illegal pyramid scheme, often disguised as a social club, a gifting circle, or a women's empowerment group. Participants are encouraged to "gift" money to individuals at the top levels of the structure, with the promise that they will eventually receive larger sums as new members join and contribute. These schemes are unsustainable and illegal because they rely on an endless supply of new recruits, inevitably leading to most participants losing their initial investment.

Here are some examples illustrating how a "sisterhood" scheme might operate:

• Example 1: The "Financial Freedom Circle"

  A group of friends is invited to join an exclusive "Financial Freedom Circle" where they are told they can support each other's financial goals. To join, each new participant must "gift" $5,000 to the person currently at the top of their specific circle. They are then encouraged to recruit two new members, who will each "gift" $5,000, with the understanding that once enough new members join, they will move to the top position and receive "gifts" from subsequent recruits. The organizers emphasize the importance of trust and mutual support among members.

  This illustrates a "sisterhood" because it uses the guise of a supportive social group and the language of "gifting" to operate an illegal pyramid scheme. The initial payment is framed as a benevolent contribution, but it's actually an investment in a structure designed to enrich those at the top at the expense of later participants, who will likely lose their money as recruitment inevitably slows.

• Example 2: The Online "Prosperity Partnership"

  An online community advertises a "Prosperity Partnership Program" through social media, inviting individuals to "invest in themselves and their sisters" by participating in a unique wealth-sharing model. New members are asked to send $1,000 via a digital payment app to a designated "leader" and then recruit three new "partners" to do the same. The program promises that once a member recruits enough people, they will ascend to a leadership position and receive payments from their recruits' recruits, with testimonials from early participants claiming significant returns.

  This demonstrates a "sisterhood" operating in a virtual space. The language of "investing in themselves" and "partners" attempts to mask the underlying pyramid structure where money flows upwards, and the vast majority of participants will never recoup their initial payment, let alone profit, as the scheme depends on an ever-expanding base of new recruits.

• Example 3: The "Community Blessing Fund"

  In a small town, a local resident starts a "Community Blessing Fund," inviting neighbors to participate in a system designed to help members facing financial hardship. New participants are asked to contribute $2,000, which is presented as a "blessing" for an existing member who is currently at the top of the fund's structure. Participants are told that by inviting others to join and contribute, they will eventually receive "blessings" themselves when they reach the top of the circle, fostering a sense of communal support and shared prosperity.

  This example shows a "sisterhood" leveraging community trust and charitable language. The "blessing" is a thinly veiled payment into a pyramid scheme, where the promise of future returns depends entirely on the recruitment of new members. This makes it an unsustainable and illegal financial arrangement, as only a few at the very top benefit, while most participants lose their money.