Nielsen v. Myers

Plaintiffs in this case participated in a “gifting club” in which they and others paid cash — either $2,000 or $6,000 — to obtain a position on a pyramid-shaped “board” in the hope that they might eventually move to the top of the board and receive a large return (more than $13,000) on their investment. Their success in reaching the top depended on a sufficient number of additional individuals being recruited to also make a cash “gift” to participate. The Oregon Attorney General concluded that the club was an illegal pyramid scheme and took steps to halt it. In response, plaintiffs brought…