Give Us Your Feedback: Women's Gifting Circles

After a month-long investigation into women’s gifting tables along the shoreline, the New Haven Register ran an article on the trend that garnered more than 250 comments on newhavenregister.com and numerous e-mails and phone calls from those who have been approached to join or have joined and want their money back. Attorney General Richard Blumenthal has been investigating the tables since the fall when he released a public warning about them and says he is considering taking legal action against those involved.

I asked the Register reporter, Susan Misur,  for permission to reprint this article. It is important for women along the shoreline to be  aware of these gifting circles. We are asking: What are your thoughts? What can community organizations do? What should women do?

The following is part of the article that ran in the New Haven Register on March 21. To read it in its entirety, click here.

All eyes were on the gold platter.

It held 10 small, red envelopes emblazoned with Chinese words in shiny lettering around dainty Asian drawings.

Inside each envelope was $500 in cash — $5,000 in total.

The platter held the first of eight payments for one of nine wine-sipping women gathered in arm chairs and sofas in the living room of a stately Shoreline home last week.

And the envelopes represented a promise, or maybe a tease, of what reward could come to the other women.

Seven of the women present were part of what’s called a gifting circle, transferring thousands of dollars to each other over many months and recruiting friends to join and open their pocketbooks.

Another was a guest at the gathering. She was there to observe, ask questions and consider joining to make some money to buy a new car, invest in a business, take a vacation, pay off loans, donate to charity — just some of the reasons scores of other women across the Shoreline have been joining such circles over the past two years.

The ninth woman in attendance — holding the coveted platter — was buying her place in the circle that night for $5,000.

Meetings like this one are held in nearby towns each week, and more women are handing over thousands in cash, hoping eventually to make $40,000 or more. Others are profiting three times that amount, renovating their homes and paying medical bills.

Women involved claim the gifting circles are legal, while Attorney General Richard Blumenthal contends they’re against the law. Some local law enforcement agencies said they are unaware of the gifting circles.

Blumenthal said the circles — commonly known as women’s gifting tables — are really illegal pyramid schemes that will eventually collapse and cost many participants thousands.

“They are essentially pyramids that exploit hopes and dreams, but leave people with huge losses when they collapse,” Blumenthal said.

Local gifting table members and a prominent attorney who represents them said gifting tables are carefully structured not to violate U.S. tax laws.

Gifting circles, which right now are only targeting women, are rampant along the Shoreline. Women involved also confirmed that Barbara Hamburg, a Madison resident who was slain March 3, was a member of a local table. There is no indication her membership played any role in her death.

Law enforcement officials and fraud experts said women nationwide are joining gifting tables at higher rates than ever to battle the emotionally and financially taxing effects of the recession and to find a sense of belonging. The gifting table may be wonderful for a while, officials said, until the table’s legs collapse.

The Structure

It almost seems like a complicated math problem that needs to be drawn out on paper.

The structure in the women’s gifting table — which resembles a pyramid — has four levels composed of one person on the top, two below her, four below them and eight on the bottom level. Buying into the bottom level requires new members to attend an introductory meeting and costs $5,000, which goes into the wallet of the top position-holder.

When the eight lowest positions are filled with new recruits each paying $5,000, the woman at the top leaves the table with $40,000 or can enter it again at the bottom by contributing $5,000 to whoever now rises to the top of the pyramid.

Attorney Edward Marcus, former chairman of the Democratic State Central Committee, represents the table of women who met last week, the women said.

When asked if he represents the group participating in a gifting circle, Marcus said, “We represent several people that have been contacted by the attorney general’s office.” When asked if the gifting circle was legal, he said, “My position is that it is legal,” and that “sometimes people are required to retain counsel to protect their position.”

The woman at the head of last week’s table declined to comment.

Women from North Branford, Guilford and New Haven who were invited to join said they were told by participants that gifting circles are legal because the money doesn’t permanently go to one person — the receiver on the top of the pyramid keeps changing as each collects $40,000 from eight others.

However, it may take months for people to transfer positions in the line-up, depending on how quickly new members join and contribute money. Two women at last week’s party said they joined around Labor Day and have not yet made it to the top tier to receive money, whereas others have boasted they received money within six weeks.

Most circles along the Shoreline use a dinner party theme to describe their levels and hold monthly or weekly events to discuss the table’s proceedings and find new members.

Those entering on the bottom level are called “appetizers,” and bring such food to each week’s meeting for as long as they remain in that position. Those on the next level are “soups or salads,” and bring one of those dishes to gatherings. Next are the “entrees,” and finally, the woman on top of the chart receiving money is the “dessert.”

Tuesday’s group previously used this system, but recently began using college class ranks of freshman, sophomore, junior and senior instead. Some women were referring to themselves as junior sisters.

Getting in

A woman must be invited to a table’s dinner party or meeting to attend. A friend might first explain the gifting circle over coffee or at a holiday party and invite her to a meeting.

But, “they’re very careful about who they approach,” said one woman from Guilford who was asked last year and attended one of the circle’s parties. She and many others who refused invitations to join declined to give their names for this story, for fear of retaliation by friends who have joined.

At that party, one guest decided to join the circle and give $5,000 to the woman on the dessert level.

“They ring a bell, saying, ‘Oh, we’ve got a giver,” the Guilford resident explained. “They say, ‘If you had more money, what would you like to do with it? Give it to charity? Do you have college tuition to pay for? They aim their sales shtick around that.”

Women who had been approached said no one pressured them to join after they had rejected the offer, but they were usually asked to join different tables by other friends.

A North Branford business owner, fearing for her company’s reputation, said that an employee of hers almost got fired for asking clients to join her gifting table.

“She was warned she would lose her job if she spoke about it anywhere near the business. She needed money; her husband was out of work. I think that’s what’s happening. They’re preying on these poor people,” the business owner said.

A growing ‘sisterhood’

Sisters, bonding, support system, empowerment — these are just a few of the buzzwords the gifting tables use.

“They prey on women’s empathy, how women care about each other and how the more you put out into world, the more that comes back to you,” said North Branford resident Lori Vogt, who was approached in the fall but rejected the invitation after researching it online.

An introductory guide about the circle obtained by the New Haven Register tells participants, “We are a Table of women who have discovered a way to help each other fulfill our dreams … We are women who currently are receiving enormous practical and financial benefits.”

Guilford-based family therapist Donald Opatrny said women may feel comfortable joining such a group even if they have doubts about it because trusted friends are inviting them.

“There’s a human interest in trying to better yourself and when people you know have ‘succeeded,’ it can sweep you up in an energy, and you can forget about these ideas like fair economic exchange,” he said.

“You get swept up in an ‘us’ and ‘them.’ If you’re with us, you feel good and you feel apart from ‘them’ out there. It’s a tribal kind of energy that takes you over.”

Women who were invited but turned down an invitation to circles said an exclusive attitude was prevalent among participants, who told them that only trustworthy, loyal women were invited and advised them against talking about the circle with others or in public, in case anyone should overhear.

Continue reading here.

Susan Misur is a reporter at the New Haven Register, covering anything and everything in Guilford, North Branford and Old Saybrook. She graduated from Bucknell University in May 2009 and has been working full-time at the newspaper since July 2009. Susan interned at the Register as a reporter and copy editor in the summer of 2007, served as editor of the Milford Weekly, a sister newspaper of the Register, in summer 2008, and covered the town of Milford as a correspondent for the Register for five months in 2009.

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