Here come the mini-Madoffs.
The Better Business Bureau warned Wednesday about a proliferation of what appear to be Ponzi schemes on YouTube.
The agency said nearly 23,000 of these videos -- usually promoting “cash gifting” or “gifting club” programs -- had been identified and they’d gotten nearly 60 million views.
“They make it seem like it’s legal and an easy way to make money, but it’s nothing more than a pyramid scheme,” Better Business Bureau spokeswoman Alison Southwick said.
A spokesman for YouTube, which is owned by Google Inc., said the company didn’t comment on individual videos.
The videos usually don’t ask for money directly but send viewers to websites where they are urged to sign up for a “gifting program,” usually for fees ranging from $150 to $5,000.
Ponzi scams, also known as pyramid schemes, depend on getting an ever-larger number of people to invest with promises that all will reap the rewards. It was the same mechanism used by disgraced financier Bernard Madoff, except his fraud totaled $65 billion.
One of the videos featured Bible quotes, stacks of money and a testimonial from a man who said he got rich from cash gifting, found true happiness and lost 35 pounds.
Some of the videos claim that because it’s “gifting,” it’s somehow legal.
“They talk about ‘cash leveraging,’ whatever that means, and other vague marketing talk,” Southwick said. Participants are told to recruit more people who will put in more money, and so on.
“It’s just money changing hands,” she said, “and it always goes to people at the top of the pyramid.”
Which brings up the question: Does Madoff have computer privileges in prison?