Global Prosperity Group is being probed by the federal government for luring investors into a pyramid scheme. Investors are encouraged to trash their social security cards and conceal their assets abroad.
As its name would indicate, Global Prosperity Group has promised people great wealth. The founders say they've raised $300 million in the last four years. Yet many investors, far from enjoying any windfall, have ended up deep in debt.
"They suck you in and squeeze you dry," Marc Douglas of Escondido, Calif., who says he's lost thousands of dollars to the group, told a reporter.
Global Prosperity has used a mix of religious and antigovernment rhetoric — along with slick Internet recruiting tactics — to lure investors into a program that is actually a pyramid scheme, according to authorities in several states.
Portraying the government as a power-hungry, foreign-controlled entity that interposes itself between the people and their God, the group encourages investors to trash their social security cards and drop concerns about taxes, while concealing their assets abroad.
"You can be free from those tyrannical controls, the threats, intimidation, harassment, to lien, levy, and seize and sell property," Global co-founder Keith Anderson says in an introductory videotape that continued to be distributed even after Anderson left the group.
"All those things," he says, "will be history."
Global's "expertise" isn't free. Those who are interested shell out $1,250 for "G-1" introductory videos. Then, there are pricey seminars in sun-drenched locales like Cancun and Bermuda, with "G-4," the capstone course, costing participants $37,500.
In all, an estimated 70,000 people have bought Global's starter videos, and thousands of them have attended the extraterritorial seminars.
According to authorities, Global is essentially teaching criminal behavior. "What this company really does is tell people how to commit tax evasion and fraud," North Dakota Securities Commissioner Syver Vinje told The (Spokane, Wash.) Spokesman-Review.
"The tapes and seminars of Global Prosperity are worse than worthless. They could put you in jail."
Cease-and-desist orders have been issued against Global in Iowa, Massachusetts, Michigan, Missouri, Nebraska, North Dakota, South Dakota and Oregon, though in many cases the group has defied them. The Internal Revenue Service and Federal Trade Commission have launched investigations.
Similar scams have taken in hundreds of thousands of people around the world. Like Global, a number of groups have offered the old anti-tax line as a money-making proposition. Others, without soliciting money, have sought simply to sell the idea that Americans don't really have to pay their federal taxes.
On July 7, the We the People Foundation for Constitutional Education, which bills itself as a "not-for-profit corporation dedicated to research and education in matters of taxation and governance," took out an expensive full-page advertisement in USA Today.
The group claims in the ad that "[m]ost citizens are not required to file an income tax return," and that "[t]he 16th ('income tax') Amendment to the Constitution is a fraud."