Ryan Chamberlin wants pyramid scheme operators to face jail time

Overhead view of banker or financial adviser arranging white cards with Dollar sign in a pyramid shape on textured wooden desk.

A new bill filed in the state Senate could outlaw pyramid schemes in the Sunshine State if passed.

The measure (HB 249), introduced by Ocala Republican Rep. Ryan Chamberlin, would essentially prohibit a person from establishing, promoting, participating in, or operating a promotional pyramid scheme in Florida.

The bill would declare promotional schemes, such as chain letters, pyramid clubs, or any other organized group that requires its members to pay something of value or compels its members to increase its membership through recruitment to advance their position for monetary gain, as a declared a lottery.

Those who participate in this “lottery” by becoming a member or affiliating with an organization deemed as such, would be committing a misdemeanor in the first degree if the bill passes into law — which can carry a sentence of up to one year.

A person convicted of setting up, promoting, or operating a pyramid scheme would be guilty of a third-degree felony and could face a potential prison sentence of up to five years, in accordance with Florida statutes.

The bill defines a pyramid scheme as “a plan or operation in which a person pays or gives consideration for the right to receive compensation that is based on recruiting other persons into the plan or operation rather than from the sale and consumption of products, goods, services, or intangible property by a participant or other person introduced into the plan or operation.”

The Department of Legal Affairs would be tasked with overseeing complaints, and if it is found to be in the public’s best interest, the department would then be compelled to issue a cease-and-desist order against the person operating the pyramid scheme.

Those who fail to adhere to the cease-and-desist order could face a potential fine of $10,000 for each violation, which could be recovered by the state of Florida in a civil suit, according to the bill.