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Eight Canadians Charged in Alleged I-Gaming Pyramid Scheme

12 July 2004

The Royal Canadian Mounted Police (RCMP) in June issued a public notice alerting citizens that eight people in Alberta face 16 criminal charges in connection with an organization called World Games, Inc. (WGI). The RCMP said a five-month investigation uncovered evidence that WGI took in millions of dollars in illicit revenues from an alleged pyramid scheme and illegal lottery.

"As a result of overwhelming requests for information on organization," the report stated, "we have chosen to disseminate the following information out of a moral and public responsibility."

People enter the WGI network by joining at one of three levels, each of which has a different fee and benefits. A member earns a commission every time he recruits a new person to join the network and every time one of his recruits brings in a new member. WGI boasts an international membership of over 400,000.

This business model, however, is categorized as a pyramid scheme by the RCMP and may be illegal under Canada's Competition Act. According to the RCMP, such schemes "usually entice their victims to join with promises of huge profits. Those who do soon find out the only way they can make money is by recruiting others."

The eight people facing charges in Alberta were apparently WGI promoters who were high up in the pyramid.

In addition to operating a pyramid scheme, the promoters are charged with operating an illegal online lottery. The lottery is not based in Canada, but the Alberta Gaming Commission says it is not licensed in Canada, and therefore anyone playing it is breaking the law, regardless of where it's located. As promoters, the eight suspects could accountable.

WGI also provides a virtual stock exchange, an online casino and a new white-label sports book suite from Victor Chandler. To keep money circulating within the network, members must reinvest 30 percent of their winnings from the games back into the network. They must also play the lottery every week to continue earning commissions for their new recruits.

The organization is not only under pressure in Canada. The Australian Competition & Consumer Commission (ACCC) initiated legal proceedings against Gold Coast-based Worldplay Services Pty Ltd and a man named Greg Kennedy on June 7 for engaging in conduct in connection with www.worldgamesinc.com.

WGI contests, however, that it has not been charged with any offense in Australia. The company charged is World Play Services, which WGI says provides "limited administrative services" for the business. WGI also states that Australians cannot be members.

The World Games site is off limits to residents of Singapore, the United States, India, Germany and the Netherlands Antilles as well.

A Swedish court in March convicted a WGI member for promoting the WGI lottery, but the company claims that the woman acted on her own accord in violation of WGI policies and procedures. The company offered no support in her defense.

Additionally, a group of 20 investors in 2002 threatened to file a fraud-related class action suit against the WGI, which used to operate as VG Global in the British Virgin Isles.

Proceedings against the eight suspects in Alberta are expected to commence in November.

Eight Canadians Charged in Alleged I-Gaming Pyramid Scheme is republished from iGamingNews.com.
Bradley Vallerius

Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com
Bradley Vallerius
Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com