Montana State Auditor and Securities Commissioner Matt Rosendale is warning Facebook users of a new pyramid scheme called ‘Friendsgiving’, that is illegal in Montana.

Spokesman Kyle Schmauch explained the scheme.

"The 'Friendsgiving Network' is being offered on Facebook and involves recruiting friends to buy into the bottom of a pyramid for $100,” Schmauch said. “Once the pyramid is filled up with new participants, the person at the top takes $800. The two people at the second tier of the pyramid each become the top of two new pyramids, and the process repeats. It is primarily operating within private group chats on the Facebook Messenger app.”

Schmauch verified the fact that pyramid schemes such as ‘Friendsgiving’ are illegal in Montana.

“Pyramid schemes such as ‘Friendsgiving’ are illegal in this state,” he said. “There’s no product being promoted, no product being sold, there’s not even any sort of charity fundraising being proposed, it’s just taking money from some people and transferring to another person with the promise of a payout that will not happen for the people at the bottom of the pyramid.”

More information on pyramid schemes, securities fraud, and how to report suspected fraud is available on the Commissioner’s website.