Warning Bulletin
Urgent warning about "The Oaktree Octave" chain gifting scheme
If you receive a very long email from someone you know (or someone you don't know, for that matter) promoting "The Oaktree Octave" and its affiliated foundation, The Oaktree Endowment, my advice is to trash it.
It's a classic chain gifting scheme with a twist... instead of the usual hundreds or thousands of dollars demanded up front to participate, the only money you pay in advance is AU$20, for the promise of hundreds of thousands of dollars in coming weeks from people who'll send you $20 with no strings attached. But this scheme "trusts" that you'll "tithe" (give 10% of) this income to its charitable foundation. And that you'll forward another 10% to the person at the top of the list.
The email I received described this as "tax-free" income, and then spun a cleverly worded piece of emotional blackmail that created the clear inference that, if you don't "tithe" this "tax-free" income by sending 10% of everything you receive to the Oaktree Endowment, apparently via an offshore bank account (unclear), your integrity will be in question.
Hmmm... the only way this is "tax-free" income is if you fail to declare it in your income tax return! So much for integrity and the moral high ground.
Chain gifting programs are illegal in several ways
Apart from promoting tax evasion (highly illegal), there's no tangible product... it's just a chain letter with a novel twist, packaged in powerful emotional appeals like supporting international charities and doing good, to help take the heat out of the real appeal to blatant g-r-e-e-d. The quasi-religious language and altruistic sentiments are also classic "smoke-and-mirrors" to deflect feelings of guilt or doubt you may have over the seductive appeals to greed and deceptive conduct promoted by the scheme that make a complete mockery of any spiritual or charitable posturing.
It's a classic Barker's Egg. (If you're not familiar with that expression, you can learn more here: http://www.profitclinic.net/barkerseggs. )
Here's a telling quote from UK government regulators...
What are chain gifting schemes?
These schemes work like a chain letter, only with cash. New recruits are asked to give money to another person in the scheme whose name is at the top of the list. The recruit takes the person's name off the top of the list and adds their own name at the bottom in the hope they will make it to the top and others will pay them.
These schemes always break down when the stream of new investors dries up. People joining at this point will lose their money. Typical examples include: Hearts, David Rhodes, Circles of Success and Women Empowering Women.
Legality of these schemes
In the past, the courts have found chain gifting schemes to be illegal lotteries as they are a distribution of money by chance for commercial gain.In the USA and Canada, in recent years, hundreds of people have been fined or gone to jail for promoting this type of scheme.
For all I know, the people who created this scheme may be sincere in their intentions. But it's hard to be convinced when such manipulative techniques are used to engage readers and suck them in with such overblown, get-rich-quick promises.
In any case, regardless of their motives, the scheme fails the legality test on several counts. Don't risk it. Stay well clear.
©1998 The Profit Clinic. All rights reserved. This page updated 27 March 2006.
