High-flying women lose money in secret spiritual movement with 'hallmarks of pyramid scheme'

MARTIN DE RUYTER/FAIRFAX NZ

Fran Halford of Nelson talks about why she is speaking out about Circle.

New Zealand women are losing thousands of dollars to so-called women's gifting circles that purport to offer friendship and spiritual guidance but have all the hallmarks of a pyramid scheme. 

The Commerce Commission is warning women to steer clear of the circles, which claim to be women's empowerment groups that have the power to transform lives.

The leaders invite women to make a one-off gift ranging from US$1500 to $5000, and when eight women are eventually recruited the leader of the group can take the entire cash gift. If they are unable to recruit others the groups can collapse. 

Soreya James says gifting circles transform lives.

Soreya James says gifting circles transform lives.

About 100 New Zealand women are known to have been conscripted, under strict instructions to keep it "private". Some have been able to live off the proceeds of the gifting; others have been left thousands of dollars out of pocket and considering legal action. 

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The Commerce Commission confirmed it has received four complaints about gifting circles. Stuff has published a three-month investigation into the circles by journalist Anke Richter.

David White

Once she learned more about Circle, Kattia Wong decided she no longer wanted to be part of it.

Numerous former members of the circle have identified self-proclaimed wellness expert Soreya James (also known as Sheree Carbery) as being at the centre of the circles. 

James, 45, was one of the first women to join the circle, when it came to New Zealand more than three years ago. In that time she has completed five circles, but says rumours she lives off the proceeds are exaggerated.

Persuaded to speak publicly for the first time, she said she had received less than $100,000 from the circles.

Fran Halford, a Nelson doctor,has spoken out about the Lotus women's gifting circles, likened to a pyramid scheme.
MARTIN DE RUYTER / FAIRFAX NZ

Fran Halford, a Nelson doctor,has spoken out about the Lotus women's gifting circles, likened to a pyramid scheme.

In an interview at her unpretentious Mt Maunganui apartment, James said she lived modestly and at times had been on a benefit or living "hand to mouth" to make ends meet. 

"Women have perceived that I have received a lot more than I have ... There have been times where I have received, but I have also given a lot in this work. I've backed quite a few women and I've gifted other women.

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"The money I've received from this is to support my family in a time of need, it's not like I've bought an apartment. Financially I'm not struggling, but I'm not wealthy by any means." 

"This supports women to live a much more abundant lifestyle and still do what they love to do – write their books or create their music," she continued.

"Conceptually, women understand giving and receiving. That's who we are, that's our nature. Men understand paying for things and investing in things."  

"This is not a pyramid scheme because a pyramid scheme is when somebody receives more and more and more money at the top … and the people at the bottom really struggle.

"But there's nobody at the top, there's no hierarchy. There's no leader, there's no organisation, there's no management,  and there's no woman anywhere, collectively, that is receiving more money than anybody else, and that's the difference." 

Women who have escaped the circles have a different story. "It's a spiritually-transmitted disease," Fran Halford told Richter.

The Nelson doctor was told she would enter a circle as a Seed, then move on to Sapling, then Blossom and finally be a Lotus herself to receive her gift of US$40,000 (NZ$56,000) from eight new women, plus coaching and sisterly support on the weekly group calls online.

Halford was urged to keep it private, especially from men, and told not to read anything online about the circles. "They had this evangelical glow and chased me hard. I trusted them."

She took out a bank loan to join a circle. She lost it all, but is more disappointed at her own gullibility.

Another woman, 45-year-old Auckland fashion designer Kattia Wong, decided to walk away from her circle and her money after reading criticisms online.

"I was so stressed I couldn't sleep," she told Richter. "They are twisting spirituality for personal gain. They have lied to me by saying it is legal and not a pyramid scheme. Many women would not join in the first place if they knew the truth."

The Commerce Commission says the gifting circles have the hallmarks of a pyramid scheme. The Commission was aware of at least one circle that required a $5000 buy-in, competition general manager Antonia Horrocks said. 

"Gifting circles first emerged in North America and are reported to have operated as pyramid schemes. We haven't investigated the New Zealand incarnations at this time and we don't have information to suggest these circles are common or widespread," Horrocks said.

"However, we strongly advise New Zealanders not join up. Hallmarks of pyramid schemes are that they require continued recruitment of new members, who have to pay to join, and there is an expectation members will eventually profit from being involved. These schemes collapse and those at the bottom lose their money. In addition, anyone operating or promoting a pyramid scheme risks prosecution."

Although the Commission has received complaints they were not investigating the circles. 

Most women spoken to who had been part of a circle asked not to be named because they were embarrassed and fearful of the repercussions of their name being associated with the circles, and expected a backlash from the women who had been successful at them. 

Others felt guilty that women who had scraped their money together as a gift, were later left penniless. 

One Auckland professional, a manager, was considering consulting a lawyer after losing US$5000 to a circle leader. The woman had backed out of the circle but the leader had made tens of thousands of dollars off the group. 

She warned women to do their research if they were invited into a group.

"I would say look, this happened to me, and I wouldn't recommend that to you. If you research it more thoroughly you will find it will fall over and people will lose out," she said.

"I would say it's a bad investment but a good learning experience. I met some good people, but I'm not sure if it was worth that much money."  

James insisted she felt a sense of responsibility to the women who had lost money in the scheme, but said those women wrongly believed the circle was an investment. She said it was women who were focused on the financial benefit rather than the personal gain who often lost out. 

"The ones that generally leave circle at the ones there for the money only."​

 - Sunday Star Times

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