Pennsylvania Closes Direct Mail Pyramid Scheme

Club Freedom, a alleged direct mail pyramid scheme, has been shut down by Pennsylvania authorities.

The club’s organizers, including secretary-treasurer Dayton G. Sauerman, signed an “assurance of voluntary compliance” agreeing to pay $49,000 in restitution and $5,000 in civil penalties, according to state Attorney General Mike Fisher.

They also agreed to shut down their operations and all post office boxes used to promote the club, and to notify members that they are entitled to refunds.

The club sent brochures to hundreds of consumers, promising that the club was “a brand new concept in the world of earning money at home,” according to Fisher’s office.

Victims, who paid $200 for each “position” in the pyramid, were promised a payout of $300 after six additional people joined, the state alleged. Those who held five positions were to receive $1,500.

“We believe Club Freedom was a blatant Ponzi scheme that obtained thousands of dollars from unsuspecting consumers who were led to believe it was legal,” Fisher said in a statement.

The assurance is on file with the Commonwealth Court in Ebensburg.