Snared in a pyramid of greed A new investment scam targets women with romantic notions of empowerment, but it can't keep its promises, says John Davidson

Anne and Jenny, successful Scots working in London, are part of a second wave of women hit by a pyramid scheme called Heart: Women Empowering Women, which is sweeping the country. Yesterday GMTV was inundated with callers desperate to talk about their experiences of the scam.

Ironically, this time the victims are more affluent women, the stakes are higher, and the scenes of crime are middle-class homes across Scotland, London, and the home counties. Only last month the females-only scam surfaced in housing schemes in Glasgow, with women queuing outside council houses in Balornock to hand over #500 in the hope of getting back #4000.

Outbreaks also occurred in Blackhill, Bishopbriggs, Springburn, Hamilton, and Cumbernauld, with thousands of pounds withdrawn from credit unions to let women take part. Little do they know that their chances of getting their money back are minimal. The scheme sparked financial panic when it crashed recently in the Isle of Wight and America.

But last Thursday morning Jenny knew nothing of all this. She sat up in bed and asked Anne to go over the details. It was straightforward. If she raised the initial stake, she would be in on the ground floor of a unique investment scheme for empowering women.

The genius of the scam, Jenny was later to realise, was the empowerment bit. The latest pyramid scheme is disguised for psychological comfort - and legal compliance - as a women-only ''gifting'' arrangement. Anne and Jenny were good enough friends to know the real issue was making enough money to clear all Jenny's outstanding debts and create a nest-egg to finance private schooling for Anne's young children.

Anne cut to the chase. ''It's a little bit dodgy, of course. But the scheme's new in this country. And if we get into it early enough, I reckon we can do very nicely. I think your problems could be solved.''

Having gutted the poorer areas of the country, Heart: Women Empowering Women is now sweeping the leafy suburbs - wherever, in fact, there's a concentration of 30, 40, and 50-something women with #3000 in an ISA or building society pass-book, and an appreciation of what an eight-fold return would mean.

The scheme, as explained to Jenny, was simple. A friend - someone, that is, who has already gifted a #3000 stake in the scheme - invites you along to a women-only ''gifting'' party. Actually, she invites two women friends - hoping that each will gift a #3000 stake in the scheme. At a further party, these guests must furnish a further two guests of their own, each again prepared to place a #3000 gift.

Every new gifter has her name entered on the first tier of a pyramid chart. The names of her friends (and friends of those friends) are added on each of the next tiers until the pyramid represents #24,000 worth of gifting - which is then passed back to the first gifter as an eight-fold return on her stake. It's all done with formal gifting covenants - and mention is generally made that there can be no sure-fire guarantees. The onus is on each of the stake-holding participants to recruit the necessary numbers of new gifters to make their pay-outs possible.

Anne went to her first party with some reservations until she saw the cash being counted - and distributed. ''Most of the guests were 30-something women,'' she recollects. ''Women much like myself - reasonably successful young professionals, rather than women of vast wealth who wouldn't really miss three grand if the whole scheme

went belly-up.''

At the party, drinks and canapes were served. Anne said: ''It was a bit like the early stages of a girlie sleepover. Compliments about your clothes. Chit-chat about mutual friends, holidays, men problems . . . Meanwhile, amid piles of banknotes, the hostess and two sidekicks were carefully checking each new gifter's stake.''

Just as carefully, they checked and handed over a #24,000 windfall that same evening to a friend of a friend of the friend who had originally introduced Anne to the opportunities of gifting.

This convinced Anne that the scheme could work, but only as long as ever-increasing numbers of gifters were recruited. The very first investor only needed eight others to generate that splendid eight-fold return. But each of those eight could only have received their return once a further 64 gifters had been found.

Four stages on, and returns are only possible if more than a quarter of a million further gifters join the scheme. The whole process eventually slows down or dries up completely, leaving gifters with no means of recovering their cash. But women are still joining, although they know there can be no guarantee they will ever see their initial stake again, let alone scoop the potential #24,000 payout. It's like a new version of the lottery where the stakes are high, but the odds are attractively shortened.

With a big debt outstanding to the Inland Revenue, Jenny was tempted. The ease with which she could make an otherwise unthinkable return was irresistible. ''I'm in a bit of a financial pickle,'' she confesses. ''Loads of credit card debt and a massive tax bill. I couldn't see past the idea that this would effortlessly sort it all out.''

By lunchtime on Thursday, in the spirit of nothing ventured, nothing gained, Jenny set off for her bank to withdraw the necessary cash. On the way back to her Crouch End flat she bought an Evening Standard, which exploded her dream. The paper said the gifting craze originated as a quasi-benevolent fund in the States which almost circumvented American law against pyramid-model currency transfers, but had now led to a number of arrests.

By five that same afternoon she phoned Anne, confessing a change of mind, and urging her friend not to get involved. Although Anne remained convinced the potential benefits outweighed any risk, her other gifter had also cried off. She, too, had seen the Standard's feature, and reckoned the negative publicity could only hasten the scheme's collapse.

Curiosity got the better of Jenny, and she tagged along with Anne to the soiree. She was so glad she had put her #3000 back into the bank. The sight of intelligent, successful women thrusting bundles of banknotes into the organiser's hands, and of one ecstatically happy woman pushing a multi-thousand-pound haul into her bag, made her regret her doubts.

''I almost felt foolish to have passed up this opportunity,'' she says. ''If that three grand had still been in my bag, the sight of all that money, and the evening's utterly infectious win-win atmosphere, would have been enough to make me join the pay-in queue. Now I just think Anne has been a fool to get involved. She can't afford to lose that money, you know.''

Anne, however, awaits a return on her #3000 stake with a mounting anxiety that's hard not to class as the price of greed. Many women in Glasgow are in the same situation, lured by organisers who hand out starter packs entitled: Welcome to the eternal circle of gifting women.

The poorly photocopied guidelines encourage new recruits to buy into the scam, where they move from being ''givers'', to ''support level'', to ''apprentices'', before reaching the level of being a ''receiver'', and getting their eight-fold return. Supporters are told to ''walk the walk''. Recruits are told to ''energise abundance'' in their lives.

It is estimated that hundreds of women who have invested are still waiting for any return on their money, dependent on thousands more buying into the scheme. At pyramid meetings in Glasgow, as in London, no receipts were given, and there was no indication of how the money would be stored. There is believed to be an appeal post office box in Surrey, and an anonymous WEW website claims it is simply a support group for women.

WEW is now banned in four US states, and police and

trading standards officials in Scotland have all warned against getting involved. One Glasgow victim commented: ''One member who held a meeting in order to have her windfall paid out had newer members banging on her door, threatening her and her family. Obviously they had not gained anything.''