United States v. Tan, No. 10-2091 (1st Cir. 2012)Annotate this Case
Husband established two "multi-level marketing" companies (pyramid schemes) that supposedly sold health and dietary supplements, but actually sold very little. Wife recruited new members, primarily from an immigrant community. New members would make an initial investment and then receive part of the investments paid in by new recruits. Wife urged potential investors to borrow to invest at the highest possible level, promised that there was no need to sell merchandise, and promised lifetime payments. The couple lived lavishly until they could find no more new investors. By the time the scam imploded, roughly 500 investors had lost about $20,000,000. Both were convicted of numerous counts of mail-fraud, money-laundering, and conspiracy (18 U.S.C. 1341, 1957, 371). Having affirmed husband's convictions in an earlier opinion, the First Circuit affirmed wife's convictions. The court rejected arguments concerning sufficiency of the evidence, wife's knowledge, the elements of money-laundering, and variance from the indictment.