Major Problems with Cash Gifting

If you choose to participate in cash gifting, be sure to set aside some of the illegally obtained money as a form of insurance, to help pay for your defense attorneys. In the end, they may be the only people that really make a profit from this illegal activity.

Many people believe that the promotions being offered on various Youtube channels are perfectly legal. Most of these Youtube cash gifting channels and online websites devoted to cash gifting are created by people based in California. A look at California Penal Code, Title 9, Chapter 9, Section 319, which covers the definition of a lottery, states that "a lottery is any scheme...among persons who have paid...any valuable consideration...whether called a lottery, raffle, or gift enterprise, or by whatever name the same may be known."

If California Penal Code is not enough, one might also search FindLaw, a comprehensive database of California case law for "People v Sanchez" where one can see an example of a group of women who signed the same paperwork offered by these schemes, "gifting statement" and "non-solicit" and paid hefty fines in lieu of jail time for their participation.

The United States Postal Service offers more proof that cash gifting is illegal. One thing you will notice is that cash gifters are usually only willing to send packages through the non-governmental delivery services such as United Parcel Service (UPS) and other services non-affiliated with the United States Postal Service. This alone should raise concerns, because the reason they refuse to send or accept cash via the cheaper USPS service is a fear of being caught committing mail fraud.

When one party is signing fraudulent statements and non-solicit agreements which result in monetary transactions through the USPS, the stakes are raised as to which additional federal laws are being violated. Most of the masterminds behind these schemes are afraid of taking the risks, which can result in severe legal penalties. The USPS official website offers more information on protecting yourself from common mail fraud schemes, many of them similar to the common cash gifting opportunities one will find online.

Many cash gifters will angrily defend themselves by making claims that the practice is no different that giving money as a birthday or holiday gift, and by making reference to Publication 950 by the IRS, which deals with estate and gift taxes. One can access Publication 950 through the official IRS website, where it clearly states that sending cash as a gift is legal ONLY as it does not involve a business transaction or recruitment of others into a business scheme, both of which are done by cash gifters as a way of making more money. This is a gray area, and

Even if the legal penalties for involvement in a cash gifting scheme are not enough to dissuade you from participation, would you really feel safe taking the risk of sending cash to a stranger in another state? There is no way of making sure your money is safe, or even knowing where it will end up, as cash gifters never display any person information on their websites other than a P.O. Box. The realistic risk of somebody posing as a cash gifter but stealing your money and disappearing should be enough to convince you to hold onto it instead.

These schemes can be tempting to anybody that needs money, but are you sure you want to obtain it by trying to convince other people to participate in something so clearly illegal? There are better ways of making money that will not lead to heavy fines and jail time. Hold onto your hard earned cash for now.

State of California, "California Law" leginfo.ca.gov

California Supreme Court, "California Supreme Court and Court of Appeals Opinions" FindLaw

United States Postal Service, "United States Postal Inspection Service" United States Postal Inspection Service

IRS, "Publication 950, Introduction to Estate and Gift Taxes" Internal Revenue Service