LAW421 Week 5 DQ Option#1

timer Asked: Nov 5th, 2013

Question description

Mike Musclehead has started a new job selling gym memberships door-to-door. Mike decides, without knowledge of the gym owners, to add a twist; he starts selling a "lift-a-pound" investment program. For $100 you buy into the program and every time you increase your maximum lifted weight, you get $1 per pound. Mike pays the rewards from the money he collects as investments in the lift-a-pound program. Mike is addicted to the high life and uses part of the investment funds to buy clothes, a new car, a sweet apartment, etc. Soon enough, there are not enough new investments coming in to keep up with the rewards. 

Disappointed investors sue the gym and Mike. What claims might they have? Would the police have any interest in this matter? Why or why not?

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