AKPsi Banned From Rush Due to Pyramid Scheme
January 25, 2017 at 3:20 pm
In recent weeks, pre-professional fraternities have been rushing alongside social fraternities and sororities to provide students with an alternative greek life experience. However, one of these pre-professional fraternities, business fraternity Alpha Kappa Psi, was recently barred from rushing new members.
The ban is due to an illegal pyramid scheme the fraternity set up earlier in the fall semester. AKPsi reportedly encouraged new members to pay a fee, and then recruit multiple new members themselves, also all paying fees. Members were told that they would receive a significant return on their investment later in life. AKPsi disputes this charge, insisting that this is how all fraternities work, and that the fees were necessary to provide a social and professional benefit to the members. The line between pyramid scheme and fraternity can be hazy, and some feel that AKPsi was unfairly targeted due to its nature as a business fraternity.
An anonymous member of AKPsi told us that the charges were perhaps accurate, but failed to account for the nature of Greek organizations. "Find me a fraternity or sorority which doesn't charge dues," the source said. "Everyone just assumes that because we're a business fraternity, we engage in white collar crime. We don't. We are very familiar with SEC rules. Besides, rushing new members usually falls to our most recent class— if anything, our model is a multi-level marketing program."
The SEC specifically warns people about pyramid schemes masquerading as multi-level marketing programs.
While AKPsi's short term future is uncertain, members are confident that it will live on. "We have a timeshare program coming next year that's really going to get rushes excited," one member told us.