‘Gifting’ Motion Denied; Trial Ordered

A hearing in Benton County Superior Court Thursday failed to resolve the legality of programs that have induced hundreds of Washington residents to “gift” money to family members, friends and co-workers.

Judge Craig Matheson denied a request from the Washington Attorney General’s Office that the programs be ruled violations of Washington consumer protection laws and a second statute barring chain distributor schemes.

The attorney for 13 Kennewick residents charged with violating those laws asked the judge to dismiss the state’s case.

Matheson did neither, but set the case for trial. No date was scheduled.

Assistant Attorney General Owen Clark Jr. said he had hoped a trial would be unnecessary because both sides agreed to the facts in the case.

But, Clark said, Matheson wanted to determine whether participants in the scheme regarded their payments as investments or gifts.

State authorities argue that “gifting” is basically a pyramid scheme in which participants pay money to others with the promise of a payout several times larger when it’s their turn to be gifted.

The schemes have names like Pit Stop, Dinner Party, Original Dinner Party and Women Helping Women.

Spokane attorney Duane Schofield estimated Dinner Party and Original Dinner Party participants in Spokane County alone had exchanged more than $3 million.

In October, he won a judgment against promoters of Dinner Party on behalf of clients who said they were taken for $3,500.

That decision was rendered by Superior Court Commissioner Joseph Valente. But commissioner rulings do not have the legal weight of those rendered by a judge.