Some Pyramids Just Shouldn’T Be Explored Authorities Warn Of Schemes Duping Citizens Out Of Thousands Of Dollars

Don’t go to a “Dinner Party.” Especially one with a “Birthday.” And don’t make a “Pit Stop,” law enforcement officials warned Friday.

Those terms all have been attached to pyramid schemes that are scamming hundreds of participants out of tens of thousands of dollars, they said at a news conference called to dispel claims that the promotions are legal.

“These things are nothing more than a con game,” said Coeur d’Alene Police Sgt. Robert Pharris.

He said the department, which broke up a large scheme two years ago, is hearing reports of others that may soon be circulating in the area.

Idaho Assistant Attorney General Michele Butts said one scam to look out for is the Pit Stop, which bilked Boise-area participants out of hundreds of thousands of dollars.

“We had one individual walk away with $300,000,” she said. “It was a pretty shocking situation.”

High school students and supermarket boxboys were among those victimized, she said, adding there are indications Pit Stop is moving north.

“It can be devastating to a community when the pyramid collapses, especially a small community,” Butts said.

Promoters of pyramid schemes in Idaho are subject to both criminal and civil penalties.

Butts said five Pit Stop participants agreed Wednesday to pay $4,000 in penalties and refund more than $40,000. Restitution from another 35 participants is expected, she said.

Washington legal and consumer protection officials said they are being inundated with inquiries about Dinner Party and other “gifting” organizations.

“Every third call we’re getting is asking about these pyramid schemes,” said Jan Quintrall, president of the Spokane Better Business Bureau.

She said promoters sometimes target women with marital or financial problems. They suggest the programs are a way out, she said.

“That’s what makes it so insidious,” Quintrall said. “There are so many people in that situation.”

Cathy Loan, chief executive officer of the Spokane Catholic Credit Union, said her employees are reporting large cash withdrawals by members who don’t want their spouses told.

Many claim to have letters declaring the programs legal, she said.

Loan noted that individuals recruiting for the programs often turn to friends and co-workers.

“People need to think about benefiting from schemes that victimize others,” she said.

Sacred Heart Medical Center spokeswoman Marilyn Thordarson said the hospital has warned its employees that recruiting while at work is a violation of policy.

The advisory was prompted by questions and concerns brought to the hospital’s human resources office, she said.

The in-house alert quickly brought inquiries from other employers, Thordarson said.

Washington Assistant Attorney General Owen Clarke said promoters use terms like gifting or suggest charitable motives to conceal the nature of their enterprise.

They also cite the Legislature’s failure to toughen penalties for pyramid and gifting scheme promotions to justify the claim they are legal.

In fact, he noted, individuals can be fined up to $2,000 for each solicitation they make.

“It is nothing more than an age-old scam that separates people from their money,” Clarke said.

He noted the state filed suit in March against 12 individuals promoting a pyramid scheme in the Tri-Cities.

Lt. Gill Moberly of the Spokane Police Department said a huge caseload makes it difficult to devote resources to tracking the promotions, but detectives are monitoring developments.

The city is also helping Canadian authorities, who have successfully prosecuted those active in pyramid schemes.

Moberly said he receives many calls from participants who believe passionately in the promotions.

“The thing that’s spreading is greed,” he said.

Bert Caldwell can be reached at (509) 459-5450 or by e-mail at bertc@spokesman.com