Attorney General Targets Adams County 'Gifting Club'
Civil Suits Filed Against Court Employees, Adams County Deputy
POSTED: 2:56 p.m. MDT April 15, 2003
DENVER -- Nine Adams County Court employees and a deputy sheriff were sued by Colorado attorney general Ken Salazar for their alleged participation in two illegal "gifting" clubs.
The lawsuits, filed Tuesday, allege that the defendants violated the Colorado Consumer Protection Act by promoting the "Original Dinner Party" and "The Garden" pyramid schemes, said Salazar.
"Pyramid investment schemes are illegal in Colorado. They eventually always run out of new recruits and collapse, leaving victims in their wake," said Salazar. "The great danger of every pyramid scheme is that the only people who make money are the initial promoters."
Named in Tuesday's civil lawsuits are persons who were most active in promoting both schemes, said Salazar. They are: Joseph N. Abeyta, Valerie L. Arfstan, Anne Marie Eichinger, Tina M. Gerhardt, Lorna Kay Hein, Joyce L. Keeling, Lynette R. Merich, Margaret Beatrice Montoya, Dawn R. Sanchez, and Jamie J. Stapleton. Abeyta and Gerhardt are no longer employed by county or judicial district offices.
The lawsuits were filed following a lengthy investigation that was based on a ctip of of the alleged activity by district attorney Bob Grant.
Under Colorado law, a pyramid scheme is any program that uses a pyramid or chain process in which participants pay in excess of $50 for the opportunity to receive a much larger payoff once others are induced to join. The pyramid derives its funding primarily from money paid by newly recruited members rather than from the sale of products or merchandise to individuals outside of the program, Salazar said. He explained that so-called "gifting programs" are pyramid schemes because they depend solely upon the participation fees paid by new recruits to be able to pay off more senior participants in the scheme.
The defendants may be fined up to $2,000 per violation, plus costs and attorney fees if they are found guilty.
The "Original Dinner Party" and "The Garden" promoters targeted their co-workers within the Adams County Justice Center, according to Salazar. Both schemes promised participants a large return of money for their original investment and recruiters referred to the schemes as "gifting clubs."
The "Original Dinner Party" required members to pay a $5,000 entry fee for the alleged opportunity to receive $20,000 from future new recruits to the scheme. Many recruits took out loans or even cash advances on their credit cards to pay the entry fee. Once enrolled, the participants encouraged their co-workers, friends and family members to join in order to keep the pyramid going.
"The Garden" pyramid, which required $100 to join, rapidly expanded throughout the judicial system. The more aggressive promoters entered several times, recruited numerous co-workers and friends, and kept $800 to $2,000 each from the entry fees of these new recruits.
"The investigation into the involvement of other Adams County government employees in these pyramid schemes is ongoing and may result in additional lawsuits," said Salazar.
"Pyramid investment schemes are illegal in Colorado. They eventually always run out of new recruits and collapse, leaving victims in their wake," said Salazar. "The great danger of every pyramid scheme is that the only people who make money are the initial promoters."
Named in Tuesday's civil lawsuits are persons who were most active in promoting both schemes, said Salazar. They are: Joseph N. Abeyta, Valerie L. Arfstan, Anne Marie Eichinger, Tina M. Gerhardt, Lorna Kay Hein, Joyce L. Keeling, Lynette R. Merich, Margaret Beatrice Montoya, Dawn R. Sanchez, and Jamie J. Stapleton. Abeyta and Gerhardt are no longer employed by county or judicial district offices.
The lawsuits were filed following a lengthy investigation that was based on a ctip of of the alleged activity by district attorney Bob Grant.
Under Colorado law, a pyramid scheme is any program that uses a pyramid or chain process in which participants pay in excess of $50 for the opportunity to receive a much larger payoff once others are induced to join. The pyramid derives its funding primarily from money paid by newly recruited members rather than from the sale of products or merchandise to individuals outside of the program, Salazar said. He explained that so-called "gifting programs" are pyramid schemes because they depend solely upon the participation fees paid by new recruits to be able to pay off more senior participants in the scheme.
The defendants may be fined up to $2,000 per violation, plus costs and attorney fees if they are found guilty.
The "Original Dinner Party" and "The Garden" promoters targeted their co-workers within the Adams County Justice Center, according to Salazar. Both schemes promised participants a large return of money for their original investment and recruiters referred to the schemes as "gifting clubs."
The "Original Dinner Party" required members to pay a $5,000 entry fee for the alleged opportunity to receive $20,000 from future new recruits to the scheme. Many recruits took out loans or even cash advances on their credit cards to pay the entry fee. Once enrolled, the participants encouraged their co-workers, friends and family members to join in order to keep the pyramid going.
"The Garden" pyramid, which required $100 to join, rapidly expanded throughout the judicial system. The more aggressive promoters entered several times, recruited numerous co-workers and friends, and kept $800 to $2,000 each from the entry fees of these new recruits.
"The investigation into the involvement of other Adams County government employees in these pyramid schemes is ongoing and may result in additional lawsuits," said Salazar.
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