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Show .10 ideraf If led wifh illegal pwarkj scheme 'Vernal City Police have identified tut 100 Uintah Basin residents who 1 ( involved in an illegal pyramid i jane and have turned in names of 40 1 50 solidly involved in the schemes to e city attorney for possible prosecu-m. prosecu-m. J Police have been closely following e pyramid scheme in the area since it is first introduced by a Californian itilied public accountant, Police iff Robert Downard said. s The pyramid scheme works on a """metric progression of two, Downard 3 'lined. The progression begins with person at the top, then two, then and eight, until sixteen persons, generations, have entered into the imid. Each person in the pyramid its others to join at a cost of $2,000, $1,000 going to the promoter and 1 Low to the person at the top. When the feramid reached the fifth generation, K number one person, first genera-Ion, genera-Ion, receives $16,000 and the pyramid flits in two. Then the two second derations are next in line to receive 11,000 and 32 people are needed to corn-fee corn-fee the two pyramids. According to City Attorney Richard Wdson, the penalty for participating i the pyramid scheme is a Class A ttmeanor with a $1,000 fine and or P to a one year jail sentence. 'There is no way the scheme can pay B 16 people and not have 15 losers," Wson said. "It's just a reallocation w money." According to Downard the scheme bating in the Vernal area is under f fliise of an "investment op- )' ft portunity," but is a typical pyramid scheme. The prime mover in this scheme misrepresents the operation as a legitimate business venture. "They have secret meetings, code . names, easily destroyable charts, and request law enforcement persons to leave at the beginning of their meeting, yet they say their operation is legal." Downard indicated that Salt Lake City Police raided a similar scheme which may be a spin off of the Vernal scheme. He said the person who brought the scheme to this area is believed to have been apprehended in connection with the Salt Lake City scheme. "Because of pressure from law enforcement en-forcement agencies, local promoters may push hard to gain as much money as possible before they are forced out," Downard added. According to figures released by Curtis May, math instructor, in order for the fifth generation to be paid off, 1023 people must be involved, but persons of any stage can be successful by recruiting 32 persons into his individual in-dividual pyramid. "People are gambling that they are in the top stages of the pyramid and that the pyramid will continue," Downard said. Although no one has been arrested in connection with the Vernal pyramid scheme, action may occur by the end of the week to stop the pyramid from involving more people, Downard said. According to Davidson, all that is needed to prosecute a person is a witness someone who has been introduced in-troduced to the scheme and is willing to testify. |