Four alleged scam artists have been arrested in a crackdown on an apparently widespread version of the old pyramid scheme called the "airplane game," Los Angeles police said Wednesday.
Lt. Fred Reno, officer in charge of the department's Bunco-Forgery Division, said there may be as many as a dozen of the illicit pyramid or endless-chain games operating in and around Los Angeles.
Reno said that about 250 people attended the Tuesday night session at a private meeting hall in the 8000 block of West Beverly Boulevard. The promoters, described by Reno as slick and professional, had just finished their pitch and were about to start collecting $1,500 from each new player when he and his team of 16 plainclothes and uniformed officers made the arrests.
"We knew there was another meeting going on simultaneously in another part of the city, but we just can't be two places at once," Reno said.
Although it is a violation of the law even to attend a pyramid scheme meeting, only the promoters of the game were arrested Tuesday night, Reno said. However, names of all who attended were taken down, and if the same people show up at other airplane game meetings they will be subject to arrest, according to Reno.
In the latest scheme, participants sign up for a fee of $1,500, becoming part of an eight-person "airplane." As the game widens its scope and more people are recruited, those who reach the top of the pyramid become the "pilot" and collect $12,000 from those at the bottom.
Reno said that despite the convincing spiel that goes along with the organizing of the game by its promoters, "it is mathematically impossible for all of the people who participate to win. . . ."
Certain people (in the game) at the beginning may get a little bit ahead financially," he said.
Cited and Released
Arrested on misdemeanor felony charges as alleged promoters of the game were Los Angeles residents William and Shirley King and Sherry Bezani, 35. Michael Olivestone, 39, of Beverly Hills was also arrested. The four were released on field citations and are scheduled for arraignment in Municipal Court on April 16.
Tuesday night's raid came after tips from a number of civilians. Police said one was a businessman who got angry because so many of his employees got involved in the game that it substantially reduced productivity.
"Our intent," Reno said, "is to crush it (the spread of the game) as fast as we can before it gets out of hand."
Another airplane game was broken up last Thursday in Orange County. Stanton police said they arrested Donald J. Rackerman, 56, as he was organizing a scam in a local hot rod shop. In that case, police also cited 132 people for being present while an illicit game was being played.
The last major outbreak of the pyramid scam--then called "business list concept"-- was in 1980, when it quickly spread from coast to coast and involved uncounted thousands of victims.
The airplane game reportedly is being played in Washington, Dallas, several cities in Northern California and in Santa Barbara and San Diego.