Eight, Including Ex-D.A., Held in Pyramid Scheme

In the second such case this month, eight people, including a former deputy district attorney, were charged Wednesday with promoting a pyramid scheme called Next Wave, City Atty. James K. Hahn announced.

Warning that such games appear to be proliferating under different names, Hahn said, “The Next Wave is only the next wave in pyramid schemes.”

Hahn said the promoters of the Next Wave lured participants by promising them a quick $12,000 return on an outlay of $1,525 provided they brought in eight new investors.

4 Charged in Airplane Game

Four other people were charged April 15 in connection with another alleged chain scheme called the Airplane Game. The Next Wave is a version of that game, Hahn said, except that it is promoted as leadership training seminars.

But tapes made by undercover police officers of these seminars showed that “what was actually happening basically was a lot of gobbledygook about how . . . the real way to prove that you were a leader was to get other people involved (in the scheme),” according to Hahn.

The defendants in the Next Wave case were arrested April 1 after police, acting on tips from informants, infiltrated a workshop at a hotel near Los Angeles International Airport, Hahn said.

Among those arrested and later charged with the misdemeanor crime of operating an endless chain scheme was Jonathan Robert Adler, 46, a Pacific Palisades lawyer who served as a deputy district attorney from 1980 to 1983.

Adler, who is representing the other seven defendants, said the arrests occurred while organizers were designing “full-blown, long-running . . . transformational seminars” on the order of Werner Erhard’s est. He described the Next Wave as “uniquely marketed seminars with multilevel commission opportunities.”

Claims Only to Be Counsel

In his own defense, Adler said he served as a lawyer to the group, with no other connection to the seminars.

Also charged were Wain H. Phillips, 36; Loril Maxine Paluzzi, 34; Sharon Ann Biggs, 40; Maralena Frost, 40, all of Los Angeles; Kelly Gail Holland, 34, of South Pasadena; Joel Burnett Heathcote, 48, of Santa Monica, and Jack Phillip Barnard, 45, of Venice.

Arraignment was set for June 2 in Los Angeles Municipal Court. If convicted, the defendants face up to one year in jail and/or a $1,000 fine.

Hahn said that pyramid schemes “seem to crop up every seven years” and that the latest round arrived in Los Angeles only a few weeks ago by way of Texas.