4 Are Charged in Illegal Pyramid Scheme

Four Los Angeles residents, including three from the San Fernando Valley, were charged Thursday with running an illegal pyramid scheme in which they told potential participants they would make $16,000 on a $2,000 investment, authorities said.

Lee Eldon Valentine, 24, of Northridge, Scott Matthew Reiss, 35, of North Hollywood, Glenda Sue Blackwell, 54, of Burbank, and John Mendoza, 33, of Silver Lake were charged with one count each of operating an endless chain scheme and one count of making false and misleading statements, said Los Angeles City Atty. Jim Hahn.

Operating an endless chain scheme is punishable by one year in jail and a $1,000 fine, while making false and misleading statements carries a maximum penalty of six months in jail and a $2,500 fine, Hahn said.

The charges stem from an arrest made last November by vice officers from the LAPD Devonshire Division, according to P. Greg Parham, the deputy city attorney prosecuting the case.

The officers posed as potential participants by attending a meeting of the Platinum Gift Club--the name the leaders gave their organization--at Valentine’s home, Parham said.

The officers allege that at the meeting, Reiss told prospective participants they could multiply their money in just five weeks.

Reiss and Blackwell also told their audience that each of them had already made $32,000 from the game, according to the officers.

The officers told Parham that Mendoza was also involved in recruiting participants and that the officers had recovered documents indicating that Valentine was the chairman of one of the games.

Information sheets distributed at the meeting included false and misleading statements about the legality of the Platinum Gift Club, tax consequences and statements purportedly made by law enforcement officials about the game, Parham said.

The four are scheduled to be arraigned July 10 in Los Angeles Municipal Court.