Oregon Department of Justice

Attorney General Ellen F. Rosenblum

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Sherman County Residents Agreed not to Organize or Participate in Illegal Pyramid Clubs

September 2, 1999

Attorney General Hardy Myers today announced that three Sherman County residents agreed not to organize or participate in illegal pyramid clubs. Under the terms of Assurances of Voluntary Compliance filed today in Sherman County Circuit Court, the three also will return money they obtained by participating in a pyramid known as Northwest Family Reunion, Jubilee and Creating a New Paradigm.

Named in the agreements, which admit no law violation, are Kate Martin, A Sherman County Justice of the Peace, and Sarah Irzyk, both of Moro. Also named is Linda Beers of Rufus.

"Pyramid schemes attract a wide variety of participants who are unable to resist the promise of easy money," Myers said. "Participants need to understand that pyramids are illegal because they inevitably collapse. As a pyramid grows, the odds that people will lose their money grow exponentially."

Several "gifting" pyramids currently are operating in Oregon under a variety of different names, including Northwest Family Reunion, Jubilee and Creating a New Paradigm. The Department of Justice first received reports about active pyramids in July. At that time, pyramid activity appeared to be focused in the Southern part of the state, but it quickly spread elsewhere.

According to literature promoting the schemes, participants pay $2,000 to $6,000 "gifts" to join the pyramid. As new members are recruited, participants work their way up the three or four-tier pyramids and receive payoffs of $16,000 to $48,000. Most of the pyramids use car racing or agricultural terminology.

Under the terms of the assurances, Martin, Irzyk and Beers will immediately, and to the best of their ability, provide restitution to everyone they received money from under the scheme. In addition, Martin paid $4,000 to the Department of Justice to fund future consumer protection and education activities. For their parts, Irzyk paid $1,250 into the consumer education fund and Beers paid $3,000.

"In July, I alerted Oregonians about the possible consequences of participating in unlawful pyramids," Myers said. "Until all of the current activity has ceased, we will continue to pursue other key participants."

Consumers with information about active "gifting" pyramids in Oregon or those with questions about pyramids in general may call the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only) or toll free 1-877-877-9392. Information on pyramids also is available through the Department of Justice web site www.doj.state.or.us.

Contact:

Jan Margosian, (503) 947-4333 (media line only) jan.margosian@doj.state.or.us |
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