Authorities Say 8 Women Operated $12 Million Pyramid Scheme

Associated Press/October 27, 2002

Sacramento, Calif. -- Eight women have been charged with fraud in what the authorities say was a $12 million pyramid scheme in which women were invited to parties in beauty salons and homes and promised the opportunity to help their community and make money for themselves.

The network, called Women Helping Women, held parties featuring a "birthday girl" who would receive up to $40,000 from the participants, each of whom had donated up to $5,000 to get in and was counting on eventually celebrating her own "birthday." For many women, the birthday party never came.

Four Sacramento-area women were arrested on Oct. 3 on fraud charges, and four more women were charged this week.

The parties, the authorities said, were part of a pattern of pyramid schemes found in nearly every state. Recently, 30 people were indicted in New Mexico on charges of running similar schemes.

The scheme has also surfaced in Texas, where two women were arrested in 2000, and in Philadelphia, where the authorities said last year that a dozen women had complained about a similar network.

In Maine, the attorney general warned last year of a similar scheme that concentrated on men, sometimes using the names Nascar or Men's Club.

In Sacramento, the four women arrested in early October face charges that could bring five years in prison. They are Cheryl Bean, 54, a former personnel officer at Pacific Bell; Anne Marie King, 47, the co-owner of a Montessori school; Pamela Garibaldi, 57, a part-time English professor at a community college; and Cathy Lovely, 49, a homemaker. None have entered pleas. Four more women, two of them Ms. Garibaldi's adult daughters, turned themselves in on Wednesday and Thursday.

Detectives said the enterprise in Sacramento boasted of getting 10,000 women to participate in the last two years.

Investigators said each woman had to recruit eight others to get her $40,000. Each of those eight women then had to recruit another eight. Eventually the pyramid collapses, with most participants losing their money.