3 firemen charged in 'pyramid': Up to 80 members of Balto. Co. police face administrative action: Game violates state law: Organizers promised $10,500 return on a $1,500 investment

November 07, 1995|By Joe Nawrozki and Robert Erlandson | Joe Nawrozki and Robert Erlandson,SUN STAFF Sun staff writers Dan Thanh Dang and Sherrie Ruhl contributed to this article.

Three Baltimore County firefighters were charged yesterday and as many as 80 members of the county Police Department face possible administrative action in connection with an illegal "pyramid" scheme last year.

A Baltimore County grand jury indicted fire Lt. Michael Steven Nace on charges of conspiracy and evading state income taxes.

The state attorney general's office filed charges against two fellow firefighters from the Fullerton Station.

As many as 80 members of the Police Department -- 40 to 50 sworn officers and 25 to 30 civilians -- were investigated for their alleged participation and could face administrative action after an internal investigation.

While it was believed that tens of thousands of Baltimore-area residents and others participated in the game -- which provided a $10,500 return on a $1,500 investment -- only alleged organizers and assistants were targeted.

Investigators wouldn't explain why the three firefighters and nobody else, including the police officers, were charged after a yearlong investigation. A spokesman for the attorney general's office said based on current information, the office expects no further charges. Two sources told The Sun, however, the county investigation may lead to at least one more alleged high-ranking pyramid organizer in Baltimore.

The indictment comes in an investigation that examined members of the fire and police departments who were, according to The Sun sources, traveling last year by the bus loads to Washington to invest and receive payoffs there.

In the version popular with Baltimore-area residents, players invested $1,500 and hoped to collect $12,000 after recruiting up to eight other players -- or "vice presidents" -- who similarly invested and climbed the pyramid as the process was repeated.

Investing in or promoting a pyramid scheme is a violation of a Maryland law that prohibits ventures such as the popular "Friends Helping Friends" or the "Friends Network Gifting Program" that operated in Pennsylvania until both unraveled last winter.

Until then, Marylanders thought they could skirt the state law by attending meetings in the nation's capital, where pyramids were not specifically prohibited. The game exploded from hundreds to thousands of players, district officials found. But by December, the scheme showed signs of collapse.

The most serious charges are against Lieutenant Nace, 42, who lives in the Northwind Farms area in Perry Hall. The grand jury indicted him on charges of conspiracy, violating the Maryland Pyramid Scheme Promotional Law and filing a fraudulent 1994 Maryland state income tax return.

Criminal informations alleging a violation of the pyramid law were filed against Fire Specialist Michael K. Day, 31, who lives in Northwind Village. Mr. Day also is charged with conspiracy.

Michael T. Mather, 36, an emergency medical technician who lives in Fallston, is charged with a lottery scheme violation.

Lieutenant Nace last night refused to discuss the indictment as did his attorney, Steve Shenning.

Mr. Day declined to comment on the charges but said, when it was noted the attorney general's office had emphasized that the men now are presumed innocent, "I'm well aware I'm innocent."

Mr. Mather could not be reached last night.

Deputy Attorney General Ralph S. Tyler said the maximum penalty for violating the pyramid statute, a misdemeanor, is a $10,000 fine and a year in jail.

Battalion Chief Mark F. Hubbard said yesterday the department had not been informed officially about the charges. Although the men could be suspended, they probably will be allowed to remain on duty given the nature of the charges, he said.

Chief Hubbard said the Fire Department conducted no investigation when reports of involvement by police officers and firefighters in the pyramid games surfaced last year. "We turned everything over to the Police Department and the attorney general's office as soon as we heard about it," the chief said.

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