Firemen charged in 'pyramid' scheme Up to 80 members of Balto Co. police face administrative action

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 around the state participated in the game -- which provided a $10,500 return on a $1,500 investment -- only alleged organizers and top-level assistants were targeted.

A spokesman for the attorney general's office said the office does not expect to file further charges. But two sources told The Sun that the investigation could 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 Sun sources, traveling last fall and winter by the busloads to Washington to invest and receive payoffs.

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 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 locally popular "Friends Helping Friends" or the "Friends Network Gifting Program" that operated in southern Pennsylvania until both schemes unraveled last winter.

Until then, Marylanders thought that they could skirt the state law by attending organizational and payoff meetings in Washington, where pyramids were not specifically prohibited. The game exploded from hundreds to thousands of players in a relatively short period, district officials found. But by December, the scheme showed signs of collapse.

Lieutenant Nace, 42, of the Northwind Farms area in Perry Hall, was indicted on charges of conspiracy, violating the Maryland Pyramid Scheme Promotional Law and filing a fraudulent 1994 Maryland income tax return.

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

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

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

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

Mr. Mather has an unlisted telephone and 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, a spokesman, said late yesterday that the department had not been informed officially about the charges. The men could be suspended, but probably will be allowed to remain on duty given the nature of the charges, he said.

Chief Hubbard said the fire department did not conduct an 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.

Though no one in the county Police Department was charged, "we anticipate some kind of administrative action to take place regardless of the fact they were not charged criminally," said Capt. Brian Uppercue, a police spokesman.

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