By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
It was during that trip to New York that Gloria got the news that the jig was up. "We're done," said one of her co-conspirators by phone. Four years earlier, then-Senator Walter Mondale had proposed a federal bill to make pyramids illegal. Mondale described the legislation as "one of the most important consumer protection measures currently before the Senate," and described pyramids as an "outrageous, indefensible, cruel, and widespread practice in America today." The SEC, Mondale said, estimated that pyramid schemes took in approximately $300 million a year from Americans. That number, he added, was "a very conservative estimate."
The bill died, but in a letter to Mondale backing the need for federal legislation, Warren Spannaus, then attorney general of Minnesota, described pyramids as the "Number one consumer fraud problem which I have faced in my nearly four years as attorney general of the state of Minnesota." Six months after Gloria signed on, Spannaus started arresting people who were holding pyramid parties. Minnesota law now makes illegal any "plan or operation in which a participant gives valuable consideration for the opportunity to receive compensation based primarily from introducing one or more persons into the plan or operation."
"We thought we were fine because we were just exchanging gifts through the mail," says Gloria. "But they told us that because there was no product we were selling, it was illegal. They said all we had to do was sell a button or something." She blames the media for misrepresenting her and her friends' work and fun as something untoward. She hasn't joined a pyramid since.
But not everyone remembers Gloria's pyramid so fondly. One 19-year-old Catholic kid, a former altar boy from the neighborhood, had mailed off his $50 when the pyramid was just starting to reach impressive heights. His older brother, a blossoming punk rocker, did the same. They watched and waited, tracking their names from the bottom to the top. They even hosted a pyramid party in their parents' home, which drew strangers from all parts of the city. In fact, they were just one name—one winner—away from receiving money when the attorney general toppled the pyramid for good.
Twenty-five years later, I'm still checking the mail, looking for greeting cards with $50 inside, and cursing the name Warren Spannaus.