Birthday Blues

In this pyramid scheme, no one comes out on top.

Janine Wolfe kept wishing for her birthday to come. Days turned into weeks, weeks turned into months, and still her special day eluded her.

A friend tried to comfort her by explaining that it can take a year to "birthday," but another friend told Wolfe that she'd been awaiting hers for a year and a half. Wolfe realized that she might never be the birthday girl -- or receive the $20,000 gift she was promised.

So she turned to Yahoo! and discovered that the women-only gifting club she'd joined was illegal. She found a press release from the Colorado Attorney General's Office warning that such clubs are pyramid schemes that violate the Colorado Consumer Protection Act, as well as a Westword article explaining how the groups inevitably collapse ("'Tis Better to Receive," March 22, 2001).

Whistle-blower:  A birthday never came for Janine 
Mark Manger
Whistle-blower: A birthday never came for Janine Wolfe.

Furious that she'd been had, Wolfe e-mailed the AG's office and explained that in January 2003, a friend had invited her to a women's empowerment meeting known as the Original Dinner Party, which was held at the Henderson home of her friend's niece. The women were told that the Original Dinner Party had started twelve years earlier in Canada and had spread to almost every state in the U.S. by 2000. The host also explained that while the group isn't secret, it is private -- and completely legal -- but they would have to sign affidavits stating that the money was a gift, not an investment.

It would cost members $5,000 to join, and they would break down into smaller groups -- usually between seven and fourteen people, and, in keeping with the dinner-party theme, become "soups and salads." When four soup and salad positions are filled, meaning $20,000 has been raised, the "birthday" girl gets the money. The group then splits in two, and the soups and salads move up to the "entree" level, with the two women who were previously at that level moving into the birthday spots in the two new groups; four new soups and salads then have to be created at the bottom of each group. When the new birthday girls get their $20,000, the groups split again, and so on. Before long, there are dozens of groups.

It all sounded so simple to Wolfe, but three weeks later, on the day she was supposed to host a recruitment party at her Golden home, she turned on the television to see Oprah Winfrey warning her viewers about gifting clubs. That night, Wolfe confronted her friend's niece, who convinced her that the clubs Oprah described were completely different. "I'm a pretty trusting person," says Wolfe, a sales analyst for a storage-case manufacturer who had recently moved to Colorado from Pennsylvania. "Where I'm from, people don't just lie like that, especially to their own family, so I trusted what she said."

But her trust ran out after several months went by with no birthday and she discovered that it would be mathematically impossible to sustain the scheme; in order for the four salad-level positions to remain filled, everyone in the world would have to join, and even then, there wouldn't be enough people to keep it going.

On October 14, 2003, Wolfe e-mailed the AG's office. Attorney Rebecca Wild called her back the next day and informed her that some of the women in her group were under investigation.

The AG's office first started looking into the gifting clubs in late 2001, when Adams County District Attorney Bob Grant informed them that employees of his judicial district had been accused of promoting the Original Dinner Party and The Garden, a similar scam that's open to men. By April 2003, the AG's office was ready to file civil suits against ten principals in Adams County, all of them government employees whose job titles included deputy sheriff, collections investigator and court clerk. "We were trying to target the kingpins," says AG spokesman Ken Lane.

Those ten kingpins eventually settled their cases out of court by paying a total of $140,050 in restitution and fines. But the investigation didn't end there; participants in that group led authorities to other Adams County women, some of whom were in Wolfe's group. "It's all part and parcel of the same thing," Lane says. "Pyramid schemes are like a tentacle that spreads its arms; you chop one off and another springs up."

Although the women in Wolfe's group were aware of the lawsuits and knew that they were being watched, they didn't seem to care. Dinner Party organizer Jessica Parkhill had sent some of her friends an e-mail in June 2003 assuring them that "all they've managed to do is use some scare tactics to coerce some girls into paying some fines and supposedly keeping them out of any further investigation in exchange for more names. What they're trying to do is find someone at the 'top' of which there isn't anyone... Just go on vacation and let this thing play itself out. They'll have to give it up soon!"

Just last month, Ken Salazar's office filed suit against Parkhill and another woman in the Adams County Dinner Party ring. Between March 2001 and November 2003, Parkhill is alleged to have recruited seven women into the Original Dinner Party, hosted six to eight meetings and collected at least $20,000. Valerie Bentien allegedly acted as a "presenter" at 23 dinner-party recruitment meetings, maintained an e-mail list of 132 participants, directly got thirteen other women to join, trained other women in how to become presenters and collected tens of thousands of dollars between December 2000 and June 2003. In February, the AG's office had filed suit against two other women. Joan Schlidt stands accused of recruiting four women and of splitting some of her recruits' entry fees to enable her to "gift out" more quickly; as a result, she earned just $10,000 in one pyramid but the full $20,000 in another. So far, the defendant who's allegedly made the most money is Dina Rael, who managed to cycle through four dinner-party groups between October 2000 and March 2001 for a grand total of $80,000.

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