17 Are Arrested in Alleged ‘Pyramid’ Scam

Vice detectives infiltrated a meeting in Canoga Park and arrested 17 people suspected of operating an illegal “pyramid” scam, Los Angeles police said Thursday.

According to detectives, participants put in $500 and got back as much as $16,000 after drawing acquaintances into the meeting to contribute.

The operation depends entirely on a continuous cycle of new investors to be successful. When the flow of investors dries up, those who joined most recently lose out, Sgt. Mark Williams said.

Williams said 115 people were in the meeting hall when undercover officers stopped the meeting. Investigators interviewed the participants and arrested the alleged leaders of the operation on suspicion of promoting an “endless chain,” a misdemeanor. They were all booked and released, he said.

Police said the arrests came shortly after one of the group’s leaders announced, “This is not a Tupperware party. . . . We are here to make money. Lots of money.”