The Baltimore County Police Department is investigating widespread reports that sworn officers and others are participating in an illegal pyramid scheme that recruits players locally and pays them off in Washington, D.C., where the games are legal.
A county police spokesman confirmed yesterday that the department's Internal Affairs Unit is probing accounts that off-duty officers -- from the lowest ranks up to lieutenant, according to a departmental source -- are playing the pyramid scheme.
Some firefighters say the scheme is also popular in their department, and a top official of the county firefighters' union said the fire chief has warned his members about the illegality of the venture.
Known as "Friends Helping Friends," the scheme entices players to invest $1,500 and receive a short-term payoff of $12,000 in return.
In order to collect, players are required to recruit additional participants into the lower levels of the pyramid. Eventually, such schemes collapse, leaving the last players with nothing.
Maryland and 46 other states prohibit establishing, operating, advertising or promoting pyramid promotional schemes. (Nearly everyone who participates ends up promoting.) The pyramids are legal in the District of Columbia.
One Baltimore County police officer, who spoke on condition of anonymity, said he has been approached by several colleagues who wanted to involve him in the scheme.
"This thing is huge," he said. "People are just in it for the money. It's quick, easy money." Now, he said, many participants are concerned about the investigation -- and keeping their jobs.
Cpl. Kevin B. Novak, a county police spokesman, said, "I can't lie to you. There is an internal investigation going on. We first caught wind of this on Friday."
Originally, he said, "there were just rumors about a pyramid scheme, but we had nothing concrete about police being involved."
But he said the direction of the investigation changed after reports filtered into police headquarters that officers were among the players.
As recently as Monday, Corporal Novak said, police learned that one or two busloads of players were gathering to go to Washington to conduct a "cash-out," a term for a mass payout to early investors. But so far that report has not been verified.
Capt. William G. Kalista, commander of the Property Crimes Section, said yesterday that "there are several employees of several agencies that we hope to interview who might be involved.
"Apparently," he added, "this [pyramid] has been going on since August."
Captain Kalista would not say whether police officers are among those expected to be interviewed.
Corporal Novak said there are at least seven active cases of pyramid activities being examined in the county.
Maj. Allan J. Webster, commander of the Criminal Investigative Services Division, said yesterday that his office has initiated a sweeping criminal investigation of the entire scheme in the county.
"We are looking at how large it might be, and we will confer with the state's attorney's office with any of our findings," Major Webster said.
Meanwhile, Maryland Attorney General Joseph J. Curran Jr. said yesterday that over the last several weeks his office in Baltimore has been receiving about a dozen calls a day from Baltimore County residents asking about the legality of the pyramid scheme.
Mr. Curran, who warned the public about similar schemes in August, said callers have described being approached by sellers who invite family members or close friends to invest the initial $1,500.
"It's a terrible investment . . . because people who start up do make money," he said. "They can convince friends, colleagues at work and family members that it's a good idea. They get in early, get money and are gone.
"Greed is in back of everything in pyramid schemes. People think they can magically earn the money."
Mr. Curran said participating in a pyramid scheme is a misdemeanor punishable by a $10,000 fine and a year in jail.
Kevin O'Connor, president of the Baltimore County Firefighters Association Local 1311 said he could not comment on reports that a large number of firefighters are also playing the pyramid. He said he would have a statement today.
Mr. O'Connor said Fire Chief James H. Barnes Jr. issued a memorandum 10 days ago reminding the approximately 1,100 members of the department that their leadership "does not condone participation in the scheme."
Battalion Chief Patrick Kelly, a Fire Department spokesman, would neither confirm nor deny that the chief has sent such a memo.
"Our people know what the rules are involving illegal activities and they know what happens if they cross the line. Right now, we don't have anyone in the Fire Department involved in it that we know of," Battalion Chief Kelly said.