Pyramid payments

On July 31, the 14th Court of Appeals in Houston upheld the conviction of Harvey Joseph Dockstader Jr. for “promoting a pyramid promotional scheme.” It also affirmed a two-year sentence for Dockstader and a $10,000 fine. In his appeal, Dockstader made one seemingly original argument: that Texas’ pyramid promotional scheme statute, Texas Business & Commerce Code §17.461, violated his First Amendment freedom of religion. He claimed his Web site, dubbed Elite Activity, was inspired by God and based on the teachings of the Bible. The court found that he waived the issue, however, by not raising it in the trial court. Dockstader’s pyramid promotional scheme, the court states in its opinion, invited people to participate in a "cycle of abundance" through the giving and receiving of monetary "gifts." In other words, you pay money to join, and then you recruit new members who pay you, and so on. Eventually, the whole scheme collapses when new suckers can no longer be recruited, and whoever gets in last loses the most. While it’s good that counties have consumer fraud divisions that investigate and prosecute this kind of wrongdoing, it’s hard to feel bad for the victims in this case — but then again a lot of people out there know almost nothing about finances and are easy prey for operators like Dockstader.
-- Jonathan Fox