County official part of pyramid scheme probe

Thu, May 30, 1996 (11:59 a.m.)

A top official in the Clark County manager's office is involved in a telecommunications company that the attorney general is investigating as a possible pyramid scheme.

Senior Deputy Attorney General Margaret Stanish confirmed Wednesday her office is looking into Excel Communications, a Dallas-based discount long-distance provider.

"The company has come to our attention," said Stanish, who prosecutes telemarketing fraud. "We are doing some preliminary investigation."

Stanish would not say how Excel came to the attention of the attorney general.

"Our office gets numerous inquiries about business opportunities, multilevel franchise distributions," she said. "People rarely complain because they're part of it, but we do get inquiries."

Stanish also could not say whether Public Response Office Director Jim Foreman or management analyst assistant Maggie Greene were part of the investigation.

Greene's husband, Patrick, a former Las Vegas Valley Water District employee, also is involved in the company. He said neither he nor Foreman has been questioned by the AG's office.

Foreman refused to talk about Excel while on county time, and referred all questions to the company's headquarters. When asked if it was a pyramid-type company, Foreman said, "That's a crappy way of putting things."

County Manager Pat Shalmy said he knew of no county employees involved in any pyramid schemes, or of Foreman's or Greene's involvement with Excel.

"I never heard about it," Shalmy said when told Wednesday that Foreman was involved with the company. "I'm not sure there's anything wrong with what you described."

Foreman works under Administrative Services Director Terry Murphy, who in turn answers to Assistant County Manager Jim Ley. Ley oversees telecommunications operations and answers directly to Shalmy.

Foreman received permission in 1994 to work for Excel from Murphy's predecessor, Karen Larson, who is now in charge of special projects.

After talking to Foreman, Murphy said she had no concerns about his involvement with Excel.

Murphy said the county's main concern is that any outside jobs employees have don't interfere with their county work or pose a conflict of interest.

"If it came to my attention that something was improper, I would look into it," Murphy said. "I don't expect that with this."

Murphy said she had no knowledge of Maggie Greene's involvement with the company.

County policy requires any employee working for another business to fill out a form explaining the business and proving that it doesn't conflict with their county duties.

Personnel records show Greene has had an outside work application on file since February.

The attorney general is already investigating a pyramid scheme operation known as a gift club, or "friends helping friends network," where people are told that their $2,000 investment will grow into $16,000.

Shalmy sent notices in Friday's pay envelopes to thousands of county employees warning them that such a scheme is illegal and to contact their supervisors if they have any questions.

While Shalmy said he has heard of no county employees involved in any pyramid scheme, sources said county involvement in Excel is widespread and may include staff at the district attorney's office and Clark County Fire Department.

Sources also said representatives of Excel are pressuring their co-workers and outside county contractors to sign up for the company's services.

David Riggleman, director of the water district's conservation division and Patrick Greene's former supervisor, said Foreman has tried signing up many people for the service.

"Patrick was very involved in it," Riggleman said. "Consequently, I had to pay attention to it here."

The AG's task will be to determine whether Excel, founded in 1988, is a legitimate operation, such as Amway, or an illegal pyramid scheme.

Like Amway, Excel sells services and products and recruits new people through network or multilevel marketing -- where representatives can increase their residual earnings based on how many people they can recruit.

"Pyramid schemes come in all shapes and sizes," Stanish said. "A lot of people become confused about the difference between Amway and a pyramid scheme. That question requires a lot of analysis of the business practice of the particular multilevel."

In 1986, Amway was found by the courts not to be a pyramid scheme, but in March of this year, the 9th U.S. Circuit Court of Appeals ruled that Omnitrition was.

"Multilevel marketing cases are complex because they require a lot of resources and review," Stanish said. "We want to make sure we're not falsely accusing anybody. The inquiries could take a very long time."

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