FIGHT BACK!  BY DAVID HOROWITZ

Chain Letters by E Mail
        
        I recently received an interesting letter by electronic mail
from Ray and Rita  Normandeau in New York City concerning chain letters
showing up on various  computer bulletin boards around the country. The
Normandeaus quoted portions  of a chain letter posted by someone named
Dave Rhodes, and that rang a very  loud bell in my mind. The "Dave
Rhodes" letter has been around for years. I  mentioned it in a column
back in 1990, but it's much older than that.

        The letter begins with Rhodes' tale of woe. He was in debt. His
car had  been repossessed. All he wanted to do was buy a house and send
his kids to  college. Today, Dave Rhodes is supposedly a millionaire,
and you could be, too.  Just send a dollar to each person on the list,
add your name to the bottom, and  send out a hundred copies to the names
on a list, available separately for a small  additional fee.

        Dave Rhodes may be a person, or a lot of different people, or no
one at all.  All we know about him is that his name appears at the top
of thousands of chain  letters being mailed, and now posted on bulletin
boards, all over the United  States. Similar letters are often
distributed under the name Philip A. Brown,  Attorney at Law.

        Some bulletin-board chain letters cite sections of the U.S. Code
to prove  that they are legal, specifically 18 USC 1341 and 1342
governing lotteries and  fraud by mail. But as the Normandeaus pointed
out in their letter to me, the  following section, 18 USC 1343, defines
those same activities as wire fraud  when conducted by phone line, which
includes computer e-mail. And the  penalties are exactly the same --
$1,000 fine and/or five years in prison for each posting or upload. ***

        Pyramid schemes are close cousins to chain letters. They both
depend on  endlessly recruiting new members to feed cash into the game,
which is then  skimmed off by the people at the top. Last month, state
and federal authorities  began cracking down on a group calling itself
We The People (which has no  connection whatsoever with the Ross Perot
organization of the same name.)

        Investigators say the group took in millions of dollars from
people all over  the country by selling certificates for $300 that
supposedly entitled the buyers to  millions of dollars in gold -- just
as soon as the United States goes back on the  gold standard. As new
buyers came into the scheme, those higher up in the  pyramid reportedly
each got a cut of that $300. We The People also allegedly  sold shares
in various lawsuits it has filed against the U.S. Government.

        In a similar action last summer, authorities in 13 states broke
up a scam  called The Friends Network. It had spread like wildfire
through families, churches,  schools and civic groups. Players were
required to pay the person who recruited  them $1,500 as an
"unconditional gift," then bring in at least one other player.  Here
again, as the money moved toward the top, everyone higher up in the
chain  got a piece of it, which leaves out everyone at the bottom.

        And that's how it always ends. No pyramid scheme can grow
forever, and  when it finally collapses, as it inevitably must, the
people at the bottom are left  wondering where their money went. A few
winners and many, many losers.  Which is precisely why chain letters and
pyramid schemes are illegal.

        If you have any questions or comments, please write to David
Horowitz in  the Consumer Forum+ (go FIGHTBACK). COPYRIGHT 1994 CREATORS
SYNDICATE, INC.