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Pyramid scheme prompts warning Attorney General Hardy Myers issued a warning Tuesday to residents of Southern Oregon who participate in an illegal pyramid scheme called Northwest Family Reunion. People who try to recruit new participants in the so-called "gifting" pyramid could be fined $25,000 a head if caught, Myers said. The scheme is thought to be most active in Jackson, Josephine, Klamath and Lake counties. "The name is new but the scheme is not," Myers said. "We have dealt with similar gifting pyramids since 1994, and we have little tolerance for pyramid organizers and participants." According to Northwest Family Reunion literature, phrased in terms of race-car driving, new recruits make a "gift" of $2,000 to join the pyramid at the bottom as part of an eight-member "pit stop." By recruiting a continuous chain of new members, participants supposedly can advance to "mechanics" and "pace car drivers." They reach the top as "lead drivers" -- along with a $16,000 payoff. To help avoid authorities, prospective players are told the scheme is legal because it is a gift between friends and family. Moreover, they are also told they are not required to report their "earnings" to the IRS and that the attorneys general of Oregon and Washington have approved the scheme. Myers said such claims are false. "All pyramids are illegal because they are destined to collapse, making money for a few at the expense of many," Myers said. Investigators with the state Department of Justice, working with authorities in Klamath County and the Washington Attorney General's office, have received reports of millions of dollars being illegally transported across the Washington/Oregon border, Myers said. Failure to stop recruiting and return money to recruits may result in legal action, he warned. For more information on Northwest Family Reunion, call the Attorney General's consumer hotline at (503) 378-4320, or write Financial Fraud/Consumer Protection, 1162 Court St. N.E., Salem, OR 97310. Today's Business Index Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA