140 Misc.2d 604, 531 N.Y.S.2d 497
James C. COYLE, Plaintiff,
v.
Gene RICHETTI and Doran Richetti,
Defendants.
District Court of Nassau County, Second
District,
Hempstead Part.
July 29, 1988.
B. MARC MOGIL, Judge.
DECISION AFTER TRIAL
He who places his hand into a stranger's
blazing fire to gather in coins belonging to
another, scorching his fingers in the
unsuccessful attempt, has neither anyone
to blame nor any recourse at law. The
result is self-inflicted and predictable.
The Court was presented at a trial on
July 22, 1988, with the rather unique
attempt by a player in a so-called
"pyramid investment game" to recover a
portion of his lost ante ($1,500.00).
James Coyle, of Woodside, Queens, and
friends, attended a pyramid-scheme
gathering at the North Merrick home of
Gene and Doran Richetti on August 20,
1987. The multiple participants in and
about the premises were previously
strangers and unrelated, other than by
their mutual desire to "make *605 a quick
killing" and a "fast and easy buck." All at
trial so admitted.
Each player, with cryptic code names or
numbers to circumvent possible detection
in a scheme all knew to be of at least
questionable legality, placed units of
$1,500.00 in cash within separate white
envelopes, tendering them to those higher
up on "the pyramid." The higher one
climbed, and the more players brought in,
the bigger the potential profit to be made.
So it went theoretically.
Practically all was apparently going rather
well, too, until Newsday reported the
arrest by undercover investigators of six
other Long Islanders in an identical game.
The players in North Merrick panicked in
unison upon reading the newspaper that
evening, demanding outstanding monies
from the holders. As with any other house
of cards, it came solidly crashing down on
everyone as quickly as did the banks
during the Depression. Everyone seemed
to be a loser.
Mr. Coyle, however, now wishes this
Court to rescue him and put him whole, as
if he had not willingly exposed himself to
the illegal and substantial risk.
Despite the general provisions of General
Obligations Law Section 5-419, permitting
the recovery of sums lost at various illegal
betting ventures, the Legislature has
sought to isolate pyramid schemes from
losses at games of chance contingent
upon the happening (or not) of some
specific event. Section 359-fff of the
General Business Law makes such
pyramid schemes misdemeanors
punishable by jail or fine, or both, upon
conviction.
The Courts in New York have almost
never had to deal with such a brazen
recovery **498 attempt. The only
published decision available to this Court
is the Matter of Schaffer v. Talerico, 118
Misc. 66, 459 N.Y.S.2d 716, a 1983 Utica
City Court decision which denied such a
claim from a disgruntled Amway products
pyramid-scheme participant. The Court
there refused to enforce the pyramid
agreement as against public policy.
All participants before this Court clearly
knew they were pursuing a "quick buck,"
something for nothing, and putting their
fingers into a blazing fire of risk. As such,
this Court under the rules of law and
equity, refuses to be used to enforce a
clearly illegal and risky venture, under the
same standards of public policy.
Our Courts are far too busy assisting
innocent and legitimate victims of wrongs
to rescue open-eyed, unsuccessful
pyramid-scheme participants; we
generally will not aid a *606 party to an
illegal contract by undoing that which has
already been done, (see, Silvera v. Safra,
79 Misc.2d 919, 361 N.Y.S.2d 250; see
also, Stone v. Freeman, 298 N.Y. 268, 82
N.E.2d 571).
As such, the Court must deny the
plaintiff's claim, with judgment for
defendants. The defendants, however,
may have prevailed here: however, the
end of the tale may not yet be written,
since from the evidence adduced, this
Court is hereby constrained to transmit
copies of its decision, (as well as opening
the transcript and exhibits in the file), to
the Nassau County District Attorney, our
Police Commissioner, and the New York
Regional Office of the Internal Revenue
Service.
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