Judge rules in favour of pyramid scheme victim

HANK DANISZEWSKI , London Free Press Reporter, 2003-10-02 03

Jan Fulkerson, one of many London-area women who lost in the so-called
Muffin Club pyramid scheme, should get her money back, a London judge
has ruled. But the lawyer for Delores Roberts, the woman Fulkerson
sued for the return of her $5,000, said yesterday the judgment will be
appealed.

In a complex 24-page decision, Deputy Justice Clifford Reeves said
although the pyramid scheme was illegal, Fulkerson was entitled to a
refund because her cheque was deposited to Roberts's account and never
delivered to operators of the scheme.

"She was not attempting to enforce an illegal contract. She was
seeking restitution of money wrongfully converted to use by Delores."

He ruled Fulkerson also made a quick effort at "repentance" by asking
for her money back.

Fulkerson, a London realtor, said the four-year legal battle in small
claims court was worth the effort. She said she has received at least
a dozen calls from other women who lost money in the scheme.

"It's certainly good news for the thousand other woman who got
burned," Fulkerson said. "We've highlighted that it is a winnable
case."

But Roberts's lawyer, Michael Lerner, warned potential claimants the
case was far from over. He said Reeves appeared to ignore some
significant facts in his decision.

"Anybody inclined to come forward would probably want to wait for the
outcome of the appeal."

The Muffin Club was the name for a pyramid scheme that started in the
Barrie area and spread through the province.

Women were invited to attend parties where an "investment" scheme was
pitched. They were asked to bring cash, often using muffin tins.

In November 1999, Fulkerson attended a gathering hosted by Roberts and
her daughter, Julie Scapinello.

Fulkerson gave Roberts a cheque for $5,000.

She testified she tried to get the money back from Roberts and
Scapinello soon after but they refused to return it.

Roberts, Scapinello and Fulkerson all testified they did not know the
scheme was illegal until January 2000, after reading articles in The
Free Press.

Roberts said she got involved in the scheme after attending a meeting
held by a woman named Linda, whose last name nobody seemed to know.

Lerner argued Fulkerson was driven by greed and wanted to profit from
the scheme, offering the names of her daughters as potential
investors.

He noted under provincial law, anyone who loses money in an illegal
scheme is not entitled to sue to get it back.

Fulkerson's lawyer, Cynthia Mackenzie, noted the provincial
Competition Act does allow victims of a pyramid scheme to recover
damages under certain conditions.

Reeves was left to sort through a stack of case law on the issue. He
ruled the Gaming Act did not apply because no one in London was
prosecuted for the scheme.

He also said he believed Fulkerson's claims she wanted her money back.

Copyright (c) The London Free Press 2001,2002,2003