Between November and December of 2009, Shelley Marcus did some legal research into the contingent transactions statute, sometimes called the pyramid statute. She said she found only one case that dealt with the statute, and was researching the matter as a civil offense. She also thought about a possible defense. The contingent transactions act, she said, focused on sales of merchandise, services, rights or privileges.
Arguably, the gifting table activity was not covered by this definition, Marcus said.
But after signing on as a client of the Marcus Law Firm for a $5,000 retainer, Bello later wrote to request a refund. She said it could be a conflict of interest for the firm to represent 20-plus gifting table defendants, because some could have competing interests as the case moved forward. The firm returned $2,700.
Platt, too, instructed the Marcuses that their firm no longer represented her, and asked for the return of her files. By this point, Einhorn was representing Platt.
Then, last fall, other gifting tables clients of the Marcus Law Firm entered into a settlement with the Attorney General's Office. Last October, George Jepsen and Consumer Protection Commissioner William M. Rubenstein announced that five gifting table participants will forfeit a total of $202,500 through civil voluntary compliance agreements.
By this point, the matter had reached a third level federal criminal prosecution.
A federal grand jury issued indictments for wire fraud and tax evasion last May against Bello, Platt and a third woman, Bettejane Hopkins of Essex, who entered a guilty plea to a criminal tax charge in December. She faces sentencing on March 22 before Thompson, who could impose up to five years potential jail time.
Connecticut's criminal defense lawyers are representing a large number of witnesses and people on the periphery of the investigation. One attorney, who would comment only on a not-for-attribution basis, said he considered the case small potatoes. "There's no blood, no sex, nobody injured and this is the same [U.S. Attorney's Office] that was going to go after major financial crimes and hedge fund abuses. Instead they go after some tea party in Madison."
Lawyers at all levels in the case are trying to decide what to make of this. One is the husband of Charlotte Meyer, of Old Lyme, a woman who took the stand Feb. 8 as a witness for the government. Meyer acknowledged that she had received $40,000 from one table and $30,000 from a second one. She spent the money on things like "my granddaughter's orthodontia" and household repairs. Under questioning, she said her husband is a lawyer and an accountant.