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December 1, 2009

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Second man arrested in pyramid scheme

Wednesday, April 14, 1999 | 11:34 a.m.

CARSON CITY -- A second man has been arrested on charges of bilking people out of more than $1.2 million in a pyramid scheme known as "The Winning Edge" in Las Vegas.

Attorney General Frankie Sue Del Papa said Tuesday that David Sergi was picked up in Honolulu on Friday. Douglas Savage was arrested in Las Vegas last week when the business was raided by state and federal agents. Brian Michaels, the other owner, is believed to be in Florida.

The three are charged with securities fraud, selling unregistered securities, not being licensed as a salesmen of securities and failing to register as telephone solicitors.

Del Papa said the results of the search "indicate this operation was shut down at a very opportune time. Employees indicated the company was beginning a new phase of operation that would have meant an even larger number of victims."

Her office has been flooded with calls since the company was sealed. "Numerous callers have indicated they lost tens of thousands of dollars which, for many, represent their life savings."

The company, which billed itself as a multilevel marketing firm, solicited memberships in which people were asked to invest $400 for each membership share they desired to purchase. In turn they were promised a $2,000 profit in less than five months.

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