Com v. Stewart-Johnson

Commonwealth v. Marguerita Stewart-Johnson

Massachusetts Appeals Court
January 12, 2011

Docket No. 09-P-1820.

Lottery, Practice, Criminal.

The defendants were participants in and proponents of a pyramid scheme. They were convicted in Superior Court for violating G. L. c. 271, § 7 (setting up or promoting a lottery). The defendants argue on appeal that they should have been found not guilty for two reasons: 1.) their pyramid scheme was not actually a “lottery” under the statute, and 2.) they were not actually promoting the scheme. They also claimed that there was error in the jury instructions. The convictions were affirmed.

Facts

In 2006, members of the Cape Verdean community in the Dorchester section of Boston began a pyramid scheme, which they referred to as the “table game” because of the rules involved. With 15 players at each “table,” there were eight players in the “appetizer” course, four at “soup and salad,” two at “entrée,” and one at “dessert”. New members started at the first course and worked their way up to dessert. The entrance fee was between $1,000 and $5,000 and that money went to the player who was enjoying “dessert”. When the new players joined, the dessert player would retire and the remaining players would split into two new tables, each of them progressing to the next course. The “soup and salad” members were responsible for recruiting the “appetizer” members. If one were to progress all the way to the end, the person who finished all of the courses would leave with eight times what he or she had paid to enter at the beginning. The defendants each played the “table game” and recruited others to play as well. These solicitations were in the forms of personal conversations, e-mail, and conference calls.

Issue 1: Was the “table game” actually a lottery under the statute?

The defendants claim that the pyramid scheme does not qualify as a lottery under G. L. c. 271, § 7. The Supreme Judicial Court has held that a lottery can encompass a variety of activities that include three elements: “1.) the payment of a price for 2.) the possibility of winning a prize, depending upon 3.) hazard or chance.” Commonwealth v. Lake, 317 Mass. 264, 267 (1944). Even though the first two elements were met, the defendants argue that because players were told to recruit others to join, the game could not technically be considered a game of chance because it relied upon the players’ skill. They pointed to Commonwealth v. Lake, which said that “a game is… considered a lottery if the element of chance predominates and not a lottery if the element of skill predominates. This was rejected by the Court, who followed the reasoning of the US Supreme Court: because fundamentally a pyramid scheme is a game of chance, as there is a possibility of the recruitment pool running dry and the chance of success rests on outside forces, beyond the player’s skill. Even though this pushes the envelope on the definition of “lottery,” the Legislature intended it to include pyramid schemes. Courts should look to related statutes for interpretive guidance. Boswell v. Zephyr Lines, Inc., 414 Mass. 241, 247 (1993).

Issue 2: Were the jury instructions in regard to the word “lottery” in error?

The defendants claim that the judge provided inadequate instructions to the jury regarding the definition of the word “lottery”. The Supreme Judicial Court held in Commonwealth v. Lake that the question of whether a game was one of chance or of skill should be left to the jury to decide. The defendants said that this should have been the question presented; instead, the judge instead instructed the jury that a lottery had to include “some element of chance or luck” and declined to mention skill. However, the defendants said they were “content” with the instructions and did not preserve their challenge for appeal. As such, even though the instruction was deemed to be erroneous, this was not a substantial risk of miscarriage of justice and was not a material error.

Issue 3: Were the defendants actually promoting the pyramid scheme?

The Court determined that there was overwhelming evidence that the defendants promoted the pyramid scheme and recruited others to participate. Even so, the defendants claimed that this was insufficient to prove that they promoted the scheme. They said that they were participants who were following rules established by others. However, since “promote” can also mean “to sell a particular cause,” the defendants have no compelling argument that the Legislature intended for an alternative definition.

Judgments affirmed.

–Prepared by JWK.