HARTFORD, Conn. (AP) — A lawyer nominated for a state judgeship by Gov. Dannel P. Malloy has testified that she never told members of an alleged pyramid scheme that their so-called gifting tables club was legal while her law firm represented them.
Shelley Marcus took the witness stand Monday in federal court in Hartford in the trial of two Guilford women charged with running the scheme and defrauding participants and the IRS. Her testimony contradicted statements by other witnesses who said she and her father, former state Democratic Party Chairman Ed Marcus, told gifting table members that their activities were legal.
Malloy said recently that he will be reviewing Shelley Marcus’ testimony to see if her nomination to the Superior Court bench should stand.
Guilford residents Donna Bello and Jill Platt were charged last year with conspiracy and tax and wire fraud crimes and are now on trial in connection with the alleged pyramid scheme from 2008 to 2011 that attracted numerous other women with promises of big returns on initial investments. A third woman pleaded guilty and awaits sentencing.
Federal prosecutors say new participants paid $5,000 to the person occupying the ‘‘dessert’’ position at the top of a gifting table pyramid. Participants moved through the pyramid from the bottom row, called ‘‘appetizers,’’ to the top row by recruiting additional women to join. Authorities say the $5,000 payments were fraudulently characterized as gifts.
People in the ‘‘dessert’’ position left the pyramid and kept $40,000 when eight new participants joined the bottom row of the gifting tables.
In 2009, Platt discovered that the state attorney general’s office had launched a civil investigation of the gifting tables and met with the Marcus Law Firm for legal advice. Shelley Marcus ended up representing 21 gifting table clients who paid the North Branford-based Marcus Law Firm more than $50,000.
After Platt told her that the tables were for charities, Shelley Marcus testified that she thought it was a pyramid scheme. She said Platt replied that she had been told by several lawyers that it wasn’t a pyramid and that there were attorneys involved in the tables.
Shelley Marcus testified that she never told the gifting table members whether the club was legal or illegal and never gave input on whether the gifts were taxable. She said she warned the women that state gambling laws and securities laws might apply.