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1
00:00:04,238 --> 00:00:07,172
This is the city, Los
Angeles, California.
2
00:00:07,241 --> 00:00:08,440
It's a big city,
3
00:00:08,509 --> 00:00:11,076
and a lot of money
can be made here.
4
00:00:11,145 --> 00:00:12,856
The great majority
spend their time
5
00:00:12,880 --> 00:00:16,581
working hard to support
themselves and their families.
6
00:00:16,650 --> 00:00:18,917
There's a small minority
who spend their time
7
00:00:18,986 --> 00:00:20,964
thinking up ways to
separate these people
8
00:00:20,988 --> 00:00:23,122
from their hard-earned pay.
9
00:00:23,190 --> 00:00:25,524
It's my job to try and stop 'em.
10
00:00:25,592 --> 00:00:28,660
I carry a badge.
11
00:00:28,729 --> 00:00:30,095
It was Monday, March 13th.
12
00:00:30,164 --> 00:00:31,096
It was cool in Los Angeles.
13
00:00:31,165 --> 00:00:32,275
We were working the day watch
14
00:00:32,299 --> 00:00:34,211
out of Frauds Division,
Bunko Section.
15
00:00:34,235 --> 00:00:36,235
The boss is Captain Lambert.
16
00:00:36,303 --> 00:00:38,337
My partner's Bill Gannon.
17
00:00:38,406 --> 00:00:40,205
My name's Friday.
18
00:00:40,274 --> 00:00:43,308
We began the day with our
usual Monday morning routine:
19
00:00:43,377 --> 00:00:45,655
reading and checking the
Business Opportunities Section
20
00:00:45,679 --> 00:00:47,212
of the daily newspapers.
21
00:00:47,281 --> 00:00:49,159
On occasion, an ad in the paper
22
00:00:49,183 --> 00:00:53,519
has led to a successful bunko
investigation and prosecution.
23
00:01:02,329 --> 00:01:05,097
The story you are
about to see is true.
24
00:01:05,166 --> 00:01:09,234
The names have been
changed to protect the innocent.
25
00:01:29,089 --> 00:01:32,224
You two see this
in Sunday's paper?
26
00:01:32,293 --> 00:01:34,692
"Wanted, Sales Personnel,
$800 a month guaranteed.
27
00:01:34,761 --> 00:01:37,762
"Experience unnecessary.
Fabulous discount service.
28
00:01:37,831 --> 00:01:40,198
"Double earnings in a month.
Double them again in two.
29
00:01:40,267 --> 00:01:42,734
"Unlimited potential.
Earn over $100,000.
30
00:01:42,803 --> 00:01:45,804
"Proof available. Win
new Cads and T-Birds.
31
00:01:45,872 --> 00:01:49,641
Phone Mrs. Horton,
Bonnie Bates, 93373."
32
00:01:49,709 --> 00:01:51,376
That's the old pyramid deal.
33
00:01:51,445 --> 00:01:52,677
Sound familiar?
34
00:01:52,746 --> 00:01:54,190
Horton Bates, didn't
he work this same scam
35
00:01:54,214 --> 00:01:55,613
three, four years ago?
36
00:01:55,682 --> 00:01:57,627
That's right. Looks like his
wife inherited the scheme.
37
00:01:57,651 --> 00:01:59,796
Bates died of a coronary,
didn't he, about a year back?
38
00:01:59,820 --> 00:02:01,219
Yeah, as a free man.
39
00:02:01,288 --> 00:02:04,022
We never could come up with
anything more than 17500 B & P.
40
00:02:04,091 --> 00:02:05,668
Slowed him down,
but it didn't stop him.
41
00:02:05,692 --> 00:02:08,160
Yeah, that's about all a false
advertising charge ever does.
42
00:02:08,228 --> 00:02:10,662
He was working something
he called Creative Marketeers,
43
00:02:10,730 --> 00:02:13,999
organized it in '63,
sold out for $140,000.
44
00:02:14,068 --> 00:02:16,234
Like the ad says,
"Earn over $100,000."
45
00:02:16,303 --> 00:02:17,314
That's one of the reasons
46
00:02:17,338 --> 00:02:18,881
we couldn't lean
on him last time.
47
00:02:18,905 --> 00:02:21,318
His lawyer used that as proof
that the ad didn't misrepresent.
48
00:02:21,342 --> 00:02:22,975
Got another idea this time.
49
00:02:23,043 --> 00:02:23,908
What's that, Skipper?
50
00:02:23,978 --> 00:02:25,810
322PC... operating a lottery,
51
00:02:25,879 --> 00:02:27,357
more effective than
Business and Pro.
52
00:02:27,381 --> 00:02:29,326
They applied it to a bunk
case up in Washington,
53
00:02:29,350 --> 00:02:31,027
got a conviction,
and it was upheld.
54
00:02:31,051 --> 00:02:32,829
Prove there's an
element of chance, huh?
55
00:02:32,853 --> 00:02:34,297
Might work. I'd
like to establish
56
00:02:34,321 --> 00:02:35,988
that precedent here in L.A.
57
00:02:36,056 --> 00:02:37,467
These pyramid deals are vicious.
58
00:02:37,491 --> 00:02:38,935
The victims are
generally old people
59
00:02:38,959 --> 00:02:40,192
who put up their last dime,
60
00:02:40,260 --> 00:02:42,105
or young ones who
borrow to invest,
61
00:02:42,129 --> 00:02:43,506
thinking they're
going to get rich quick,
62
00:02:43,530 --> 00:02:45,508
like a chain letter. One
person writes to two,
63
00:02:45,532 --> 00:02:47,110
two write to four,
four write to eight.
64
00:02:47,134 --> 00:02:49,145
Before you know it, you've
got 1,000 people on the hook.
65
00:02:49,169 --> 00:02:51,114
And only the ones in
early ever collect a penny,
66
00:02:51,138 --> 00:02:52,178
and not much at that.
67
00:02:52,206 --> 00:02:53,372
Get on it right away.
68
00:02:53,440 --> 00:02:54,684
I want you to work
full time, starting now.
69
00:02:54,708 --> 00:02:56,074
Yes, sir.
70
00:02:56,143 --> 00:02:57,420
Let's see if we can't knock
a building block or two
71
00:02:57,444 --> 00:03:00,512
out of Bonnie Bates' pyramid.
72
00:03:06,786 --> 00:03:09,265
Bill telephoned the
number given in the ad.
73
00:03:09,289 --> 00:03:10,900
Bonnie Bates'
assistant answered.
74
00:03:10,924 --> 00:03:13,825
It was a short conversation
but a fruitful one.
75
00:03:13,894 --> 00:03:15,505
Naturally, they wouldn't give
me anything over the phone.
76
00:03:15,529 --> 00:03:17,273
Said if I'd come to a
meeting tomorrow night,
77
00:03:17,297 --> 00:03:19,476
I'd meet the great lady
and walk out a rich man.
78
00:03:19,500 --> 00:03:20,565
Who'd you talk to?
79
00:03:20,634 --> 00:03:21,744
Says he's Bonnie
Bates' assistant,
80
00:03:21,768 --> 00:03:23,035
gave the name Everett Tottle.
81
00:03:23,103 --> 00:03:24,143
Where's the meeting?
82
00:03:24,204 --> 00:03:25,515
Brookfield Hotel,
Corinthian Room.
83
00:03:25,539 --> 00:03:27,183
That's out of the
high-rent district.
84
00:03:27,207 --> 00:03:29,386
This Tottle guy said to bring
three things to the meeting.
85
00:03:29,410 --> 00:03:30,542
Yeah, what's that?
86
00:03:30,610 --> 00:03:32,644
Love, faith, and
an interested friend.
87
00:03:32,712 --> 00:03:34,224
Well, now, I don't know
about those first two,
88
00:03:34,248 --> 00:03:38,517
but that last item you've got.
89
00:03:38,585 --> 00:03:41,019
Tuesday, March 14th, 7:30 p.m.
90
00:03:41,088 --> 00:03:43,333
We left the office and
drove over to West 5th Street
91
00:03:43,357 --> 00:03:46,291
to the Brookfield Hotel.
92
00:03:46,360 --> 00:03:48,660
8:10 p.m. The meeting
was underway by the time
93
00:03:48,728 --> 00:03:51,663
we reached the Corinthian
Room of the Brookfield Hotel.
94
00:03:51,731 --> 00:03:53,643
Everett Tottle introduced
himself as the man
95
00:03:53,667 --> 00:03:55,412
who had spoken to
Bill on the telephone,
96
00:03:55,436 --> 00:03:57,902
and he welcomed us
with whispered enthusiasm.
97
00:03:57,971 --> 00:03:59,549
The meeting just got underway.
98
00:03:59,573 --> 00:04:00,950
- You haven't missed a thing.
- Oh, that's good.
99
00:04:00,974 --> 00:04:02,419
Copies of the Dollar Wise Pledge
100
00:04:02,443 --> 00:04:03,641
and the Dollar Wise Song,
101
00:04:03,710 --> 00:04:05,455
if you want to join in at
the end of the program.
102
00:04:05,479 --> 00:04:06,822
- Sure will.
- Thank you.
103
00:04:06,846 --> 00:04:08,380
♪♪
104
00:04:08,449 --> 00:04:11,849
Look up here,
friends! Look up here!
105
00:04:11,918 --> 00:04:16,020
Look up here and see
who's smiling down on us!
106
00:04:16,090 --> 00:04:18,056
♪♪
107
00:04:18,125 --> 00:04:22,561
Horton Bates, my
dear departed husband.
108
00:04:22,629 --> 00:04:26,531
God rest his soul. God
rest your soul, Horton.
109
00:04:26,600 --> 00:04:29,167
Smile down on us, Horton, dear.
110
00:04:29,236 --> 00:04:32,870
We're doing all
kinds of good tonight.
111
00:04:32,939 --> 00:04:35,107
He spent his last years
112
00:04:35,175 --> 00:04:38,376
proving the things
I say are true.
113
00:04:38,445 --> 00:04:44,015
I hold here in my hands a
copy of the $140,000 check...
114
00:04:44,084 --> 00:04:47,285
he got in 1964.
115
00:04:48,922 --> 00:04:52,824
Good and faithful friend,
Brother Everett Tottle,
116
00:04:52,892 --> 00:04:56,961
you tell the folks about Horton.
117
00:04:57,030 --> 00:04:59,030
All I can tell you, folks,
118
00:04:59,099 --> 00:05:02,334
is that I knew Horton
Bates since I was a boy.
119
00:05:02,402 --> 00:05:05,803
We grew up making
our money the hard way!
120
00:05:05,872 --> 00:05:07,683
Oh, I thought he was a dreamer
121
00:05:07,707 --> 00:05:10,808
until he showed
me that check of his!
122
00:05:10,877 --> 00:05:15,647
Now I know he was a
mathematical genius, folks!
123
00:05:15,715 --> 00:05:17,815
You tell 'em, brother!
124
00:05:17,884 --> 00:05:20,452
But they're not folks
anymore, Brother Everett.
125
00:05:20,521 --> 00:05:22,654
They're brothers and sisters,
126
00:05:22,722 --> 00:05:25,023
because we're
all in this together!
127
00:05:26,326 --> 00:05:28,293
After I show you
how to save money,
128
00:05:28,362 --> 00:05:30,322
I'm going to show
you how to make it.
129
00:05:30,364 --> 00:05:34,299
How many of you pay retail
prices for the things you buy?
130
00:05:34,368 --> 00:05:36,034
Did you ever buy a thing,
131
00:05:36,102 --> 00:05:38,014
then right after
find it up for sale
132
00:05:38,038 --> 00:05:39,849
at almost half the
price you had to pay?
133
00:05:39,873 --> 00:05:41,373
Yes!
134
00:05:41,441 --> 00:05:43,275
Did it make you angry?
135
00:05:43,343 --> 00:05:44,776
Yes!
136
00:05:44,844 --> 00:05:46,645
Did it make you mad?
137
00:05:46,713 --> 00:05:47,945
Yes!
138
00:05:48,014 --> 00:05:49,925
Did you feel that
you were taken?
139
00:05:49,949 --> 00:05:51,082
Yes!
140
00:05:51,151 --> 00:05:53,652
Would you like to
have it stopped?
141
00:05:53,720 --> 00:05:55,053
Yes!
142
00:05:55,121 --> 00:05:57,822
Well, that's what
we're here to teach you,
143
00:05:57,891 --> 00:06:00,124
teach you how to make it stop!
144
00:06:00,194 --> 00:06:05,263
S-T-O-P!
145
00:06:05,332 --> 00:06:06,798
Yeah!
146
00:06:10,103 --> 00:06:12,770
Take this vacuum
cleaner. Oh, you take it.
147
00:06:12,839 --> 00:06:14,679
I don't want it at that price.
148
00:06:14,741 --> 00:06:16,208
Fair trade, they say.
149
00:06:16,276 --> 00:06:20,011
Can't get it anywhere
for less than 67.50!
150
00:06:20,080 --> 00:06:24,349
$41 through our
Dollar Wise Catalog!
151
00:06:24,418 --> 00:06:28,220
A 26.50 savings!
Top brand mixer!
152
00:06:28,288 --> 00:06:30,422
Do I have to tell
you what it cost?
153
00:06:30,490 --> 00:06:32,357
37.90.
154
00:06:32,426 --> 00:06:37,495
The Dollar Wise price
$22, signed, sealed,
155
00:06:37,564 --> 00:06:41,299
guaranteed and
delivered right to your door.
156
00:06:41,368 --> 00:06:43,901
15.90 savings to our members.
157
00:06:43,970 --> 00:06:45,403
Is that a buy?
158
00:06:45,472 --> 00:06:46,804
Yes!
159
00:06:46,873 --> 00:06:49,341
You bet it is!
160
00:06:49,409 --> 00:06:51,254
Everything you'll want,
brothers and sisters,
161
00:06:51,278 --> 00:06:55,447
at only 10% above the
wholesale manufacturer's price.
162
00:06:55,515 --> 00:07:00,252
You tell me, dear hearts,
is that buying power?
163
00:07:00,320 --> 00:07:01,620
Yes!
164
00:07:01,688 --> 00:07:04,122
I ought to hear it again!
Is that buying power?
165
00:07:04,190 --> 00:07:05,724
Yes!
166
00:07:05,792 --> 00:07:07,103
Well, I'm here to tell you
167
00:07:07,127 --> 00:07:10,828
that buying power
is all well and good,
168
00:07:10,897 --> 00:07:13,798
but what about making power?
169
00:07:13,867 --> 00:07:18,002
If you ain't got, you can't get!
170
00:07:26,045 --> 00:07:31,416
Now, anybody here want
to make $300 a month
171
00:07:31,485 --> 00:07:33,752
working two spare nights a week?
172
00:07:33,820 --> 00:07:35,553
I do!
173
00:07:35,622 --> 00:07:39,291
Who wants to make
600 for four spare nights?
174
00:07:39,359 --> 00:07:41,326
I do!
175
00:07:41,395 --> 00:07:43,662
Well, pay attention.
176
00:07:43,730 --> 00:07:48,032
I'm going to show you how.
177
00:07:48,101 --> 00:07:51,569
You see this tiny figure?
178
00:07:51,638 --> 00:07:55,573
199.99.
179
00:07:55,642 --> 00:08:00,445
That's your cost of
membership for ten whole years.
180
00:08:00,514 --> 00:08:04,182
You give me this figure,
I'll make you prospectors
181
00:08:04,250 --> 00:08:07,852
in the Dollar Wise
Market Service.
182
00:08:07,921 --> 00:08:10,065
Besides the great
savings I've told you about,
183
00:08:10,089 --> 00:08:12,056
I'm going to give
you more money,
184
00:08:12,125 --> 00:08:15,159
and each new brother
or sister you bring in,
185
00:08:15,228 --> 00:08:20,699
I'll give you $30 cash money.
186
00:08:22,369 --> 00:08:25,069
If each of those people
become prospectors
187
00:08:25,138 --> 00:08:27,539
and bring in new members,
188
00:08:27,607 --> 00:08:32,977
I'll give you $4.00 cash money
189
00:08:33,046 --> 00:08:36,848
for each new
member they bring in.
190
00:08:36,916 --> 00:08:41,886
Let me show you, friends,
how easy this really is.
191
00:08:41,955 --> 00:08:45,223
Four prospectors a week
from among your friends,
192
00:08:45,291 --> 00:08:53,130
relatives, and
neighbors will put $544
193
00:08:53,199 --> 00:08:59,003
into your very own
pocket every month.
194
00:08:59,072 --> 00:09:07,072
Have you ever, in your lives,
heard of so much free money?
195
00:09:07,848 --> 00:09:12,083
Free money, free money,
free money, free money!
196
00:09:12,151 --> 00:09:13,284
Everybody!
197
00:09:13,353 --> 00:09:17,355
Free money, free money,
free money, free money,
198
00:09:17,424 --> 00:09:21,993
free money, free money
free money, free money!
199
00:09:27,500 --> 00:09:28,800
9:30 p.m.
200
00:09:28,869 --> 00:09:30,446
One thing you could
say about Bonnie Bates...
201
00:09:30,470 --> 00:09:32,637
She was a great salesman.
202
00:09:32,705 --> 00:09:34,005
Isn't that something?
203
00:09:34,074 --> 00:09:37,242
No prospector can pan any
gold without one of these.
204
00:09:37,310 --> 00:09:40,478
Sales promotion kit, 19.95.
205
00:09:40,546 --> 00:09:44,249
That one hour reel of
tape's worth the price.
206
00:09:44,317 --> 00:09:50,288
The Bonnie Bates sales
pitch recorded for posterity.
207
00:09:50,356 --> 00:09:54,725
10:10 p.m. Bonnie Bates really
had them rocking and rolling.
208
00:09:54,795 --> 00:09:57,561
Brother Black, stand
up, and let's talk well.
209
00:09:57,630 --> 00:09:58,863
When did we first meet?
210
00:09:58,932 --> 00:10:00,398
Last month, Sister Bonnie.
211
00:10:00,466 --> 00:10:02,111
Brother Black is a pharmacist.
212
00:10:02,135 --> 00:10:03,512
Drug store right
around the corner.
213
00:10:03,536 --> 00:10:06,437
How much did you make
your first week as a prospector?
214
00:10:06,506 --> 00:10:08,306
$260.
215
00:10:08,374 --> 00:10:09,551
What about the second week?
216
00:10:09,575 --> 00:10:12,177
700. Oh, no, no, I lost one.
217
00:10:12,245 --> 00:10:13,444
Make that 660.
218
00:10:13,513 --> 00:10:16,981
Oh, you lost one, Brother Black!
219
00:10:17,050 --> 00:10:21,719
Oh, I am sorry
about that! I am sorry!
220
00:10:24,490 --> 00:10:25,723
Tell us about the third week.
221
00:10:25,792 --> 00:10:27,258
840.
222
00:10:27,327 --> 00:10:33,497
That's $1,760 for
the month so far!
223
00:10:33,566 --> 00:10:36,334
Thank you, Brother Black.
224
00:10:36,402 --> 00:10:40,305
And that's not counting
overrides or merchandise,
225
00:10:40,373 --> 00:10:42,673
and the new
members, his members,
226
00:10:42,742 --> 00:10:47,245
and his members' members
are going to bring him.
227
00:10:47,314 --> 00:10:50,114
By the time his final
tally for the month is in,
228
00:10:50,183 --> 00:10:56,654
he will have made $10,000
from our growing pool of dollars!
229
00:11:00,560 --> 00:11:01,826
10:42 p.m.
230
00:11:01,895 --> 00:11:03,361
After eliciting testimonials
231
00:11:03,429 --> 00:11:05,208
from a number of
successful members,
232
00:11:05,232 --> 00:11:06,742
Bonnie Bates made
a big production
233
00:11:06,766 --> 00:11:08,799
out of paying off
the old members.
234
00:11:08,869 --> 00:11:10,813
The new members
crowded around to sign up.
235
00:11:10,837 --> 00:11:12,849
They couldn't wait to
give her their money.
236
00:11:12,873 --> 00:11:14,805
Isn't Sister Bonnie wonderful?
237
00:11:14,875 --> 00:11:16,719
Yes, ma'am. This
is my third meeting.
238
00:11:16,743 --> 00:11:18,583
I just can't make up my mind.
239
00:11:18,644 --> 00:11:19,844
How's that, ma'am?
240
00:11:19,913 --> 00:11:23,281
199 doesn't seem like
much to some people,
241
00:11:23,350 --> 00:11:26,684
but my land, it's almost $200.
242
00:11:26,753 --> 00:11:27,852
Yes, ma'am.
243
00:11:27,921 --> 00:11:32,023
Well, no sense being
an old scaredy cat.
244
00:11:32,092 --> 00:11:32,957
Ma'am.
245
00:11:33,026 --> 00:11:34,026
Hm?
246
00:11:34,060 --> 00:11:34,993
Can you keep a secret?
247
00:11:35,061 --> 00:11:36,895
Why, yes, I think so.
248
00:11:36,963 --> 00:11:38,140
Well, now, I understand
they're running
249
00:11:38,164 --> 00:11:40,398
a half price special
a week from tonight,
250
00:11:40,466 --> 00:11:42,144
part of the new
membership drive.
251
00:11:42,168 --> 00:11:44,135
Half price?
252
00:11:44,204 --> 00:11:46,737
Well, that means
I'll save almost $100.
253
00:11:46,806 --> 00:11:48,106
That's right.
254
00:11:48,174 --> 00:11:50,052
Now, please, don't
spread that around, will ya?
255
00:11:50,076 --> 00:11:52,176
Cross my heart.
256
00:11:52,245 --> 00:11:54,779
Bless you, brother.
257
00:12:05,292 --> 00:12:07,792
Wednesday, March
15th, 10:40 a.m.
258
00:12:07,860 --> 00:12:09,906
We listened to Bonnie
Bates' sales tape.
259
00:12:09,930 --> 00:12:11,807
We were fairly certain
we could get a conviction
260
00:12:11,831 --> 00:12:13,711
on a false advertising charge.
261
00:12:13,766 --> 00:12:15,466
We brought in Nick Gowers,
262
00:12:15,535 --> 00:12:16,946
one of the
department's statisticians
263
00:12:16,970 --> 00:12:18,080
from Information Services
264
00:12:18,104 --> 00:12:19,715
to help with the lottery angle.
265
00:12:19,739 --> 00:12:23,341
He said he'd go to
work on it right away.
266
00:12:23,410 --> 00:12:25,243
12:45 p.m.
267
00:12:25,312 --> 00:12:26,488
Just talked to
the City Attorney.
268
00:12:26,512 --> 00:12:27,445
Yes, sir?
269
00:12:27,513 --> 00:12:29,780
Bust her.
270
00:12:33,719 --> 00:12:36,821
1:10 p.m., Bill and I
arrived at Corinthian Hall
271
00:12:36,889 --> 00:12:38,935
with a warrant for
Bonnie Bates' arrest.
272
00:12:38,959 --> 00:12:40,891
Thank you very much.
273
00:12:40,961 --> 00:12:43,094
This is exactly what
I was looking for.
274
00:12:43,163 --> 00:12:44,773
You know, I'm a
salesman by trade,
275
00:12:44,797 --> 00:12:46,042
and I think I can do pretty good
276
00:12:46,066 --> 00:12:47,898
bringing in new prospectors.
277
00:12:47,968 --> 00:12:49,834
Indeed, you should, brother.
278
00:12:49,902 --> 00:12:52,903
And as I told you, you
can become a manager
279
00:12:52,973 --> 00:12:55,440
with the profits you'll be
making as a prospector.
280
00:12:55,508 --> 00:12:56,986
I don't know how to thank you.
281
00:12:57,010 --> 00:12:59,577
Try calling this number
in about an hour, fella.
282
00:12:59,645 --> 00:13:00,911
I don't understand.
283
00:13:00,981 --> 00:13:02,613
Police officers, Mrs. Bates.
284
00:13:02,682 --> 00:13:04,293
We have a warrant
here for your arrest,
285
00:13:04,317 --> 00:13:07,352
charging 17500 B & P
Code, false advertising
286
00:13:07,420 --> 00:13:10,321
and Section 322PC,
operating a lottery.
287
00:13:10,390 --> 00:13:11,489
Now, now, gentlemen!
288
00:13:11,557 --> 00:13:13,135
Better just stand quiet, Mister.
289
00:13:13,159 --> 00:13:14,993
What's all that mishmash,
290
00:13:15,061 --> 00:13:17,661
all those fancy numbers
you're throwing around there?
291
00:13:17,730 --> 00:13:20,531
- Funny thing, Mrs. Bates.
- What's that?
292
00:13:20,600 --> 00:13:23,968
The jury's gonna want to
know the same thing about you.
293
00:13:37,484 --> 00:13:40,084
Monday, May 15th, 9:30 a.m.
294
00:13:40,152 --> 00:13:42,687
Trial was held in Division 69
295
00:13:42,755 --> 00:13:44,635
of Los Angeles Municipal Court.
296
00:13:44,691 --> 00:13:46,435
Deputy City Attorney Hal Davies
297
00:13:46,459 --> 00:13:47,859
handled the prosecution.
298
00:13:47,927 --> 00:13:50,661
Bonnie Bates was
represented by Palmer Forrest.
299
00:13:50,730 --> 00:13:52,040
And that's when Sergeant Friday
300
00:13:52,064 --> 00:13:53,943
and Officer Gannon
appeared at the hotel
301
00:13:53,967 --> 00:13:55,344
and placed Mrs.
Bates under arrest.
302
00:13:55,368 --> 00:13:57,768
- Is that right?
- Yes, sir, that's correct.
303
00:13:57,837 --> 00:13:58,837
Your witness.
304
00:13:58,905 --> 00:14:01,238
No questions.
305
00:14:08,515 --> 00:14:11,682
9:38 a.m. Bill was
called as the next witness.
306
00:14:11,751 --> 00:14:13,395
Davies began
laying the groundwork
307
00:14:13,419 --> 00:14:15,030
for the false advertising count.
308
00:14:15,054 --> 00:14:16,298
Do you, of your own knowledge,
309
00:14:16,322 --> 00:14:18,333
know of anyone who
got a salesman's job
310
00:14:18,357 --> 00:14:19,902
without paying a
fee to Mrs. Bates?
311
00:14:19,926 --> 00:14:21,058
No, sir.
312
00:14:21,127 --> 00:14:22,571
You ever hear of anyone
obtaining such a job?
313
00:14:22,595 --> 00:14:23,595
Objection.
314
00:14:23,630 --> 00:14:24,795
Sustained.
315
00:14:24,864 --> 00:14:26,809
Well, to the best of your
knowledge and belief,
316
00:14:26,833 --> 00:14:27,910
did anyone get a salesman's job
317
00:14:27,934 --> 00:14:29,177
without paying the defendant?
318
00:14:29,201 --> 00:14:30,401
No, sir, they did not.
319
00:14:30,469 --> 00:14:32,202
Thank you. Your witness.
320
00:14:32,271 --> 00:14:34,104
No questions.
321
00:14:36,475 --> 00:14:37,675
He's sharp.
322
00:14:37,744 --> 00:14:39,454
He doesn't want
to prejudice the jury.
323
00:14:39,478 --> 00:14:41,657
He knows he can't beat
the false advertising rap,
324
00:14:41,681 --> 00:14:45,115
so he's saving his
edge for the lottery count.
325
00:14:50,657 --> 00:14:53,257
10:12 a.m. Bonnie
Bates' taped sales pitch,
326
00:14:53,325 --> 00:14:55,604
which she had recorded
live at one of her meetings,
327
00:14:55,628 --> 00:14:57,205
gave an accurate
picture of the meeting
328
00:14:57,229 --> 00:14:58,563
which we had attended.
329
00:14:58,631 --> 00:15:02,567
The court listened
to the full hour.
330
00:15:02,635 --> 00:15:04,869
If it please the court, I
waive cross examination
331
00:15:04,938 --> 00:15:08,305
of this particular, uh, witness.
332
00:15:14,213 --> 00:15:16,747
11:16 a.m. I was sworn in next.
333
00:15:16,816 --> 00:15:19,183
Davies concentrated
on the lottery angle.
334
00:15:19,251 --> 00:15:21,363
And so it's called a
pyramid because of the way
335
00:15:21,387 --> 00:15:22,965
the membership
spreads down and out?
336
00:15:22,989 --> 00:15:24,321
Yes, sir.
337
00:15:24,390 --> 00:15:26,501
Well, how rapidly does the
membership multiply, Sergeant?
338
00:15:26,525 --> 00:15:27,892
Quite rapidly.
339
00:15:27,961 --> 00:15:29,838
You might call it a
geometrical progression.
340
00:15:29,862 --> 00:15:31,173
Does anyone make
money out of it?
341
00:15:31,197 --> 00:15:33,317
Only those who get in
at the very beginning.
342
00:15:33,365 --> 00:15:34,365
Like Mrs. Bates?
343
00:15:34,433 --> 00:15:35,900
Objection.
344
00:15:35,969 --> 00:15:37,167
Overruled.
345
00:15:37,236 --> 00:15:38,280
If it please Your Honor,
346
00:15:38,304 --> 00:15:39,949
the prosecutor is
leading the witness.
347
00:15:39,973 --> 00:15:41,083
It's been established
that Mrs. Bates
348
00:15:41,107 --> 00:15:44,075
started the Dollar
Wise Marketing Service.
349
00:15:44,143 --> 00:15:46,055
You may answer the
question, Sergeant Friday.
350
00:15:46,079 --> 00:15:47,244
Thank you, Your Honor.
351
00:15:47,313 --> 00:15:49,224
Let me repeat the
question, Sergeant Friday.
352
00:15:49,248 --> 00:15:50,180
Yes, sir.
353
00:15:50,249 --> 00:15:51,393
Would Mrs. Bates
be one of the few
354
00:15:51,417 --> 00:15:53,195
to make money out of
this pyramid scheme?
355
00:15:53,219 --> 00:15:54,763
Yes, sir. That's correct.
356
00:15:54,787 --> 00:15:55,953
Does anyone lose money?
357
00:15:56,022 --> 00:15:57,982
Yes, sir, the
majority who join late
358
00:15:58,024 --> 00:15:59,902
and are at the
bottom of the pyramid.
359
00:15:59,926 --> 00:16:02,459
Well, what determines
who wins and who loses?
360
00:16:02,528 --> 00:16:03,761
Objection.
361
00:16:03,830 --> 00:16:05,641
The term "win" presupposes
the element of chance.
362
00:16:05,665 --> 00:16:07,031
I'll rephrase the question.
363
00:16:07,100 --> 00:16:09,166
What determines who
makes and who loses?
364
00:16:09,235 --> 00:16:11,080
Well, that would
be impossible to tell.
365
00:16:11,104 --> 00:16:12,547
Why is it be impossible to tell?
366
00:16:12,571 --> 00:16:15,039
Because it's just a
matter of pure chance.
367
00:16:15,108 --> 00:16:16,988
That's all. Thank you, Sergeant.
368
00:16:22,481 --> 00:16:24,441
Sergeant Friday,
what's the formula
369
00:16:24,483 --> 00:16:26,695
for determining the square of
a number to the ninth power?
370
00:16:26,719 --> 00:16:27,918
I wouldn't know, sir.
371
00:16:27,987 --> 00:16:29,598
How would you chart the
incidence of recurrence
372
00:16:29,622 --> 00:16:32,322
of digit X in a field
of 73 variables?
373
00:16:32,391 --> 00:16:33,568
I couldn't answer that, sir.
374
00:16:33,592 --> 00:16:34,937
So you are not an authority
375
00:16:34,961 --> 00:16:36,739
on the mathematics of
geometrical progressions,
376
00:16:36,763 --> 00:16:39,163
chance, probabilities,
and applied calculus?
377
00:16:39,231 --> 00:16:40,464
No, sir, I'm not.
378
00:16:40,533 --> 00:16:43,233
Oh. You used the term
"geometrical progression."
379
00:16:43,302 --> 00:16:44,412
Isn't that correct,
Sergeant Friday?
380
00:16:44,436 --> 00:16:45,536
Yes, sir.
381
00:16:45,604 --> 00:16:47,482
Well, that's my
mistake, isn't it?
382
00:16:47,506 --> 00:16:48,706
What's that, sir?
383
00:16:48,775 --> 00:16:51,241
Why, I assumed you knew
what you were talking about.
384
00:16:51,310 --> 00:16:54,545
That's all.
385
00:17:06,726 --> 00:17:09,126
Nick Gowers appeared
as a witness in rebuttal.
386
00:17:09,195 --> 00:17:12,396
Using charts prepared by the
police department cartographer,
387
00:17:12,464 --> 00:17:15,299
he showed his simplified
proof of the element of chance
388
00:17:15,367 --> 00:17:17,434
in Bonnie Bates'
pyramid operation.
389
00:17:17,503 --> 00:17:19,937
There was a sudden
change in the jury's attitude.
390
00:17:20,006 --> 00:17:22,206
You're a statistician,
are you not, Mr. Gowers?
391
00:17:22,274 --> 00:17:23,440
Yes.
392
00:17:23,509 --> 00:17:25,353
And your job is to
gather statistical material
393
00:17:25,377 --> 00:17:27,723
for the police department's
Information Services Section.
394
00:17:27,747 --> 00:17:29,224
- Is that right?
- That's right.
395
00:17:29,248 --> 00:17:30,525
Now, correct me, if I'm wrong.
396
00:17:30,549 --> 00:17:32,850
The type of mathematics
in your work is primarily
397
00:17:32,919 --> 00:17:35,097
adding, subtracting,
multiplying, and dividing.
398
00:17:35,121 --> 00:17:35,986
Isn't that so?
399
00:17:36,055 --> 00:17:37,354
Primarily, yes.
400
00:17:37,423 --> 00:17:39,301
The kind of math we
all learn in high school.
401
00:17:39,325 --> 00:17:40,969
- Is that right?
- That's right.
402
00:17:40,993 --> 00:17:42,871
So you are not a
mathematical authority
403
00:17:42,895 --> 00:17:44,840
on chance and the
laws of probability.
404
00:17:44,864 --> 00:17:45,796
Is that correct?
405
00:17:45,865 --> 00:17:47,042
I may not be an authority...
406
00:17:47,066 --> 00:17:49,734
Are you or are you not
an authority on chance
407
00:17:49,802 --> 00:17:51,535
and the laws of probability?
408
00:17:51,604 --> 00:17:54,138
No.
409
00:17:54,207 --> 00:17:56,974
No further questions.
410
00:18:01,680 --> 00:18:04,514
11:43 a.m. The defense placed
411
00:18:04,583 --> 00:18:06,028
its group of character witnesses
412
00:18:06,052 --> 00:18:07,763
on the stand for Bonnie Bates.
413
00:18:07,787 --> 00:18:09,264
They spoke about
the money they made
414
00:18:09,288 --> 00:18:10,833
and the reverent
feelings they had
415
00:18:10,857 --> 00:18:13,257
for the Dollar
Wise organization.
416
00:18:13,325 --> 00:18:14,837
Forrest was still
drawing them out
417
00:18:14,861 --> 00:18:18,462
when court was
recessed for lunch.
418
00:18:18,530 --> 00:18:21,198
2:30 p.m. Bonnie
Bates took the stand.
419
00:18:21,267 --> 00:18:23,234
Under Forrest's
expert direction,
420
00:18:23,302 --> 00:18:26,270
she wasn't selling promises
of profits to prospectors.
421
00:18:26,338 --> 00:18:29,240
She was selling faith to
the jury in Bonnie Bates.
422
00:18:29,308 --> 00:18:33,778
And then they come
and accuse me of lottery.
423
00:18:33,846 --> 00:18:36,613
Well, I'll tell you how
much I know about lottery.
424
00:18:36,682 --> 00:18:40,117
I thought they meant
playing bingo at the church.
425
00:18:40,186 --> 00:18:43,954
I don't take money.
I give money.
426
00:18:44,023 --> 00:18:46,824
And when I give,
other people receive
427
00:18:46,893 --> 00:18:49,193
more than they've ever received.
428
00:18:49,262 --> 00:18:52,096
It's like I've said and
lived by all my life.
429
00:18:52,165 --> 00:18:53,530
Yes, Mrs. Bates?
430
00:18:53,599 --> 00:18:57,668
It is more blessed to
give than to receive.
431
00:19:02,641 --> 00:19:04,074
After an hour on the stand,
432
00:19:04,143 --> 00:19:06,944
Forrest turned Mrs. Bates
over for cross examination.
433
00:19:07,013 --> 00:19:08,412
Hal Davies took over.
434
00:19:08,480 --> 00:19:10,580
Mrs. Bates, I'm going
to ask you again.
435
00:19:10,649 --> 00:19:12,560
Were there any
prospectors or managers
436
00:19:12,584 --> 00:19:13,750
who didn't make a profit?
437
00:19:13,820 --> 00:19:16,620
I always say, if a
member of Dollar Wise
438
00:19:16,689 --> 00:19:18,388
can't make lots of money,
439
00:19:18,457 --> 00:19:21,859
then he sure ain't no
prospector or no manager.
440
00:19:21,928 --> 00:19:23,405
Were there some who lost money?
441
00:19:23,429 --> 00:19:27,164
Mr. Lawyer, some people
can do two things at once.
442
00:19:27,233 --> 00:19:28,565
Well, I'm not one of them.
443
00:19:28,634 --> 00:19:30,935
I have all I can
do to keep track
444
00:19:31,003 --> 00:19:33,581
of all that money
I'm handing out.
445
00:19:33,605 --> 00:19:35,873
Your Honor, this witness
is just not responsive.
446
00:19:35,942 --> 00:19:37,519
I must caution you
again, Mrs. Bates.
447
00:19:37,543 --> 00:19:39,276
Just answer the questions.
448
00:19:39,345 --> 00:19:41,089
Well, I'm trying, Your Honor.
449
00:19:41,113 --> 00:19:42,612
Lord knows I'm trying.
450
00:19:42,681 --> 00:19:43,801
Mrs. Bates, isn't it true
451
00:19:43,850 --> 00:19:45,227
that you and your
deceased husband
452
00:19:45,251 --> 00:19:47,784
were involved in a venture
called Creative Marketeers?
453
00:19:47,854 --> 00:19:49,086
Objection!
454
00:19:49,155 --> 00:19:50,999
- Sustained.
- If Your Honor please,
455
00:19:51,023 --> 00:19:52,835
I intend to establish
a connection.
456
00:19:52,859 --> 00:19:56,493
Mr. Davies, one
case at a time, please.
457
00:19:56,562 --> 00:19:58,682
Now, directing yourself
to Mr. Gowers' chart,
458
00:19:58,731 --> 00:20:00,508
isn't it true that the
levels of membership
459
00:20:00,532 --> 00:20:02,867
could never really go
beyond the first few levels?
460
00:20:02,935 --> 00:20:05,769
Oh, no! No.
461
00:20:05,838 --> 00:20:08,472
With good, honest
work and God's help,
462
00:20:08,540 --> 00:20:12,642
it could go on and
on and on and on!
463
00:20:12,711 --> 00:20:16,180
Right on through the 12th,
13th, 14th, even 15th levels?
464
00:20:16,249 --> 00:20:18,615
Absolutely, Mr. Lawyer.
465
00:20:18,684 --> 00:20:20,229
No more questions, Your Honor.
466
00:20:20,253 --> 00:20:21,496
And now, if it please the court,
467
00:20:21,520 --> 00:20:24,621
the defense would like
to call its expert witness,
468
00:20:24,690 --> 00:20:28,058
Dr. Edgar Peter Sundstrom.
469
00:20:34,833 --> 00:20:36,033
Raise your right hand.
470
00:20:36,102 --> 00:20:37,412
Do you solemnly
swear to tell the truth,
471
00:20:37,436 --> 00:20:38,646
the whole truth, and
nothing but the truth,
472
00:20:38,670 --> 00:20:39,603
so help you God?
473
00:20:39,671 --> 00:20:41,311
- I do.
- Be seated.
474
00:20:41,374 --> 00:20:43,318
Would you please state
your full name, Doctor?
475
00:20:43,342 --> 00:20:45,175
Edgar Peter Sundstrom.
476
00:20:45,244 --> 00:20:46,543
And, Dr. Sundstrom,
477
00:20:46,612 --> 00:20:48,656
you are a Professor
in Quantitative Analysis
478
00:20:48,680 --> 00:20:50,158
at the University of
Southern California.
479
00:20:50,182 --> 00:20:51,193
Is that not correct?
480
00:20:51,217 --> 00:20:52,316
That is correct.
481
00:20:52,385 --> 00:20:53,561
You are also an
acknowledged authority
482
00:20:53,585 --> 00:20:55,297
on the laws of
chance and probability.
483
00:20:55,321 --> 00:20:57,221
Is that also not correct?
484
00:20:57,290 --> 00:20:59,101
My contributions to that field
485
00:20:59,125 --> 00:21:01,292
are regarded by
some as significant.
486
00:21:01,360 --> 00:21:03,372
And you have been present
throughout these proceedings,
487
00:21:03,396 --> 00:21:05,329
- have you not?
- That's correct.
488
00:21:05,398 --> 00:21:07,242
And do you feel,
with the evidence
489
00:21:07,266 --> 00:21:08,877
that has already been presented,
490
00:21:08,901 --> 00:21:11,013
that you can structure
a feasibility analysis,
491
00:21:11,037 --> 00:21:13,048
based on Mrs. Bates'
operational planning;
492
00:21:13,072 --> 00:21:15,139
in other words,
determine if it will work
493
00:21:15,207 --> 00:21:16,952
as Mrs. Bates has said it will?
494
00:21:16,976 --> 00:21:19,776
Yes, I have all the,
uh, data that I need.
495
00:21:19,845 --> 00:21:21,778
Fine. Dr. Sundstrom,
496
00:21:21,847 --> 00:21:23,948
please consider this
question carefully.
497
00:21:24,016 --> 00:21:27,717
Is it theoretically possible
for Mrs. Bates' plan to work?
498
00:21:27,786 --> 00:21:28,819
Theoretically?
499
00:21:28,887 --> 00:21:30,687
Theoretically.
500
00:21:30,756 --> 00:21:31,916
There's no doubt in my mind
501
00:21:31,958 --> 00:21:33,368
that it is
theoretically possible
502
00:21:33,392 --> 00:21:35,725
for Mrs. Bates' plan to work.
503
00:21:41,300 --> 00:21:43,567
Thank you very
much, Dr. Sundstrom.
504
00:21:43,635 --> 00:21:44,568
Your witness.
505
00:21:44,636 --> 00:21:45,669
Just hold on.
506
00:21:45,737 --> 00:21:49,406
I think I can lock
the barn door.
507
00:21:51,477 --> 00:21:54,111
Doctor, I understand you
say that Mrs. Bates' plan
508
00:21:54,180 --> 00:21:55,846
is theoretically possible.
509
00:21:55,914 --> 00:21:56,914
That's correct.
510
00:21:56,983 --> 00:21:58,427
Would you consider it practical?
511
00:21:58,451 --> 00:22:01,151
Engineers are experts
on practical matters.
512
00:22:01,220 --> 00:22:02,260
I'm a mathematician.
513
00:22:02,288 --> 00:22:04,621
I understand. Just
one more question.
514
00:22:04,690 --> 00:22:07,191
You heard Mrs. Bates testify
that the levels of membership
515
00:22:07,259 --> 00:22:09,071
could go right on
through the 12th,
516
00:22:09,095 --> 00:22:12,096
13th, 14th, even 15th levels.
517
00:22:12,164 --> 00:22:15,466
Now, to reach the 12th level,
how many members would it take?
518
00:22:15,534 --> 00:22:18,168
For the operational
plan to succeed,
519
00:22:18,237 --> 00:22:21,605
the base of the pyramid
must be broad enough,
520
00:22:21,673 --> 00:22:22,833
have sufficient membership
521
00:22:22,875 --> 00:22:24,752
interested in the
service feature only.
522
00:22:24,776 --> 00:22:27,211
Excuse me, Doctor. Would
you tell us in numbers?
523
00:22:27,279 --> 00:22:28,745
Well, certainly.
524
00:22:28,814 --> 00:22:31,181
For the plan to
work, it would require
525
00:22:31,250 --> 00:22:37,687
at least a minimum
membership of 360 million people.
526
00:22:39,158 --> 00:22:40,257
Dr. Sundstrom,
527
00:22:40,326 --> 00:22:42,070
are you familiar with
the Census Report.
528
00:22:42,094 --> 00:22:43,327
Census Report?
529
00:22:43,396 --> 00:22:45,040
Yes, according to
the Census Bureau,
530
00:22:45,064 --> 00:22:46,674
the population of
the United States.
531
00:22:46,698 --> 00:22:48,410
What would you
say that figure is?
532
00:22:48,434 --> 00:22:49,666
I don't know precisely.
533
00:22:49,735 --> 00:22:51,146
Well, as close as you can come.
534
00:22:51,170 --> 00:22:52,302
I'll take round numbers.
535
00:22:52,371 --> 00:22:55,672
Well, I'd say about
200 million people.
536
00:22:55,741 --> 00:22:57,752
About 200 million people
in the United States.
537
00:22:57,776 --> 00:23:00,411
Yes, sir. Well, then, Professor,
538
00:23:00,479 --> 00:23:03,447
in order for Mrs. Bates'
pyramid scheme to work,
539
00:23:03,516 --> 00:23:07,184
it would take a total of
160 million more people
540
00:23:07,253 --> 00:23:11,422
than the entire population
of the United States.
541
00:23:11,490 --> 00:23:14,425
That is exactly correct.
542
00:23:14,493 --> 00:23:16,527
♪♪
543
00:23:54,166 --> 00:23:57,245
The suspect was found
guilty of operating a lottery,
544
00:23:57,269 --> 00:24:01,605
as well as on a charge
of false advertising.
38486
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