A pyramid scheme touting the possibility of turning a mere $100 investment into a cool $200,000 appears to be sweeping through the fashionable homes of Washington's black class.

Dozens, possibly hundreds, of well-heeled, highly educated people - including doctors, lawyers, school teachers, government workers and businessmen - have jumped at the chance to invest in the get-rich-quick scheme called "#The Circle of Gold" as an easy way to reap thousands of fast dollars.

The Circle of Gold is a trendy version of the classic pyramid scheme pioneered in Boston by Italian immigrant Charles Ponzi in the 1920s. The victims at the end of his pyramid scheme were lower-middle-class workers desperate for riches. In the "Circle," they appear to be respectable members of the middle class looking to outsmart inflation with a large slice of pie in the sky.

Almost every night, promoter-investors gather over white wine and hors d'oeuvres and flip charts in the intimate setting oa a private home. Waving envelopes stuffed with $50 bills as proof that the scheme works, they try to sell their friends and colleagues what, authorities say, is a highly questionable chain letter that not only may violate federal lottery and mail fraud statutes but inevitably picks a lot of pockets.

Nonetheless, investors believe it's legal and defend the "#Circle" with all the zeal of devotees pulling around some new street-corner religion.

"All you have to do is wait your turn in line and everything will work out just fine," says Milton Fowler, a Hyattsville resident active in the "Circle." "It's better than working."

"I have no problem with what I'm doing," said his wife, Austine B. Fowler, a former D.C. public school administrator turned HEW project officer who plugs the scheme at parties and keeps track of her pyramid in a spiral notebook. "I do a lot of volunteer work. What's the difference between my service work and The Circle of Gold? One's for public service and one's for self-service."

When Dr. Kenneth Smothers, a 34-year-old psychiatrist, invited 100 friends and associates over to sell them on the Circle of Gold last month, "some people got their money back that same night," he recalls.

"You're doing it among friends, so that makes it much easier [to sell]...I wouldn't fraud a friend....

"I just tell people about the concept and its viability and people buy in based on your integrity. Some people say, #I'm going to do you a favor. I'll buy a list." But we don't want them. We want # responsible people who will sell (the lists to others)."

The deal works like this: an investor buys a list of 12 names for $100 and recruits two friends, eaeh of whom contributes $100. The original investor keeps $50 from each of them - breaking even - and the other $50 goes, by hand or via the mails, to the name that appears on the top of the 12-name list. The new investor puts his name on the bottom.

Theoretically, as names move to the top of the list, investors stand to collect $50 fees from total strangers who buy into the scheme. And some of them do.

"There's a kind of psuedo-Christian theme to the Circle of Gold," said Betty Wallace, a consumer affairs official in Marin County, Calif., where the Circle was apparently born last summer and raced like wildfire through champagne brunches and woodsy bungalows.

"It's sort of keyed to achieving prosperity and passing it along to your fellow man."

But as Wallace and other Circle critics point out, such schemes produce no wealth in and of themselves. Every dollar changing hands comes from someone else's pocket. And soon there are no pockets left to empty.

"People began to lose out on it, and that's when we started getting complaints," said Wallace. "It started out among very well-to-do people who could afford to make a mistake. But pretty soon they were pulling in senior citizens on Social Security."

Then the Circle headed east, arriving in Washington this spring after saturating suburban New Jersey.

D.C. psychiatrist Smothers said he received his first $50 in the mail last month, precisely four weeks and two days after buying into the "Circle" at the urging of a friend. He said he expects a flood of such letters to start arriving any day now....

Smothers said he has received patient referrals from circle of Gold parties, but the parties haven't been all business. Women were attracted to the parties, said Smothers, and any place women are attracted, men are rarely far behind.

"If 4,098 people each bring in two people, you could make $204,800!"

Perched on a couch in the living room of a contemporary Chillum, Md., home, a purple-suited pitchman named Joel oozed instant camaraderie from behind tinted sunglasses as he hawked the scheme at one Circle of Gold party on a recent Thursday night.

He declined however, to give his last name. His name tag said only "Circle of Friends."

"If we can just create enough energy in people to BELIEVE in the concept, there's no way you can stop it," he said. Seven people sitting beneath art posters in the home of Sears branch manager Anthony Pierce listened attentively.

But accountant Isaac Whitman, 35, balked. He wondered aloud what would happen to those at the bottom of the pyramid who might be unable to resell their lists.

"If you sell to someone who cannot resell the list, you are un irresponsible purchaser," bristled Joel. "It's the height of irresponsibility to market the list to a person who cannot recoup their $100 investment."

There were, of course, "no guarantees," he went on, though he did mention a New Jersey woman" who had financed two $23,000 Mercedes and a $200,000 house from the Circle of Gold.

"We want people who will market the concept - we want "we" people," snapped an investor. "If you don't believe in yourself enough to sell the list, you should take your money to General Motors."

What about the law? asked Whitman.

"It's no different than a mother sending money to her son," said Joel "Is that illegal?"

Pierce, whose silver 1978 Cadillac Seville was parked on the cul de sac outside, later said the Circle of Gold had been "checked out with lawyers," but declined to furnish any names.

"The people I know wouldn't be ? involved in this kind of thing if they thought it wasn't legal. We have a hell of a lot more to lose than we have to gain."

Joel was rapidly losing his good fellowship. Indeed, the mood was turning downright ugly. Everyone was angry at Whitman for bringing a reporter. And, besides, Joel just couldn't fathom why Whitman thought $100 was such a big deal.

"One hundred dollars means a lot to me," said Whitman, who keeps the books for Common Cause. "When you have dinner with your wife and kids and the bill comes to $23, you don't leave $100 and tell the waiter to keep the change."

"That," snapped Joel, "depends on what you're celebrating, man."

And Whitman and the reporter were "Circle" to leave. The party was over.

"About three months ago, I was in a restaurant and a lawyer I knew asked me if I might be interested in the Circle of gold," said Bill Lindsey, president of The Foxtrappe, a trendy, 8,000 member of Northwest Washington night club whose Monday Night Meltdowns pack the dance floor with upwardly mobile young professionals. His ears are virtual geiger counters for what's happening.

"I've heard a lot of talk about it. There's a lot of interest among people who I'm surprised to find interested."

When the lawyer invited Lindsey to a meeting, Lindsey posed the question of using the mails. "He said, "No problem. We get together at meetings and handle everything there. The only time we use the mails is when people mail you the money," Lindsey said.

Asked why a chain letter scheme would appeal to such generally level-headed professionals, Lindsey said, "It's simple - easy money. Even though a person may earn $20,000 to $25,000 a year, that doesn't go far these days when you're living according to your means. And most people live a little bit above anyway.

"Most feel good after they make their two sales, thereby recouping their $100. They can sit back and wait - and if something happens, fine. For a lot of them, it's their first adventure in a world of chance or risk. Just to get their money back, folks are pleased."

It's been several weeks now since the Reuben Winstons hosted a Circle of Gold party for 30 to 40 people at their home at 1930 Kierney St. NE. Mrs. Winston says, "We're enthusiastic, but we haven't made one dime yet." She isn't sure how long it will take.

Her husband teaches social studies at McKinley High School. They are long-time friends of the Fowlers and have gotten to know the Pierces better through the Circle of Gold. Dr. Smothers says he entered their circle when he dropped by the Pierces' for a recent presentation and now, he says, "It's all for one and one for all. When you help a person at the bottom of a list, you help yourself."

"Everyone comes over with a common interest," says Mrs. Winston. "No one is ripping off some poor guy. I couldn't afford $100 and I wouldn't sell the concept to them. No one's robbing Peter to pay Paul."

No so, says Jeffrey Werner, Maryland's assistant attorney general for consumer protection who, in March, successfully obtained an injunction in Frederick County Circuit Court against two Circle of Gold promoters under state lottery statutes. Anyone participating in, or promoting, the scheme in Maryland now could be subject to contempt charges.

At the April 9 hearing on the injunction, some 150 irate investors - furious that prosecutors would dare to break the circle - packed the courtroom as used car dealer Ronald Martin testified to collecting $7,000 from investors. And, on Thursday, 20 Circle of Gold members bowed their heads outside a Norfolk courtroom on behalf of Herbert A. Vincent, 40, a Virginia solar contractor who was later fined $100 and sentenced to 30 days in jail for promoting a fraudulent get-rich-quick scheme. "Lord, we are underpaid and overworked and now folks want to tell us how to spend our money," intoned a prayer leader. "We ask for your help." Vincent said he would appeal.

At the Frederick hearing, an Oxford-educated mathematician testified for the state that by the 27th level of the pyramid, investors would outnumber half the U.S. population, and that, soon thereafter, there would be hardly anyone left on earth to sell the concept.

"All chain letters or any endless chain scheme is a ripoff," says Werner. "If someone makes money someone has to lose money because a pyramid doesn't produce income. There's no capital investment. It's simply money changing hands." CAPTION: Illustration, no caption, The Washington Post