Third Promoter Prosecuted Over "World Net" Pyramid
Third Promoter Prosecuted Over "World Net" Pyramid Selling Scheme, More Prosecutions Pending
Commerce Commission action against the World Net pyramid selling scheme has continued with the Auckland District Court fining Gregory Paul Williamson $4,000 for promoting the scheme.
Commission Chair John Belgrave said that the Court had previously fined Terrence Samuel Wall $4,000 for promoting World Net plus $4,000 for promoting another pyramid selling scheme, Focus International Credit Card Plan. The Court had also fined Kevin Leslie Bryson $2,500 for promoting World Net. The Commission is prosecuting a fourth man who it alleges also promoted World Net.
In imposing the fine, Judge Gittos said that Mr Williamson's involvement had been of similar magnitude to Mr Wall's.
"All pyramid selling schemes are illegal in New Zealand," Mr Belgrave said. "They are all rip-offs.
"Disturbingly, they are now often promoted in ways that deliberately hide their true nature. They use slick, professional looking presentations. Most people would not be able to analyse the information given in promotions, but can easily understand the promises of big profits.
"For the vast majority of people, those promises are false and they lose their money.
"The message for consumers is that get rich quick schemes do not work. They allow the few people at the top to take money off the many people below them."
The Commission advice to consumers is to always get professional independent advice before investing money in any scheme. They should not rely on claims made by the promoters nor on people who claim to have made money from the scheme.
They could talk to people like an investment advisor or manager at their local bank, an accountant or a lawyer.
World Net was based in Texas and people each paid US$149 plus US$10 to join. Amongst the claims made about it was that the scheme could turn the US$159 into US$1.2 million. In New Zealand, World Net was promoted through flyers and other documents and at meetings.
Section 24 of the Fair Trading Act prohibits all pyramid selling schemes. Courts can impose fines of up to $30,000 on an individual and up to $100,000 on an organisation. They can also impose various orders and injunctions.
Last year, the Auckland High Court ordered Tauranga brother and sister, Kerry Lindsay Paul and Coralee Ngaio Judson to pay back more than $3.1 million to people who had bought into their Maximus Intermediaries Limited pyramid selling scheme. However, Maximus owes creditors and the Inland Revenue Department more than $1.3 million, and the 12,000 people who bought into the scheme will probably get nothing back.
In 1999 the Napier District Court fined Lisa Sharon Morton $30,000 and ordered her to pay back $200,000 to people in the Joker 88 and Liberty Group Bonds pyramid selling schemes.
Media contact: Fair Trading Manager Rachel Leamy Phone work (04) 498 0908, cellphone 025 208 0841, home (04) 569 5058
Senior Advisor Communications Vincent Cholewa Phone work (04) 498 0920, home (04) 477 0039 Commission media releases can be viewed on its web site www.comcom.govt.nz