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Infinity Concierge scheme costs promoter $11,520

Infinity Concierge scheme costs promoter $11,520

Following the recent Commerce Commission prosecution of pyramid selling scheme Infinity Concierge Limited and its operators, a fifth defendant, David John Mawson, was fined $11,520 including costs in the Christchurch District Court yesterday for operating or promoting a pyramid selling scheme, in breach of the Fair Trading Act.

Infinity Concierge and its operators were fined a total of $38,760 including costs last month. Four men pleaded guilty to the charges of promoting the British-based international selling organisation. The defendants’ lawyer was unable to contact David John Mawson, so the case proceeded to formal proof.

In sentencing, Judge Erber described the breaches as serious and said that the chance of earning $182,000, as promoted in the presentations, was remote for 99.9% of members.

He commented that the scheme was a pyramid scheme, and very few would make a profit from it, some would break even, and most would lose.

Judge Erber also ordered repayment of membership fees totalling $7,875 to two witnesses from a frozen company bank account, bringing to over $58,000 the total cost to Infinity Concierge and its operators.

The Commerce Commission has recently sent out warning letters to a large number of the other people who were involved, to a lesser extent, in the Infinity Concierge scheme.

“The Commission has warned these individuals that it may take stronger enforcement action against them if, in the future they are involved in promoting pyramid selling schemes,” said Director of Fair Trading Deborah Battell. Background Infinity Concierge offered membership costing $3,500 plus GST to an alleged concierge service. In addition they offered access to a closed buyer group that claimed to receive discounts at various rates from a number of businesses.

Members were also given the opportunity to earn significant remuneration by the recruitment of new members. The latter was given prominent emphasis throughout the invitation-only presentations held in both Christchurch and Auckland last year.

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A bill currently before Parliament would, if enacted, significantly increase the penalties for operating a pyramid scheme. Under the proposed Fair Trading Amendment Act, operators would face penalties of up to $200,000 (for companies) or $60,000 (for individuals). In addition, the courts could fine people up to the value of any commercial gain resulting from the scheme.

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