Commission seizes gems linked to pyramid scheme
The Commerce Commission has seized emeralds and other gemstones worth several hundred thousand dollars from a Tauranga company, Hot Ice International Limited.
Commission Acting Chairman Mark Berry said that the Commission believes the gems were bought with the proceeds from an allegedly illegal pyramid selling scheme, Maximus Intermediaries Limited.
“Our investigation into Maximus showed that hundreds of thousands of dollars had been advanced from Maximus to Hot Ice,” Mr Berry said. “We now believe that Hot Ice used it to buy uncut gems to be cut and resold in New Zealand.
“We obtained court orders to seize the gems, we have now seized them and they are in secure custody.”
Earlier this month the Commission obtained interim injunctions from the Auckland High Court freezing Maximus’ bank accounts. There is $250,000 in those accounts.
Tauranga woman Coralee Ngaio Judson is a director of both Maximus and Hot Ice. She ran Maximus with her brother, Kerry Lindsay Paul.
The gems from Hot Ice and the money in Maximus’ accounts will be held until the Court makes final orders about what should happen to them. It could be two months before the Court makes its final declarations and orders.
The Commission is to ask the Court for:
a final declaration that Maximus was a pyramid scheme;
a final declaration that Maximus, Mr Paul and Ms Judson engaged in conduct that was misleading or deceptive;
a final declaration that the interim injunctions against Maximus, Mr Paul and Ms Judson become permanent; and
final orders about what will happen with the money in Maximus’ bank accounts and the gems seized from Hot Ice.
About 12,000 people nation-wide bought into Maximus. The Commission believes most of them borrowed to do so. They bought what were called "tri-packs" for $506.25. The loans cost them $600 over 30 weeks and were made by Mr Paul and Ms Judson trading under the name Croesus Finance.
All pyramid selling schemes are illegal in New Zealand. They are prohibited by section 24 of the Fair Trading Act.
In the most recent pyramid selling case taken by the Commission, the Napier District Court ordered Lisa Sharon Morton to pay $200,000 compensation to 1,901 people.