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A promoter of a sophisticated pyramid scheme, self-described as one of the biggest scammers in New Zealand, has been convicted in North Shore District Court on five charges under the Fair Trading Act.
The Commerce Commission said Shelly Cullen promoted the global cryptocurrency-based scheme to Māori and Pasifika communities in New Zealand during 2020 and 2021, with 83 percent of participants losing their money.
Fair Trading general manager Vanessa Horne said the pyramid scheme in question, 'Lion's Share', was responsible for about 150,000 participants worldwide losing a total of almost $17 million.
She said Cullen showed "brazen disregard" for potentially vulnerable people and publicly stated she was "going to make history as one of the biggest scammers in New Zealand".
"We take pyramid scheme cases seriously because of the harm they can cause in our communities. People are often misled about the financial benefits of membership and the level of risk. When these schemes collapse, the impacts on most of those involved and their families can be devastating."
Horne said other pyramid circulating were circulating online, including one currently promoted by Cullen and others in New Zealand.
"Ms Cullen has been promoting a new investment opportunity known as 'MaVie', and so we are urging communities to exercise caution around this and all similar schemes.
"We think this is particularly important following the court's finding that Lion's Share was a pyramid scheme, and Ms Cullen's conviction for the promotion of that scheme."
Horne said pyramid schemes were illegal in under the Fair Trading Act, but some people may not recognise the features that define these schemes.
She said pyramid schemes were evolving with the use of social media and cryptocurrencies and often gave the appearance of legitimate revenue generating opportunities.
"Pyramid schemes usually involve purchasing a membership or making an upfront payment into schemes that are frequently promoted as "investment opportunities". These schemes are primarily an opportunity to recruit new members rather than to buy or sell goods or services to make money."