ComCom Secures Conviction Against Promoter Who Claimed They'd Be "One Of The Biggest Scammers In NZ

The Commerce Commission is warning consumers about the risks and increasing sophistication of pyramid schemes, following the conviction of the lead New Zealand promoter of one of the biggest pyramid schemes the Commission has seen promoted in New Zealand. The pyramid scheme in question, ‘Lion’s Share’, was responsible for approximately 150,000 participants worldwide losing a total of almost $NZD17 million.

Fair Trading General Manager, Vanessa Horne, says the successful prosecution of Shelly Cullen under the Fair Trading Act on five charges relating to the scheme highlights a brazen disregard for potentially vulnerable consumers – with the promoter having publicly stated: “I am going to make history as one of the biggest scammers in New Zealand”.

Ms Cullen promoted the global cryptocurrency-based scheme to Māori and Pasifika communities in New Zealand during 2020 and 2021. Ms Horne says pyramid schemes are evolving with the use of social media and cryptocurrencies and can often give the appearance of legitimate revenue generating opportunities.

"This case was a particular focus of the Commission as 83% of participants lost money from the global scheme, with the total lost worldwide estimated to be almost $NZD17 million - but it also highlights a much broader risk for Kiwi consumers," Ms Horne says.

“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”.

Ms Horne says the Commission is aware of new schemes circulating on-line, including one currently promoted by Ms Cullen and others within New Zealand.

“We are taking steps to reach these communities, urging them to exercise caution, and are reaching out to platforms – particularly Meta – where we are concerned about the nature of some schemes being promoted.”

“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."

"It is really important that all New Zealanders are fully informed and aware of the risks when considering similar opportunities that are promoted to them. Pyramid schemes are illegal in New Zealand under the Fair Trading Act, but some people may not recognise the features that define these schemes – so we’re reaching out directly to help get the warning to as many people as possible," Ms Horne says.

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.

Ms Cullen was convicted in the North Shore District Court, and a sentencing date has yet to be confirmed.

© Scoop Media