Court slaps pyramid scheme participants with $200,000 in penalties
Tuesday, May 22, 2012/
The Federal Court has imposed penalties totalling $200,000 on three individuals for their illegal participation in the pyramid selling scheme TVI Express.
The Australian Competition and Consumer Commission brought the action in the Federal Court against Lualhati Jutsen (also known as Teddi Jutsen), Tina Brownlee and David Scanlon for participating in a pyramid selling scheme.
The court ordered yesterday that Jutsen pay a penalty of $90,000, Brownlee was ordered to pay $80,000 and Scanlon $30,000.
Injunctions were granted for five years restraining all three from engaging in similar conduct and the court ordered that they pay the ACCC’s legal costs.
Justice Nicholas rejected arguments by Jutsen that she should be regarded as a victim of the scheme and also did not give any weight to Brownlee’s submission that she blamed the ACCC for not warning her that participation in the scheme was unlawful.
The TVI Express scheme was promoted through various websites including the site www.tviteamoz.com and the TVI Express Oz group on facebook.com.
The scheme extended throughout Australia and internationally, with people who wished to participate in the scheme required to pay a membership fee of $330.
Once an individual had paid the $330, they received a ‘travel certificate’ and the opportunity to receive commission payments for recruiting other people into the scheme.
The court found that the vouchers were of little to no value and that the only way a person could earn income from their participation in the scheme was from recruiting new members.
The ACCC said pyramid schemes may be identified, in part, by the extent to which the membership fee, or participant payment, bears a reasonable relationship to the value of goods or services that participants are entitled to be supplied under the scheme.
The consumer watchdog’s case commenced in May 2010, at a time when Jutsen, Brownlee and Scanlon were actively and heavily promoting the scheme in Australia and planning to travel to New Zealand to recruit more members.
The ACCC said it took “prompt action” in order to protect members of the public from being recruited to the scheme.
“Pyramid selling schemes are not legitimate businesses but scams promising the rewards of easy money that never arrives,” ACCC chairman Rod Sims said in a statement.
“People who are tempted to take part in pyramid selling should note the serious penalties they could face.”