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View Full Version : TVI Express a pyramid scam, Australian Federal Court finds



littleroundman
12-01-2011, 12:49 PM
TVI Express a pyramid scam, Federal Court finds



by: Exclusive by John Rolfe and Rosemarie Lentini
From: The Daily Telegraph (http://www.dailytelegraph.com.au/)
November 30, 2011 8:51AM

A SYDNEY woman and two others flogging a supposed discount travel and accommodation deal were really running a pyramid-selling scam, the Federal Court has found.
Justice John Nicholas also found Lualhati "Teddi" Jutsen, Tina Aroha Brownlee and David Graeme Scanlon -- as promoters of a scheme called TVI Express -- breached the sections of the Trade Practices Act relating misleading and deceptive conduct.

http://resources0.news.com.au/images/2011/11/29/1226209/159464-jutsen-brownlee-scanlon.jpg
The Federal Court has found Tina Aroha Brownlee (left),
Lualhati "Teddi" Jutsen and David Graeme Scanlon
promoted a pyramid selling scheme

Justice John Nicholas also found Lualhati "Teddi" Jutsen, Tina Aroha Brownlee and David Graeme Scanlon -- as promoters of a scheme called TVI Express -- breached the sections of the Trade Practices Act relating misleading and deceptive conduct.

The judgment follows an undercover investigation by the Australian Competition and Consumer Commission in which staff posed as possible recruits. The case is believed to be the first civil action over pyramid selling.

The ACCC defines pyramid-selling schemes are "deliberate scams designed to benefit the originators while taking advantage of later recruits". According to the corporate watchdog, these schemes operate on the basis that members receive commissions for recruiting new members. However, the ACCC says, "they inevitably collapse leaving most participants out of pocket".

In his judgment, Justice Nicholas described TVI as a system which "purports to offer discounted accommodation and travel opportunities to members, as well as income-earning opportunities".

To become a member, a $US250 ($A253) fee had to be paid. For this, Justice Nicholas said, a travel certificate was received, "said to entitle them to free accommodation for six nights and seven days, a free companion flight, a virtual back office, access to an online travel portal, a self-replicating website and access to business tools".

This pitch, made at seminars in Sydney and elsewhere, reaped at least $297,000 in membership fees.

But Justice Nicholas found there was "no evidence" that any member had "obtained the ... vacation or a companion flight".

In his judgment he said: "I am satisfied that the TVI Express System was a pyramid-selling scheme".

"I am satisfied that the single most important inducement held out to prospective members of the scheme in this case was the prospect of them making money, large amounts of it, by encouraging other people to join who would have pay a membership fee to do so."

He also said: "The vacation representation was misleading or deceptive or likely to" mislead or deceive becase "people would not expect the travel certificates to be of no value".

The three also contravened the Trade Practices Act by falsely claiming an association with the Hertz Group, Carnival Cruise Lines and Malaysia Airlines.

The ACCC is expected to now seek substantial fines against the trio, as well as injunctions restraining them from engaging in similar conduct in the future. The maximum individual penalty for pyramid selling is $220,000.

TVI, which is incorporated in Cyprus, claims to be "creating leaders" in 150 countries.

The Australian (http://www.theaustralian.com.au/travel/news/tvi-travel-offer-really-a-pyramid-scam-federal-court-finds/story-e6frg8ro-1226209856419)