The Christchurch High Court has rejected an appeal by [Concealed under the Criminal Records (Clean Slate) Act 2004] against his conviction and fine of $10,000 plus $2,000 costs for operating a pyramid selling scheme.

Commerce Commission Chairman Dr Alan Bollard said that all pyramid selling schemes are illegal under the Fair Trading Act.

"I see absolutely no merit in this appeal," Justice Hansen stated in his decision.

The Commission had in May this year successfully prosecuted [Concealed under the Criminal Records (Clean Slate) Act 2004] for operating a scheme known variously as "Black Magic 95", "Magic 95," and Black Magic". The prosecution was in the Christchurch District Court.

At the conclusion of the District Court trial, [Concealed under the Criminal Records (Clean Slate) Act 2004]'s lawyer had conceded that [Concealed under the Criminal Records (Clean Slate) Act 2004] had promoted a pyramid selling scheme. The defence centred on whether [Concealed under the Criminal Records (Clean Slate) Act 2004] had made a "reasonable mistake" or had placed "reasonable reliance on information supplied by another person", in this case a lawyer.

The District Court rejected these defences and convicted and fined [Concealed under the Criminal Records (Clean Slate) Act 2004]. [Concealed under the Criminal Records (Clean Slate) Act 2004] then appealed to the High Court, and his appeal has now been dismissed.

Dr Bollard said the Court's decisions highlight an important point about pyramid selling schemes.

"Anyone involved in pyramid selling is breaking the law. Even if you did not start the pyramid, you can be convicted and fined. That is what happened to [Concealed under the Criminal Records (Clean Slate) Act 2004]."

The man who started the scheme, Sean Wright, was also prosecuted by the Commission. Mr Wright was found guilty and fined $15,000 plus $2,000 costs.

Penalties totalling $29,000 have to date been imposed against people involved in this pyramid scheme.

Media contact: Fair Trading Manager Rachel Leamy

Phone work (04) 498 0908

Commission media releases can be viewed on its web site www.comcom.govt.nz