Court imposes highest fine to date and highest possible compensation order against Lisa Morton in pyramid case
Published28 May 1999
The Napier District Court today imposed a total fine of $ 30,000 and the highest compensation order a District Court can make, $200,000, when it sentenced Lisa Sharon Morton for running two pyramid schemes.
Ms Morton is required to pay approximately $100 each compensation to 1,901 people whose orders for certificates were not processed after paying money into her schemes. The Commission will write to each of these people explaining how to get their compensation.
The Commerce Commission prosecuted Ms Morton for running the Joker 88 and Liberty Group Bond pyramid schemes. On May 6 the Court found her guilty on both charges.
Evidence presented in Court showed that Ms Morton owned assets worth $389,450 and had an additional $918.29 in her bank accounts.
"All pyramid schemes are illegal rip-offs," Commission Acting Chairman Mark Berry said. "They are prohibited by the Fair Trading Act."
"It is mathematically impossible for a pyramid scheme to work. Only a small number at the top can ever make money, and that is by ripping-off the people below them. Most people must lose money.
"The Court imposed, the highest total individual fine to date against Ms Morton. That is a strong warning to anyone considering operating or promoting a pyramid scheme in New Zealand, but enforcement action happens after people have been ripped-off.
"Whilst compensation has been ordered by the Court, consumers must also take responsibility for themselves and their money. Don't buy into pyramid schemes. If you do you will almost certainly lose your money.
"You also risk being prosecuted yourself. You do not have to start the scheme to be liable. If you operate or promote the scheme in anyway, including trying to recruit anyone, then you too can be prosecuted."
In this case the Commission is not prosecuting anyone other than Ms Morton. However, that does not prevent people taking their own action to the Disputes Tribunal or the courts.
If people are unsure about a scheme they should get independent advice from someone like a lawyer, accountant or financial advisor.
