Supreme Court convicts two for running pyramid scheme that recruited church members

    Two women have been found guilty in the Supreme Court for running a pyramid scheme.

    The two accused, Viola Tupa (Tupa), and ‘Anaseini Pongi (Pongi) were charged with advertising a scheme in Kolomotu’a , where profits earned by participants in the scheme largely depended on increases in the number of participants in the scheme.

    Known as pyramid or Ponzi schemes, such schemes are contrary to section 3A of the Financial Institutions Act.

    According to the Act, anybody who directly or indirectly, initiates, offers, advertises, conducts, finances, manages, supervises or directs a scheme where profits earned by participants in the scheme largely depend on increases in the number of participants in the scheme or in the size of their contributions to the scheme is liable upon conviction to a fine not exceeding TP$1 million or to prison for not more than 30 years, or both.

    Evidence was presented to court by serving police that Tupa had tried to persuade people working in the Police Department to join the scheme.

    Siosateki Vainikolo, a police officer in the Professional Standards division said he interviewed the accused, Pongi, who said she paid about $1180 to join the scheme.

    She told Vainikolo she had to recruit eight people before she could expect any repayments. She made TP$8295.

    A few people took payments, but she asked them to pay back the money so new recruits could be repaid their monies. She said they collected about TP$30,000 and paid it all out, but it was not enough to refund everyone.

    Evidence was also presented to the court that Tupa had promoted the scheme and e-mail records showed Tupa and Pongi discussing recruiting from fellow church members.

    The accused did not give evidence or call any witness.

    In his summary of the case, Mr Justice Niu, presiding, said there was uncontested evidence that there was a scheme in which every participant had to register with a certain sum of money.

    Each participant had to recruit another eight people who were each to register with a sum of a similar amount. Upon the registrations of those eight people, those eight people had to recruit eight persons each and so on.

    The earlier participants got their profits from the monies which the later participants paid. The more participants there were, the more profits there were for the earlier participants, and so on.

    Both Pongi and Tupa stood to gain their profits, from the increase of the number participants in the scheme.

    Mr Justice Niu said the accused advertised the scheme to members of the church they each attended and invited them to join.

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