ACCC Nobbles Online Wealth Management Scheme

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An online operation that offered self help and wealth management courses has been nobbled by the Australian Competition and Consumer Commission after a Federal Court Judge found that the Perth-based company had taken part in an illegal international pyramid selling scheme known as Emerald Passport.The Federal Court in Perth ruled that Cosic Holdings had breached the 1974 Trade Practices Act.

The Emerald Passport scheme was established by Emerald Passport, a corporation based in Panama. It promoted self help products that included internet-based audio visual presentations such as Mastering Money and Wealth Fundamentals.

Under the scheme, participants made an annual payment to Emerald Passport Inc. induced by the prospect that they could earn between US$1000 to US$10,000 each time they introduced a new participant to the scheme. They would also earn “commissions” from people the new participants subsequently introduced and so on.

The court found that Cosic Holdings had taken part in the scheme by establishing or controlling websites relating to the scheme, printing promotional material, arranging advertising in newspapers and making and receiving payments from other participants in the scheme. The court also declared that the company’s director, John Cosic, was a party to Cosic Holdings’ contravention.

 

The court made orders, by consent, which prevent Cosic Holdings and Mr Cosic from taking part in similar schemes. The court ordered that Cosic Holdings publish notices in various newspapers. Cosic Holdings and Mr Cosic were ordered to pay the ACCC’s costs.

“People are attracted to these schemes by the prospect of earning quick money through recruiting others into the scheme,” ACCC chairman Graeme Samuel said today. “Success depends on the number of people they can recruit, and in turn on the number those below them can recruit. Ultimately pyramid schemes must fail as it becomes harder and harder for participants down the chain to recruit people. Inevitably people will lose their money.

“Pyramid selling schemes are nothing more than scams. These proceedings should act as a warning to people promoting or participating in schemes of this nature that the ACCC will take strong enforcement action to stop the promotion of such schemes.”

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