Pyramid scheme promoter ordered to pay fine totalling millions of dollars

A woman touting herself as “the biggest scammer out there” has been ordered to pay a $5.9 million fine – the biggest ever individual criminal fine under the Fair Trading Act.

Wednesday, June 26th 2024, 9:41AM

by Sally Lindsay

Shelly Cullen promoted the global cryptocurrency-based pyramid scheme Lion’s Share to Māori and Pasifika communities in New Zealand during 2020 and 2021.

At the District Court sentencing Cullen’s description of herself was: “I am the biggest scammer out there. You know. But you can have hackers out there, you have the good hackers, and you have the bad hackers. You have the good scammers and then you have the bad scammers. I am, and I am proud to say it, I am a good scammer. They can do nothing to me. Guys I am not even worried. They can’t do anything to me. I am gonna continue doing what I do.”

Cullen was fined $600,000 and ordered to pay more than $5.3 million to reflect the value of the commercial gain she made through the scheme.

Commerce Commission deputy chairwoman, Anne Callinan, says the commission is pleased the significant sentence reflects the level of harm caused by pyramid schemes - 83% of participants in Lion’s Share worldwide lost money.

In an oral judgment the judge described Cullen’s offending at the top of the scale, and the maximum penalty of $600,000 as a starting point was entirely appropriate and proportionate in the circumstances.

"The commission takes pyramid scheme cases seriously because of the harm they can cause in our communities,” Callinan says.

“Cullen showed a blatant disregard for any consequences of her actions, and the commission argued for the court to order her pay the value of the commercial gain she made from Lion’s Share, as well as the fine imposed.”

Callinan says the penalty needed to outweigh what Cullen made through her offending to ensure the consequences of breaching the Fair Trading Act are enough to discourage her and others from reoffending.

The Commission was determined to see this case through even though Cullen was overseas so that the public could be warned of the damage her actions have caused.

People coming across a scheme promoted by Cullen, or an “investment opportunity” they are not sure about were warned by Callinan to ask two questions: Am I being asked to recruit other people into this programme, and is this the main way I can make money from the programme?

“If the answer to both questions is yes, you should reach out to someone you trust, like a friend or family member, and get a second opinion,” she says.

Pyramid schemes usually involve purchasing a membership or making an upfront payment into schemes that are frequently promoted as “investment opportunities”. These schemes are primarily an opportunity to recruit new members rather than to buy or sell goods or services to make money.

Tags: scam