Monday 29 January 2007 LAWFUEL – Australia Consumer & Business Law…

Monday 29 January 2007 LAWFUEL – Australia Consumer & Business Law – Looking for some sky-high options for your money? Why not put your money into the Mercorella investment scheme, offering 36 per cent per year? You could even get up to 72 per cent if you sign up your friends and acquaintances. Alternatively, you could split a cool $35 million with a Dr Paul Mbizala who’s got his hands on money belonging to investors in a US managed fund.

Once you’ve made your packet, you could fly out of Australia on a cheap flight overseas bought from New Flights Limited. Except the company is a fake, is not registered with the Australian Securities and Investments Commission (ASIC), and buys the tickets with stolen credit cards.

These outrageous offers are all fakes that won’t come true. That’s why they’re the top nominations for the ASIC ‘Pie In The Sky’ award for 2007. ‘ASIC announces the Pie In The Sky award once a year for the most outrageous financial scheme that’s too good to be true’, ASIC’s Executive Director of Consumer Protection, Mr Greg Tanzer said.

‘Pie in the sky financial schemes still devastate far too many people. They frequently use sophisticated props and hard sell techniques that lure even financially experienced people’, Mr Tanzer said. ‘The serious purpose behind these awards is to warn the public that get rich quick schemes promise the world, but usually end in tears.’ The ASIC 2007 Pie in the Sky Award goes to the Ponzi scheme operated by Guiseppe Mercorella that offered people between three and six per cent per month. Mr Mercorella’s illegal scheme received $216.9 million from investors who ultimately lost $76 million.

Mr Mercorella is now serving a five year jail term on ASIC charges. Many of the investors were from South Australia, and many from the local Italian community who became aware of the scheme through family and friends. This is typical of how many people become involved in ‘Ponzi’ schemes. Some investors mortgaged their homes to invest with Mr Mercorella. ‘Always deal with licensed Australian financial providers, because that way your rights are better protected if something goes wrong.’

‘You can check ASIC’s consumer website, FIDO for free at to make sure a scheme is operated by a licensed business’, Mr Tanzer said. 2007 ‘Pie In The Sky’ runners-up Pie In The Sky scheme How to get it A London man has $US34.5 million belonging to a US managed fund and he’s willing split it 50:50 with you. No risk, and the funds can never be traced. Contact the writer, and he’ll discuss the deal. A typical ‘advance fee’ fraud. You’ll be asked to pay various ‘handling’ and ‘administration’ fees until your patience or your money runs out. Get a cheap one-way ticket out of Australia with New Flights Limited. Email your ticket requirements. A fake company, not registered with ASIC, uses stolen credit cards. (You can check company details for free on FIDO or through ASIC’s main website.) ‘Anyone can nominate entries for ASIC’s Pie In The Sky Awards, through our consumer website FIDO at

We’ll give you $100 prize money for an entry that wins an award’, Mr Tanzer added. FIDO also has a list of illegal schemes where ASIC has taken action in court, obtained court orders and when those involved were identified in court. Background – Ponzi schemes Ponzi schemes are one of the more dangerous scams where the swindler promises investors a very high return on their investment and says it is secure. Part of the money deposited by investors is then used to pay their first dividend cheque or interest. The victims are happy. They don’t know they’re just getting paid out of their own money. They are encouraged to urge their friends and relatives to invest as well. Soon, there is a steady flow of funds into the scheme, and the number of investors grows. The swindler can rake off a significant amount of money and still pay the fake ‘dividends’ out of the new money coming in. However, the scheme inevitably collapses because the swindler rakes off more and more money, and eventually the pool of new investors starts to dry up. For further information contact: Mr Greg Tanzer Executive Director, Consumer Protection Telephone: 07 3867 4704 Mobile: 0411 549 144 Danielle Huck ASIC Media Unit Telephone: 03 9280 3407 Mobile: 0417 540 769

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