£21 million Pyramid Scheme fraudsters jailed

£21 million Pyramid Scheme fraudsters jailed

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Introduction

Over the last few years, the South West of England has played host to a multi-million pound pyramid scheme called, variously, “Give and Take” and “Key to a Fortune”.

It seems that the members were sworn to secrecy, although it did, eventually and inevitably, come to light when someone complained to Trading Standards. They launched an investigation and, eventually, the first prosecution under the Consumer Protection from Unfair Trading Regulations 2008 (if you’re not familiar with these, there’s a link here).

After a lengthy process, and two trials one of which ended in a hung jury, six of the eleven people prosecuted pleaded guilty, three were convicted and the remaining two were acquitted. The reporting restrictions were lifted after three pleaded guilty just before a proposed re-trial following the jury being unable to agree at their first trial.

 

How did this scheme work?

It seems to have been a classic pyramid scheme. According to the Daily Mail, “Each of 15 spaces was filled with a participant who paid £3,000 and introduced two friends, who also paid that amount. Once the chart was filled, the eight people on the bottom of the chart paid their £3,000 to the person on the top, called the ‘Bride’. Participants collected their winnings at specialist prize-giving pamper parties, where they would be asked a series of simple questions before being handed the £24,000.A set £1,000 fee from the payout was deducted, with £600 shared between charities and £400 used to pay costs the committee occurred“.

Basically, you pay £3,000 to buy in and hope that more people follow you in. If they do, then you get £23,000 when you get to the top of the pyramid.

Who was involved?

The three women who pleaded guilty on 18th September 2014 will be sentenced next month (presumably after a Pre-Sentence Report has been obtained) are :

  • Mary Nash, 65 (charts co-ordinator )
  • Susan Crane, 68 (committee secretary)
  • Hazel Cameron, 54 (games coordinator)

The three people who pleaded guilty originally were all spared an immediate custodial sentence as follows:

  • Sally Phillips, 34 – 3 months suspended
  • Jane Smith, 50 – 4 months suspended 
  • Rita Lomas, 49 – 4½ months suspended

The three who were convicted after a trial all received prison sentences of 9 months :

  • Laura Fox, 69
  • Jennifer Smith-Hayes, 69
  • Carol Chalmers, 68

What to make of the sentence?

Difficult to know really. This is the first of its kind, so we would imagine that there would have been an appeal. The maximum sentence is only 2 years (so a lot less serious than other fraud offences) and with the absence of any guidelines, or more details, it’s pretty hard to say.

There was clearly a huge amount of money involved however, so a ‘top of the range’ sentence could be expected. We would have thought that those who pleaded guilty yesterday should just about get a non custodial sentence.

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Dan is a barrister at 2 Dr. Johnson’s Buildings practising in crime.

3 COMMENTS

  1. I would be very surprised if, on the limited evidence available in the reports, and without knowing anything of the personal circumstances of these three, the sentences were suspended.

    A guilty plea at the very latest possible moment should not attract more than at the very, very most a 10% reduction in sentence, and I tend to agree with Dan that a top of the range sentence would appear to be called for.

    It will be interesting to see what transpires and what the judge’s sentencing remarks reveal.

  2. I have not seen anything in the press reports about whether or not the Crown Court made any other orders against any of the convicted defendants (such as confiscation orders and / or compensation orders).
    David

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