Shelly Cullen has been ordered by the Auckland District Court to pay $5.9m for her promotion of the pyramid scheme 'Lion's Share.' This is a combination of a $600,000 fine - the largest ever criminal fine issued to an individual under the Fair Trading Act - and an order to pay over $5.3m to reflect the value of the commercial gain she made through the scheme.
Commerce Commission Deputy Chair, Anne Callinan, says the Commission is very pleased that the significant sentence reflects the level of harm caused by pyramid schemes - 83% of participants in 'Lion's Share' worldwide lost money.
The Judge noted in their oral judgment on the day that Ms Cullen's offending is at the top of the scale, and a starting point of the maximum penalty of $600,000 is entirely appropriate and proportionate in the circumstances.
"The Commission takes pyramid scheme cases seriously because of the harm they can cause in our communities," Ms Callinan says.
"Ms Cullen showed a blatant disregard for any consequences of her actions, and so the Commission argued for the Court to order Ms Cullen pay the value of the commercial gain she made from 'Lion's Share,' as well as the fine imposed."
"The penalty needed to outweigh what Ms Cullen made through her offending to ensure that the consequences of breaching the Fair Trading Act are enough to discourage her and others from reoffending," Ms Callinan says.
At the sentencing hearing, the Judge referenced the following recent quote from Ms Cullen:
"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."
Ms Callinan says the Commission was determined to see this case through even though Ms Cullen was overseas so that the public could be warned of the damage her actions have caused. "This sentencing shows the Court agrees that Ms Cullen's behaviour showed a blatant disregard for the law, and that the level of harm caused was at the highest end."
"If you come across a scheme promoted by Shelly Cullen, or an 'investment opportunity' that you're not sure about you should ask yourself 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," Ms Callinan says.
Background
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.
Ms Cullen promoted the global cryptocurrency-based scheme to Māori and Pasifika communities in New Zealand during 2020 and 2021.
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