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20 August 2001
News Release
WARNING - ADS BANNED FOR SCHEME RELATED TO CAR BUYING ARRANGEMENTS
The Commission has become aware of yet another offshore scheme which is illegally promoted. Under this scheme people commit sums of money to offshore destinations as part of arrangements for buying new motor cars. The scheme claims to produce improbably high returns.
As we understand, the customer enters into a hire purchase agreement for the full retail value of the car. The actual price of the car is less than the full retail value as stated on the hire purchase agreement and the margin between the two is committed to the offshore scheme.
It is said that the high returns on the money in the scheme will cover the customer's obligations under the hire purchase agreement and in time will pay off all that is owing on the car. People are encouraged to commit money on the basis that this may be possible.
The Commission has prohibited the distribution of advertisements relating to the offshore scheme. In the Commission's opinion the scheme is subject to securities law. If it is to be promoted at all in New Zealand there should be a registered prospectus and an investment statement. There should also be a trust deed or a participation deed. These are not available in this case.
A person promoting the scheme is Graham John Cumming of Tauranga. He arranges for a company called Marmol Finance Inc to receive the money. This is said to be a Panamanian company. There is no information about the company or what happens to the money.
The claimed returns on the money are improbably high (10% per month).
The scheme has been promoted by Cumming in the North Island but particularly in the Bay of Plenty, Manawatu and Wellington regions.
The Commission warns people about committing money to this scheme and any scheme that promises unusually high rates of return. In our experience the only people that profit from such schemes are the people that organise and promote them.
Contact:
Norman F Miller
Senior Executive (Operations)