The Federal Court has made declarations by consent that Mr Leslie Forsyth Stott, a former director of Crimeguard International Security Systems Pty Ltd, was knowingly concerned and a party to Crimeguard’s participation in a pyramid selling scheme. Mr Stott also engaged in false, misleading and/or deceptive conduct concerning representations about the profitability of the Crimeguard business.
Pyramid selling schemes are an arrangement in which persons make a payment to join the scheme, having been substantially induced to join, on the basis that they can subsequently earn payments for inducing others to join the scheme.
As a result of Mr Stott’s involvement in a pyramid selling scheme, Justice Middleton also made an order by consent banning him from managing a company for five years.
“Pyramid selling schemes are designed to benefit the originators while taking advantage of later recruits. This action against Mr Stott is significant as it is only the second time the ACCC has obtained orders from the Federal Court disqualifying an individual from managing companies," ACCC Chairman Rod Sims said.
As well as disqualifying Mr Stott for five years, Justice Middleton imposed a permanent injunction against Mr Stott restraining him from engaging in pyramid selling schemes.
Justice Middleton further restrained Mr Stott from engaging in the promotion of business activities or opportunities where representations are made as to the potential earnings of that business activity, where there are no reasonable grounds for such representations.