Women guilty over ‘pyramid’ scheme

A band of “greedy” middle-aged women masterminded a £21 million get-rich-quick scheme – fleecing at least 10,000 victims.

The group used mass emails and “champagne celebration nights” to encourage women to “beg, borrow or steal” £3,000 to invest in the scam.

Victims were lured by the promise they would receive a £24,000 payout when they reached the top of their pyramid chart, with organisers promising they “could not lose”.

The scheme, called Give and Take (G&T), quickly spread from Bath and Bristol to Gloucestershire, Somerset, Devon and Wales between May 2008 and April 2009.

Committee members behind the scheme pocketed up to £92,000 each, while as many as 88% of their victims lost between £3,000 and £15,000.

G&T, also known as Key to a Fortune, was kept under a veil of secrecy as members were forbidden from writing about it to protect the organisers.

But the pyramid was uncovered when a disgruntled employer in Bristol complained to Trading Standards that it was being promoted in his workplace.

Eleven women, aged between 34 and 69, became the first in the UK to be prosecuted for such a scheme, under new legislation in the Consumer Protection from Unfair Trading Act 2008.

Six of the women have been sentenced, while a further three will be sentenced at Bristol Crown Court in October.

One woman was acquitted of promoting the scheme, while two juries failed to reach a verdict for another woman on the same charge.

Judge Mark Horton, who banned reporting of the case until today, said: “This particular scheme caused a loss to the general public of around £19 million. A number of these women suffered enormous and in some cases lifelong financial hardship due to their involvement in this scheme.

“The public need to be aware that schemes like this lead to the destruction of lifelong friendships and families and in some cases whole communities.”

On Wednesday, charts co-ordinator Mary Nash, 65, committee secretary Susan Crane, 68, and games co-ordinator Hazel Cameron, 54, pleaded guilty to charges of operating and promoting the scheme.

The women were due to face a retrial, after a jury failed to reach verdicts in their cases in 2013.

In 2012, Sally Phillips, 34, of Hengrove, Jane Smith, 50, of Bishopsworth, both Bristol, and Rita Lomas, 49, of Whitchurch, Somerset, admitted promoting the scheme.

Phillips received a three-month suspended prison sentence, Smith a four-month suspended sentence and Lomas a four-and-a-half month suspended sentence.

Following a five-month trial in 2012, chairman Laura Fox, 69, treasurer Jennifer Smith-Hayes, 69, and venue organiser Carol Chalmers, were convicted of operating and promoting the scheme.

Fox, of East Harptree, Smith-Hayes of Bishopsworth and Chalmers, of Weston-super-Mare, were sentenced to nine months imprisonment. They have now served their sentences.

No verdict was reached following two trials of Tracey Laurence, 60, of Bradley Stoke, while Rhalina Yuill, 34, of St George, Bristol, was acquitted of promoting the scheme on her second trial.

The scheme operated on pyramid charts with 15 spaces on – each space 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 at the top, called the “Bride”.

Payouts were collected at glitzy champagne parties, where “Brides” were asked a series of simple questions before being handed the £24,000 on a silver platter.

Questions included “what is the name of the big tower in Paris” and “what type of animal is a Great Dane”, with the option to ask a friend if the “Bride” did not know the answer.

A set £1,000 fee from the payout was deducted, with £600 shared between charities and £400 used to pay committee costs.

Miles Bennett, who prosecuted both trials, told how parties took place at the Battleborough Grange Hotel in Burnham-on-Sea, owned by Carol Chalmers.

Mobile phone footage recorded at one party showed Laura Fox shouting: “We are gambling in our own homes and that’s what makes it legal.”

Mr Bennett described the evenings as a “commercial practise”, with minutes from committee meetings showing how £240,000 in cash was paid out one evening.

“This wasn’t a kitchen hobby, this was a scheme that sucked in a lot of people and which worked on the promise of them receiving riches way beyond their initial investment,” he said.

Minutes from meetings reveal “sheer indignation” that a “Bride” had brought cava instead of champagne to celebrate her payout, and some women were chewing gum.

Mr Bennett said those who attended the meetings were promised a £23,000 payout from their £3,000 investment.

“It is clear that, blinded by the possibility of riches and quick bucks, people were quite prepared to ignore the bleeding obvious pitfalls of a pyramid scheme”, he said.

Speaking after the case, Alex Chisholm of the Competition and Markets Authority, said the case would be a “warning for consumers”.

“The vast majority of consumers stand to lose their money from such schemes,” Mr Chisholm said. ” The adage remains, that if it sounds too good to be true, it probably is.”

The G&T scheme generated £21 million.

Around £19 million of this was lost on the charts, while the remaining £2 million was paid out to those who reached the “Bride” position.