Commission pops another scheme

The Securities Commission has banned advertisements for an investment scheme being illegally promoted by Lakeland Wealth Creators Limited. Another company called Wespap Limited is also involved.

The scheme offers improbably high returns. It has the hallmarks of prime bank schemes which are known to be fraudulent.

Margarite Papple is the sole director of Lakeland Wealth Creators. William Papple is the sole director of Wespap. Both people live in Rotorua.

The commission banned advertisements for the scheme because they do not comply with the law. To be promoted in New Zealand the scheme should have a registered prospectus and an investment statement. These do not exist.

"We understand that the customer enters into an agreement with Lakeland Wealth Creators to make a lump sum investment attracting 10% per month after an initial two-month stand-down period. The money is then sent overseas to organisations in the United States. There is no information given to customers about these organisations or how their money is invested," the commission says.

Some investors appear to have received returns but these are likely to have come from money subscribed by later investors.

The scheme has been promoted since September 2001, particularly in the Bay of Plenty. On the information available to the commission some $8 million has been paid into the scheme.

The commission warns people about committing money to this scheme and any scheme that promises unusually high rates of return.

"In the commission’s experience the only people who profit from such schemes are the people that organise and promote them."