25/01/2005 - 21:00

Loan club wins pie award

25/01/2005 - 21:00

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Loan club wins pie award

An interest-free loan scheme has won the Australian Securities and Investments Commission’s Pie in the Sky award.

Called the Carsworthy Scheme, it raised $2.4 million from 220 people who were told that if they bought a car through a car buyer’s club and borrowed a little more from their financier and invested it offshore, the high returns would repay their car loans.

In fact, when the offshore investments failed to deliver promised returns, people were left to find their own repayments, often for very high loans that they would probably not have entered into.

Another similar case involved Wide I Design Corporation, a company registered in Vanuatu, ETP Ventures Pty Ltd and Cyprus Strategies Pty Ltd where car and home loans were offered on a similar basis.

In that case ASIC’s investigation found the unregistered managed investment schemes promoted the investment of Australian investors funds offshore and raised at least $2.2 million.

ASIC investigators found the two separate schemes raised at least $4.6 million from around 400 investors, many of whom were members of church communities on Queensland’s Sunshine Coast.

Both schemes have since been wound up.

Other cases in the running for the PITS awards was the Comcash superannuation scheme that was allowing people to set up a self-managed super fund offshore, a variation on the Nigerian letter scam using a Senegalese moritician who had inherited a sum of money from a priest she used to work with and a scheme purporting to supply gas meters to Chinese gas customers.

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