Trial ordered on fraud charges

Press, Volume CXIV, Issue 33577, 4 July 1974, Page 16

Trial ordered on fraud charges

(New Zealand Press Aaaociattoni

WELLINGTON, July 3

Two company directors, Barry William Ferguson and Beverley Diane Ferguson, and Combined Community Marketing, Ltd, of St Andrews Square, Christchurch, were each committed by Mr M. F. Hobbs, S.M., today on a charge of conspiring to defraud.

They pleaded not guilty in the Wellington Magistrate’s Court to a charge under the Crimes Act of conspiring with each other to defraud Thomas Walter Deardon of $2965. Mr Deardon was represented by Mr B. R. W. Gray and Mr G. W. Calver; Mr B. W. McClelland and Mr D. H. Stringer appeared for the defendants.

Richard John Smithies, director of the Consumers' Institute, a witness called by the informant, said that on January 31 he spoke to Barry Ferguson at the office of the institute.

POSIPOW DISCUSSED The purpose of the meeting was to clarify for Consumers’ Institute details of Ferguson’s activities. The meeting took about 2| hours. The structure of Combined Community Marketing and Posipow International was discussed. , .

“We were particularly interested in the number of investors and amounts of money invested in the company on the one hand, and in the kind of product sold to the public on the other." Mr Smithies said Ferguson had described the courses—much of their substance came from books he Ijad read. “We were told that about 50 courses of instruction had been sold to the public. And this should, of course, be distinguished from any other figure that might be given for sales of courses to investors for resale to the public.” Mr Smithies had described the “chain-lettering” effect of pyramid selling, and Ferguson had said that he expected to gross s2m In two years from the sale of $24 courses to the public.

VIEW ON ADVISERS Ferguson had been asked why, if his scheme was such a good one, did he sell it only or almost exclusively to less well-educated people. Why did he not sell the course to businessmen? “He said that businessmen

would not approve of it," Mr Smithies said. Consumers’ Institute would always advise ordinary people before they invested in this company, or any venture, to get the advice of their solicitor, banker or stockbroker.

Asked if Ferguson had commented on this, Mr Smithies said: “Yes, he scoffed at this, and in particular the suggestion of going to one’s bank manager. Speaking generally of people getting in touch with such advisers, he said, 'They will advise you not to touch us.’ He said this was because such advisers are afraid to try new ideas.’ ’