Police swoop on sales swindle

Press, 22 October 1986, Page 12

Police swoop on sales swindle

NZPA-AFP ROME Thirty-three people have been arrested in connection with a huge swindle involving almost 11,000 door-to-door sales agents throughout Italy and masterminded by four West Germans who are still being sought by police, investigators said. The door-to-door sellers, mostly unemployed youths, were duped by a company called the Gem Collection, which, unknown to them, was already outlawed in West Germany and being probed in Britain, France and Austria.

The firm began operations in Italy in 1984, hiring people to sell at very high prices poorquality cosmetics, clothes and other goods made in West Germany. In two years, Gem took in 70 billon lire ($lO million). The agents were asked to pay 3.5 million lire ($5280) as a “hiring fee”

and another 3.5 million lire to buy the products they would have to sell. The funds were made available as bank loans, through contacts of the firm working for a credit institution. * Once they realised they would not be able to make the money back on sales, the agents turned to hiring other people to do the job, at a commission of 400,000 lire ($565) per person. The further a person rose in the chain, the more commission he or she received. ■' Among those arrested was a former police officer who managed to take in some 30 million lire ($42,660) a month, police said. . . Gem’s founders — Peter Fleim, aged 38, Rolf Karl Himmelstosz, aged 35, Fred Unrath, aged 41, and Walter Madler, aged 37 — have fled, taking a substantial sum with them.