Internet millionaire jailed over pyramid-selling scam

An internet conman is today behind bars after being found guilty of operating a series of online pyramid selling schemes.

An internet conman is today behind bars after being found guilty of operating a series of online pyramid selling schemes.

Lee McKenna was jailed for two years for masterminding the scam which tricked victims out of thousands of pounds over a number of years.

The 33-year-old, of Clairville Road, Middlesbrough, operated schemes promising significant earnings to customers – who paid a small fee to join – before being pressured to introduce others to the plot.

A joint investigation by the National Trading Standards Scambuster Team (North East) and Middlesbrough Council uncovered the four schemes – ‘Yournetbiz’, ‘substantial success’, the ‘Empower Network’ and ‘BigIdea Mastermind’ – and the tactics employed by McKenna to coerce people to join up.

Customers who signed up to the initial ‘boot camp’ were charged a small fee before bring presented with a number of training videos explaining how to set up a website and exploit social network marketing.

These videos indicated that the full potential could only be gained by those who signed up to an exclusive members’ area for a fee of £2,000, where full support would be given to establish an online business.

Filmed in a large mansion with a swimming pool – portrayed as McKenna’s home – the introductory videos were designed to deceive, conveying alleged wealth to mislead potential customers.

In another video McKenna had filmed himself viewing a large property on the Wynyard Estate, again attempting to show the wealth that could be shared with those who joined his scheme.

Despite McKenna’s claims in court that members of the scheme were able to access several more training videos and a number of niche products for online markets, in reality the only way to make the sums of money that were claimed was to recruit others to the scheme – in short, a pyramid scheme.

One witness stated that this became apparent when they were told to post pictures of a yacht to show their wealth and promote the amount of money they were making, lies which sent warning signs to the individual concerned.

Another witness said that they thought the business would involve multi-level marketing of a new product, but when they asked specifically about the product McKenna was evasive, sending them videos of expensive cars and jets to show the wealth that could be gained and stringing them along by saying the product would be revealed when they joined as a member.

Eventually, when pressed, McKenna admitted there was no product.

A third witness stated that the business appeared to comprise aggressive selling over the internet and Facebook.

Over three years, McKenna was known to have tricked victims out of at least £6,000, although the court heard the full extent of the deception would never be known.

He admitted five counts of fraud, and was found guilty on three others after a trial in September.

Sentencing McKenna to a total of two years at Teesside Crown Court yesterday (October 21), Recorder Sarah Dodd said he had operated a business ‘built on nothing but lies and deceit’ and had shown little remorse for his victims.

Middlesbrough Council Principal Trading Standards Officer Jim McCluskey said: “This business was a classic pyramid scheme which purported to be a unique business opportunity.

“The schemes usually work by offering a low price or free product, which is often described as a training or motivational video, on a selling or social network site.

“This is known as the ‘capture page’ or ‘squeeze page’, as the purpose is to build an email list of potential victims.

“Those victims are then bombarded with emails with promises of untold wealth by access to niche products to market or unique internet marketing opportunities for those who sign up for a further much larger fee.”

National Trading Standards Chair Lord Toby Harris said: “This pyramid scheme was operated with the sole intention of making money through deceit and dishonesty, which is why I am so pleased that this criminal has been brought to justice following the investigation by National Trading Standards and Middlesbrough Council.

“We urge members of the public to steer clear of these scams – if you are in any doubt whatsoever then do not get involved.”

Anyone who identifies a suspicious pyramid scheme or has fallen victim to one should report it to Action Fraud at www.actionfraud.police.uk or call 0300 123 2040.

Victims or groups of victims should consult a lawyer or other legal representative, including those at Citizens Advice, for help getting money back.