MONEY CIRCULATION SCAM SHUT DOWN BY DTI

5 Oct 2005 03:15 PM

A Birmingham money scheme that preyed on the religious sensitivities of its recruits has been wound up after a DTI investigation.

The scheme known as Galaxy Lifestyles International told potential investors they would receive discounts on their shopping and misled them into believing they could make up to £91,000 by recruiting a new member every 10 months.

The scheme was run by Elaine Douglas from Edgbaston who targeted people through their religious beliefs and charged them membership of £1,700 (plus VAT) for ten years. Over 3,500 people invested in the scheme.

In appointing the Official Receiver, Mr Justice Pumfrey agreed with the investigator's findings that the scheme was being sold to members of the public on a false and deceptive basis. He said that:

"The methods used to recruit new members were less than honest, excessively hard selling and the whole scheme is a demonstration of half truths and exaggerations at the expense of those people who joined the scheme, some of whom borrowed or pawned the money to enable them to do so."

The grounds for the winding up were that it operated a membership scheme that was both unlawful (being in breach of section 120 of the Fair Trading Act 1973, as amended) and inherently objectionable.

On the application of the Secretary of State the Court appointed the Official Receiver as provisional liquidator of the company on 25 August 2005 pending the hearing of the winding up petition. The application was opposed by the company.

The petition was duly heard on 21 September 2005 and the company was ordered into compulsory liquidation by Mr Registrar Rawson.

Notes for Editors

1. The registered office of the company is Unadkat & Co, Chartered Accountants, 12 The Wharf, Bridge Street, Birmingham, West Midlands B1 2JS. The directors of the company are Ms Elaine Douglas and Mr Nollis Campbell. Ms Douglas is also the secretary of the company.

2. The petition was presented under Section 124A of the Insolvency Act 1986.

3. The role of the Official Receiver as provisional liquidator was to protect and preserve the assets and financial records of the company. By virtue of the winding up order the Official Receiver is the liquidator of the company.

4. The petition to wind up GLI (Galaxy Lifestyles) Limited in the public interest was presented on 25 July 2005 following an investigation carried out by the Department's Companies Investigation Branch (CIB) under section 447 of the Companies Act 1985.

5. All public enquiries concerning the affairs of the company should be made to:

THE OFFICIAL RECEIVER
Public Interest Unit
21 Bloomsbury Street
London WC1B 3SS

Further information on the work of CIB is available from http://www.dti.gov.uk/cld/comp_inv.htm

Department of Trade and Industry

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Public Enquiries +44 (0)20 7215 5000
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www.dti.gov.uk