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Brought pyramid scheme to Samoa in 2006

APIA, Samoa (Samoa Observer, May 6, 2008) - The Samoan pastor and a partner jailed last month in New Zealand for conning local churches, are the same pair who attempted to defraud hundreds of people here two years ago.

Chief Executive Officer of the Ministry of Commerce Industry and Labour, Lemalu Samau Tate Simi, yesterday identified them as the same couple who started an illegal pyramid scheme in 2004 through a drink product called Xango.

Pastor Tafua Joel Lefaoseu, also known as Fuimaono Tafua Ioelu Lefaoseu, initiated his fraud scheme here in 2004, Lemalu said.

Lefaoseu and his partner Ema Fuatavai were found guilty of defrauding three churches in Auckland of more than NZ$1 million [US$783,350].

The fraud was reportedly carried out even after he was declared bankrupt and banned from running a business in 2002.

Lemalu said in early 2004, Lefaoseu came to Samoa and registered a new company called Samoa Xango Ltd, which almost immediately became engaged in the promotion and selling of the drink, Xango, using a method they referred to as "multi-level marketing."

They held public meetings at the HRPP Hall to sell the Xango scheme.

It quickly came to the attention of the Fair Trading Division of the Ministry of Commerce Industry and Labour.

After carrying out preliminary investigations the ministry sent Lefaoseu and Samoa Xango Limited a letter saying their Xango scheme was illegal and ordered them to stop or face prosecution.

The ministry decided the Xango scheme was in fact a scam known under the law as a "pyramid."

However, said Lemalu, "Lefaoseu cried foul and went, with many of his supporters in tow, to the Minister of Commerce, the Deputy Prime Minister, and anyone who would listen, to explain the legality of his operations and to claim that the government officials did not understand."

Tafua reportedly boasted that he had signed up more than 800 "members" under his Xango scheme, and plans were already in place for the suppliers to use Samoa as a "major distribution centre."

This meant that the Xango drink would have been imported to Samoa from the United States in pulp then bottled and packaged in Samoa for redistribution and re-export to other countries.

"But the Ministry held its ground," explained Lemalu, "and the suppliers of the Xango drink in the United States perhaps sensing the long arm of the law, decided to cease the supply of the product to Lefaoseu and company."

Lemalu said the Ministry decided not to proceed with any legal action since the scheme had effectively stopped.

"Members of the public who would have fallen victim to this fraud had been saved and prevented from suffering any loss," he said.

According to Lemalu, the Samoa Xango Limited is still on the Ministry’s books.

Some of its directors resigned and distanced themselves from the company when the issue of the illegal pyramid surfaced.

But with only two of its directors now left facing jail terms in New Zealand, the Ministry will be taking action to review the status of the company based on its level of compliance under the Companies Act.

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