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A network marketing company distributing emeralds has a Somali man in Ottawa concerned that recent immigrants are being taken by what he calls a pyramid scheme.
Treasure Traders International is a Toronto-based company claiming to be the largest emerald distributor in Canada. It started operations in the fall of 2003, and expanded to Ottawa last month.
- RELATED INTERVIEW: CBC Radio reporter Karina Roman talks to Ottawa Morning's Anthony Germain about why people have concerns about the motives begind the emerald-marketing company's promises (Runs 7:30)
Immigrants seem to make up a large portion of the new recruits.
The company claims people can make 500 per cent on their investment in less than three weeks.
A member of Ottawa's Somali community, who has asked his real name not be used for fear of repercussions, said he's concerned about his community's involvement.
"It's a vulnerable community. This community is new and they're not aware of this kind of scheme," he said.
To attend a recruitment meeting you pay $20 for a sales kit, which makes you an distributor of emeralds. You are then eligible for a discount off wholesale priced emeralds.
But the real money is made by playing a "treasure hunt" game, to travel from "poverty port" to the "treasure chest" you pay a deposit on a pack of emeralds to become a "crew member" on a ship.
- AUDIO: CBC reporter Karina Roman looks at the Treasure Traders operation, Ottawa Morning, host Anthony Germain
[Runs 7:20]
The aim is to become captain, which requires the recruitment of 31 other people who pay more than $1,000 each.
As captain, you collect fees from new crew members, keeping more then two-thirds for yourself. The rest goes to the company.
When you cash out, you've paid $1,800 and you've received $7,000 in cash and $5,000 worth of emeralds.
Treasure Traders' CEO and founder Allan Kippax insists his company is no scheme. The self-described marketing genius says it is a pyramid, but it's not an illegal pyramid.
"Network marketing is legitimate," said Kippax. "And people have taken a negative stance. However, network marketing produces more millionaires than every other business combined every year."
Whether that money is being made legally is up to the Competition Bureau.
- RELATED LINK: Multi-level marketing and the Competition Act, Government of Canada. "Set Two" outlines the differences between legal and illegal operations
The bureau said it's aware of the company, but did not say if it's under investigation.
Treasure Traders International is now operating in Ottawa, Peterborough, Cambridge, Whitby, Oshawa, Toronto, and Vancouver.
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