New Zealand’s Commerce Commission has issued an official warning against two Validus promoters.

The NZCC operates as New Zealand’s FTC equivalent.

In addition to the Financial Markets Authority’s investigation, which led to Validus being banned nation-wide last July, the NZCC opened up its own Validus investigation in late 2022.

As reported by NBR on March 14th, the NZCC concluded its investigation into Validus last December. At the time the NZCC’s findings were not made public.

Seeking answers, NBR filed a request through New Zealand’s Official Information Act.

Documents released to NBR earlier this week revealed

the Commission “strongly suspects” Validus was a pyramid scheme because it rewarded members for recruiting others to join, but it could not “categorically” prove it was.

Although not clarified, I’d have to assume NZCC couldn’t clear the regulatory bar on Validus being a pyramid scheme due to not having access to its backend data.

Personally I’d argue that Validus having no retail offering is more than enough to confirm the existence of an MLM pyramid scheme.

NBR also learned that NZCC’s investigation focused in on local Validus promoters Davina Maasi and Mohammed Shaziz “Shamir” Khan.

Together, Maasi and Khan “held more than 20 in-person [Validus] events in 2022.”

As part of their investigation, NZCC invited Maasi and Khan for a voluntary interview to discuss Validus in March 2023. Neither accepted the request.

Whether it was because the FMA had already acted or otherwise, by their own admission NZCC seems a bit useless against MLM scams.

When considering what enforcement approach to take, the regulator said schemes like Validus had the the potential to cause significant harm, but it was not in a position to prove that harm occurred and if so, to what extent.

That’s not a good look for an FTC equivalent regulator in any country.

Noting that Validus was no longer being promoted in New Zealand as of mid 2023, NZCC concluded “the risk presented to New Zealand consumers through the promotion of Validus and the promoters is currently low.”

The regulator sent out largely identical “compliance advice letters” to both Maasi and Khan, which it said would be “educative”.

It included evidence of their active promotion of Validus, such as screenshots of social media posts and videos from events where they either hosted promoters from abroad or pitched Validus to those who were in attendance.

The letter warned them that breaches of the Act could result in fines of up to $200,000.

NBR notes Shamir Khan got involved in Validus after his architectural services business collapsed owing $229,000.

The last Validus post Khan made on social media is dated February 16th, 2023.

Davina Maasi came over from the collapsed EvoRich Ponzi scheme.

Following his arrest in April 2022, EvoRich founder Andrey Khovratov was sentenced to five years in prison in January 2024.

Neither Khan or Maasi responded to NBR’s request for comment.