New Zealand’s Miracle Cure Peddler and “The Most Spectacular Fraud in Australian History”

By Richard Smith

Our Australian readers may already be familiar with the story of Firepower International. There’s a book out about it, by Gerard Ryle, an investigative reporter at the Sydney Morning Herald; it’s called Firepower: The Most Spectacular Fraud in Australian History. Here’s the blurb, with typos fixed:

A magic pill that cuts fuel consumption and reduces emissions……that was the miracle promised by Tim Johnston’s company, Firepower. Everyone believed him; prime ministers and presidents, doctors and diplomats, business leaders and sporting heroes – even ASIC the corporate watchdog – went along with the myth. Millions of shares were sold to investors, and by 2007, Firepower had become the biggest sporting sponsor in the country. But it was all a sham. In this compelling account, Gerard Ryle demolishes the fairytale, exposing a wobbly financial pyramid and the greatest fraud ever committed in Australia.

You can read a bit more about Firepower at Wikipedia. The amount of money that went for a walk is, by the standards of jaded NC readers at any rate, peanuts, at just AUD100Mn, mostly extracted from Australian private investors. What’s more impressive is the level of official capture that Firepower pulled off: right up to the Australian Prime Minister, John Howard. Oops. Subsidies, grants and, just as handy for your share-kiting scheme, celebrity tie-ups flowed. Yes, that really is the Russell Crowe. Oops again.

Naturally, the Firepower Pill didn’t work:

More recently Consumer Protection has been investigating claims made by Firepower about the Firepower Pill. The Commissioner said the investigation so far had raised some real concerns about the validity of claims made on the packaging of that Firepower made in support of the fuel saving and emission reducing properties of the Firepower Pill.

Product packaging claimed it ‘reduces emissions’, ‘saves on fuel’ and ‘improves fuel economy’.

“As a result of our approach to the company to have these claims substantiated the product has been withdrawn from outlets in Western Australia.

No fraud charges were brought against Tim Johnston, Firepower CEO, much to the disgust of commentators:

It is difficult to exaggerate the scale of the lies, the extent of the damage, the trail of destructive bastardry left behind by Timothy Francis Johnston, who lied to everyone, cheated everyone, and, as you read this, lives in luxury overseas because the Australian authorities are too stupid to charge him with fraud and thus be able to seek his extradition.

Two years later, various authorities are still picking over the mess; and there are still no fraud charges, though there is a private law suit.

So there you have it: a fraudulent Australian company peddling a bogus miracle product while garnering official Government support. And then it collapses, and there’s fallout all over the place.

The similarity with New Image International, last spotted at this blog landing an endorsement from Dr Wayne Mapp, New Zealand Minister of Science (hah), for its bogus colostrum miracle cure, might be enough, all by itself, to cause even the overconfident Dr Mapp a moment’s glimmer of concern.

But if not, there’s more…

Because, you see, New Image is also selling, via its Malaysian subsidiary, and with the help of the same sort of bullshit testimonials that we saw with its colostrum quack cure, a bogus miracle fuel economy enhancer called Power Pill Fe-3. And how do I know it’s bogus? Well, look what it is:

Claims for the Firepower Pill seem remarkably similar to websites around the world that market another product – a product called the Power Pill FE-3.

The Power Pill FE-3 is sold in 70 countries, the websites say, and makes the same claim – that it was tested in Singapore, Hong Kong, Germany and Northern Ireland. It too is said to improve fuel economy, save on maintenance, and be environmentally friendly.

The Power Pill FE-3 is sold by a multi-level marketing company, New Image International, which is listed on the New Zealand stock exchange and mainly deals in health products. Multi-level marketing has been unfairly compared with pyramid selling, but forms of it are used by heavyweights such as Amway and Avon.

New Image claims to have bought the formulation for its Power Pill FE-3 12 years ago from NASA. New Image said it contracts the manufacturing of the pills from a company in the US called US Lubricants, and the pills are packaged for different markets.

In Australia, for instance, the pills are sold as the Power Pill FE-3 through New Image’s Australian subsidiary, another Perth company called Omegatrend.

“Basically Firepower purchase from us,” said New Image’s company secretary, Bill Cunliffe. “The Firepower Pill or the Power Pill [are] one and the same thing. Exactly the same product.”

Five years after the Power Pill first caught the eye of Gerard Ryle, and three and a half years after the Western Australian Department of Commerce debunked the “miracle product” claims, and three years after Firepower went into liquidation, the New Zealand authorities are quite content for New Image to keep on hawking the same bogus fuel economy product. But only offshore: evidently there is less chance that they will have heard of Firepower up in Malaysia. Dumping products that are known to be bogus, on great big neighbouring economies, via multilevel marketing schemes, is certainly aggressively enterprising, but, in the longer term, it may not be the international trade development coup that the New Zealand government believes it to be.

After Firepower, the Sydney Morning Herald’s opinion guy had this to say:

Perhaps “inert” is the best word to describe the collective ineffectiveness of the Australian state and federal regulatory authorities which allowed Johnston to run rampant for the past 14 years, stealing at least $100 million in the process. Or bovine. Or lazy. Or complicit. Take your pick.

I wonder what epithets he’d choose for the New Zealand authorities, given the extra warning they have had, and ignored.

This really is going to get embarrassing.

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  1. dundee

    to to be fair those convicts were probably too busy stocking their barbies up with prawns am i fucken right???

  2. Hoi Polloi

    Fuel cutting additives, filters et al are probably nr.2 on the global scam/hoax list (nr.1 is the Nigerian connection). It’s amazing that there are still ppl who believe this crap, somehow I would think the money they lost is their own fault. Greed is a bad advisor.

  3. ambrit

    Mr Smith;
    Am I detecting a snidely sarcastic, or sarcastically snide, joy in pointing out that the New Zealand Emperors also have no clothes? This behaviour is too close to what has been happening in America lately to be truly funny. Are there any Australian laws available to prosecute local politicos for accepting contributions from ‘criminal enterprises?’ A fraud is definitely ‘criminal’ enough to pass the ‘smell test.’ Could the Hague be brought in? “Malaya Sues New Zealand for ‘Economic Assault’ in New Images Case.” They want a Global Economy? Let them accept Global Regulation along with it.

  4. Jess

    In all our travels we have noticed that Australians, who are wonderful people and a lot of fun to be around are
    however, the most gullible, shallow and innocent
    people. Moses David, the ‘Children of God’ was
    really big there.

    Also, the biggest con game of all time,
    Scientology has infected the minds and wallets of
    more Australians per capita than any other nations.

  5. Rodger Malcolm Mitchell

    Sounds amazingly like the U.S. federal government’s reaction to the massive U.S. bank fraud. First they endorsed it, then when it collapsed, they ignored it.

    Call it the Obama Firepower Bank. Oh wait. That’s Solyndra.

    Rodger Malcolm Mitchell

  6. John Carrigan

    How about the fraud in the US by using ethanol in gasoline.
    Think about how many small engines were ruined due to this fiasco. Chain saws, lawn trimmers, small lawn mowers, branch trimmers and on and on. The damage caused by this costly change only benefiting corn(pone) politicians must have cost US consumers billions in Tax subsidies and millions of carburator(?) replacements, repairs or scrapping of the equipment. Again socialism for the rich and capitalism for the rest of us!!!!

  7. Stelios Theoharidis

    There are a bunch of these fuel enhancement product MLM scams in the USA, I had to stop talking to a former friend because he continued to harass me about the amazing “opportunities” in some “nanotechnology” fuel enhancement product. As someone that researches cleantech I immediately knew it was snake oil the way they used nanotechnology terms just immediately gave away their ignorance. MLM is almost always a scam, when people have buy-in the cultish quality to their behavior becomes rather frightening.

  8. Ishmael

    As I have posted before, I worked in Western Australia for a year and I never ran into so much fraud in my life — that is until the last 14 years in the US.

  9. Foppe

    Hm.. If the Kiwis fail to respond, you might try to ping the Malay authorities about this; from what I know of the place they might take it a bit more seriously.
    Anyway, nice work (again).

  10. anonymous

    i can’t help but wonder if Australia’s draconian defamation laws have anything to do with this.

    one of the first online defamation suits was against Barron’s by a wonderful, lovely, australian man, Joseph Gutnick.

    if you came out and said ‘xyz is a scam’, what are the chances youd be sued for defamation? thus the silence?

  11. deeringothamnus

    Given the lack of transparency and rampant criminality, why does anybody buy a thing on a NZ, Candadian, or, for that matter, NYSE or NASDAQ exchange.? The cheap crooks are in NZ and Canada, the fancy ones are in New York.

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