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“As a result of our approach to the company to have these claims substantiated the product has been withdrawn from outlets in Western Australia.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