This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/world/2015/jul/07/chile-france-magic-cheese-scam-three-years-jail

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Frenchwoman behind Chile 'magic cheese' scam jailed for three years Frenchwoman behind Chile 'magic cheese' scam jailed for three years
(34 minutes later)
A French court has jailed a woman for three years for conning thousands of Chileans into buying a kit to make “magic cheese” they could sell back to French cosmetics firms for use in luxury beauty products.A French court has jailed a woman for three years for conning thousands of Chileans into buying a kit to make “magic cheese” they could sell back to French cosmetics firms for use in luxury beauty products.
Related: French woman ​on trial for conning thousands with 'magic cheese' scamRelated: French woman ​on trial for conning thousands with 'magic cheese' scam
Gilberte Van Erpe, 74, was given a six-year prison sentence – three years suspended – and a 250,000-euro ($270,000) fine for her scam in which she told victims the product they could make at home was a prized ingredient used in creams favoured by celebrities such as Michael Jackson. Gilberte Van Erpe, 74, was given a six-year prison sentence – three years suspended – and a €250,000 ($270,000) fine for her scam in which she told victims the product they could make at home was a prized ingredient used in creams favoured by celebrities such as Michael Jackson.
But the goop was worthless and the scam became one of the biggest pyramid schemes ever seen in South America.But the goop was worthless and the scam became one of the biggest pyramid schemes ever seen in South America.
The “case of the magic cheese”, as it is known in France, began in 2005 when the businesswoman dubbed “Madame Gil” held conferences around Chile urging people to become home producers of the fermented product.The “case of the magic cheese”, as it is known in France, began in 2005 when the businesswoman dubbed “Madame Gil” held conferences around Chile urging people to become home producers of the fermented product.
Her company, Fermex Chile, had some 20 branches around Chile. Her company, Fermex Chile, had about 20 branches around Chile.
For 369 euros, investors could buy a kit containing filters and a special powder which when mixed with milk and fermented, produced a small cheese pat they were told was highly sought after by the cosmetics industry. For €369, investors could buy a kit containing filters and a special powder which when mixed with milk and fermented, produced a small cheese pat they were told was highly sought after by the cosmetics industry.
Fermex promised that companies like French cosmetics giant L’Oreal would snap up the cheese for use in whitening creams and other products. Fermex promised that companies such as French cosmetics giant L’Oreal would snap up the cheese for use in whitening creams and other products.
That is, after they were sold to a company in Congo-Brazzaville which would sell them on to France.That is, after they were sold to a company in Congo-Brazzaville which would sell them on to France.
Victims were told they could double their initial investment in four months.Victims were told they could double their initial investment in four months.
To entice the first victims, the kits were given away for free, and people were paid for their first batches of exported “magic cheese”, convincing them to reinvest their earnings.To entice the first victims, the kits were given away for free, and people were paid for their first batches of exported “magic cheese”, convincing them to reinvest their earnings.
The success of the business initiative spread rapidly and a Chilean investigation showed some 5,500 people were ensnared. The success of the business initiative spread rapidly and a Chilean investigation showed 5,500 people were ensnared.
Many families mortgaged their houses or became heavily indebted to invest in the pyramid scheme, which raked in 14.5m euros for the alleged scammers. Many families mortgaged their houses or became heavily indebted to invest in the pyramid scheme, which raked in €14.5m for the alleged scammers.
Like most pyramid schemes the scam relied on rapid growth, with initial investors telling their friends, neighbours and family about its profitability and getting them to join.Like most pyramid schemes the scam relied on rapid growth, with initial investors telling their friends, neighbours and family about its profitability and getting them to join.
Victims were spurred to sign up friends and family with the promise of gifts and reward money.Victims were spurred to sign up friends and family with the promise of gifts and reward money.
One person received a cheque of 100m pesos (140,000 euros, $155,000) for their recruitment skills that turned out to be fake, investigations showed. One person received a cheque of 100m pesos (€140,000, $155,000) for their recruitment skills that turned out to be fake, investigations showed.
As for the “magic cheese”, it never even left the country and a Chilean journalist later found tonnes of it rotting in a warehouse.As for the “magic cheese”, it never even left the country and a Chilean journalist later found tonnes of it rotting in a warehouse.
The scam collapsed in July 2006 and Van Erpe was arrested in the French Riviera city of Nice in 2008, but it was not possible to extradite her.The scam collapsed in July 2006 and Van Erpe was arrested in the French Riviera city of Nice in 2008, but it was not possible to extradite her.
Chilean authorities thus pursued her in France where she was tried alongside three alleged accomplices, two of whom received jail time and stiff fines while the third was let off.Chilean authorities thus pursued her in France where she was tried alongside three alleged accomplices, two of whom received jail time and stiff fines while the third was let off.
Van Erpe had allegedly used the same scheme to trick thousands of Peruvians a few years earlier.Van Erpe had allegedly used the same scheme to trick thousands of Peruvians a few years earlier.