Hundreds of Aucklanders, mainly from the Tuvaluan community, have been targeted by a murky get-rich-quick scheme.
The Financial Markets Authority is warning it has all the hallmarks of a scam and the Commerce Commission is considering launching an investigation.
Photos of bundles of cash or payouts from the scheme have been openly splashed across Facebook to lure people in.
The concept is simple, according to those posting, with captions such as: "Invest $500 to get $5000 in four weeks."
Another wrote: "This is a great opportunity, it's not a scam so get in quick $500 into $5000."
In most instances, participants say the cash is paid out - but there are concerns over legalities.
Tuvalu community leader and E tū Union representative Fala Haulangi is one of those concerned.
"Any money that our community receives - wow, I'm all for it. Good, you know. But my concern is that, is it legal?" he said.
"I'm just worried about my people, that's all."
All Facebook posts refer to EP Entertainment as the company behind the scheme.
They also thank and tag two men linked to the business, Vinson Schuster and Niko Kilo. Newshub couldn't reach either of them.
No one was at the registered address for the company, or at another address linked to another of Schuster's enterprises.
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Haulangi says Schuster's helped the community in the past by sponsoring various events, but this scheme is concerning.
"You have to wait three or four weeks and then you get your five grand. Paid in cash."
Financial Markets Authority general counsel Liam Mason says the scheme sounds too good to be true.
"It really does sound like a scam because there is no magic way to make money out of nothing and that's essentially what a scheme like this is promising to do for you."
The Commerce Commission told Newshub it has received three complaints about EP Entertainment Ltd and those complaints are currently being assessed.
It also issued a warning about illegal pyramid schemes, saying they have two key elements.
Those elements include:
- receiving a profit requires participants to recruit other people to pay into the scheme
- profit depends on continued recruitment, not sales of a product or service.
The exact nature of the $500 investment is unknown and Newshub understands those willing to part with the cash are not required to sign any paperwork.
Mason says this is cause for suspicion.
"If there's no documentation, if it's not a licenced or registered provider. That's something to be really wary of."
He says participants could end up facing legal action.
"If you are recruited into a scheme that involves you going and recruiting others it is possible you could end up being a party to this down the track when it unravels and get in trouble yourself."
Not paying tax on any returns is also illegal.
