PARIS - A Frenchwoman went on trial Monday for allegedly conning thousands of Chileans into buying a kit to make "magic cheese" they could sell back to French cosmetics companies for use in luxury beauty products.
Gilberte Van Erpe, 74, allegedly told her victims the prized ingredient was even 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.
The "case of the magic cheese", as it is known in France, began in 2005 when the businesswoman dubbed "Madame Gil" began holding conferences around Chile urging people to become home producers of the fermented product.
For 369 euros (S$556) they could buy a kit containing filters and a special powder which when mixed with milk and fermented, produced a sort of cheese they were told was highly sought after by the cosmetics industry.
To entice the initial 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.
Many people mortgaged their houses or became heavily indebted to invest in the pyramid scheme, which raked in 14.5 million euros for the scammers.
The "magic cheese" never even left the country and was later found rotting in a Chilean warehouse.
The scam collapsed in July 2006 and Van Erpe was arrested in the southern French city of Nice in 2008, but it was not possible to extradite her.
Chilean authorities are thus pursuing her in France, where she is standing trial for two days alongside three alleged accomplices.