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Harsher penalties for pyramid schemes

By George Psyllides

PARLIAMENT is looking to introduce stricter penalties for people participating in pyramid schemes, MPs said on Wednesday.

Beyond the fines and custodial sentences, agreements done as part of a pyramid scheme would be considered void, acting chairman of the House Legal committee Rikkos Mappourides said.

Mappourides, a DISY MP, said the law concerned companies or individuals who devise investment schemes based on a hierarchical setup.

Anyone doing so would face criminal charges, he said.

The entire pyramid structure — individuals who organise, participate, and encourage others — will be held accountable, Mappourides said.

The MP said further development of pyramid schemes must be stopped because a lot of money has been lost.

“We do not want to reach Albania’s level,” he said, adding that police should not let it reach 30 to 40 people.

According to an International Monetary Fund report, the scale of Albania’s pyramid schemes in 1996-1997 relative to the size of the economy was unprecedented.

The social consequences of their collapse were profound, the report said.

At their peak, the nominal value of their liabilities amounted to almost half of Albania’s GDP. About two-thirds of the population invested in them and when they collapsed “there was uncontained rioting, the government fell, and the country descended into anarchy and a near civil war in which some 2,000 people were killed.”

AKEL MP Aristos Damianou said that both the masterminds and people who encouraged others to enter the scheme would face justice.



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