Harsh penalties for pyramid scheme thugs

The Director of Public Prosecutions is prosecuting 35 directors of various pyramid schemes in some five cases in court.

The Bill also outlines characteristics that define a pyramid scheme.

It states to participate in the scheme a new participant must provide a financial or non-financial benefit.

Further the making of the participation payment is entirely or substantially induced by the prospect held out to the new participant that they will be entitled to a financial or non-financial benefit.

Finally, the recruitment payment is entirely or substantially derived from the introduction to the scheme of a further new participant.

It provides that a scheme may be a pyramid scheme regardless of who holds out to a new participant the prospect of entitlement to a recruitment payment.

It is also deemed a pyramid scheme irrespective of who is to make a recruitment payment to a new participant and who is to introduce a further new participant to the scheme.

The draft law provides the consideration by the court when determining whether a participation payment under a scheme involving the marketing of goods or services is entirely or substantially induced by the prospect held out to a new participant of entitlement to a recruitment payment.

The Bill is to take effect on such date as may be appointed by the Cabinet Secretary by notice in the Gazette.

Presidential assent

To ensure authorities do not put it on ice, the Bill provides that such date shall not be later than three months from the date the President assents to the Act.

The report named key directors of these schemes and identifies some properties and assets derived from theft.