Pyramid scheme operators face five years in jail

ENTERPRISE minister Micheál Martin will today announce prison sentences of up to five years for anyone establishing or operating rip-off pyramid schemes.

The minister is expected to make the announcement on the get rich quick schemes as part of a new consumer protection bill.

The bill includes 30 offences against consumers involving unfair commercial practices including prize draw scams and making false claims about products or services.

Those found guilty of any of the offences, apart from the pyramid schemes, face fines of between €3,000 and €100,000 as well as prison sentences of up to two years.

However, while the bill is aimed at tackling all aspects of consumer protection, it is clear from the more severe prison terms that Mr Martin is specifically trying to clamp down on the pyramid scams which make up to €20 million from small investors.

West Cork was one of Ireland’s major hotspots for the Liberty and Speedball schemes with members of the public investing up to €10,000 each with the promise they would receive €80,000 if they travelled to Germany to collect their profits.

Many did enjoy a financial windfall, but hundreds lost the money invested.

In preparing the bill which will be announced today, Mr Martin received a joint submission from gardaí in West Cork and elsewhere in the country on what they had found in their investigations of the schemes.

Officers told the minister just how much they were hampered by not being able to search premises, make arrests or detain people for questioning in relation to pyramid schemes under the Pyramid Selling Act 1980.

All those powers are expected to be conferred on officers in the new legislation being unveiled today.

Investigations into several of the schemes run in West Cork are still continuing. Files have already been sent to the Director of Public Prosecutions on incidents in Bantry and a file is currently being completed by gardaí in Clonakilty where a woman who ran a scheme was allegedly threatened by angry investors.

Labour TD Kathleen Lynch, who earlier this year put forward a private members bill in the Dáil to outlaw pyramid schemes has welcomed the fact they are being clamped down on but added that her party made the call very early in the summer for immediate action to be taken.

“I know there has been a huge number of people affected by the schemes since then,” she said.