Net closes on €12m pyramid scheme

GARDAÍ have asked the Director of Public Prosecutions to examine the legality of a pyramid scheme into which millions of euro has been invested.

The Revenue Commissioners also confirmed that officers have the power to investigate the movement of money in and out of the State by those involved in the scam, which has spread to Cork, Kerry, Limerick and Clare and involves thousands of investors. Gardaí estimate up to €12 million has been invested.

If the DPP decides the scheme contravenes the Pyramid Selling Act 1980, prosecutions of those involved in canvassing others to join may follow. Gardaí said that as yet no names of individuals involved in the scheme had been forwarded to the DPP, but it is understood a full file is being prepared, pending the DPP’s advice.

Investors in the Liberty scheme require at least €5,000 to take part. They must also introduce two others to the scheme. They are offered an eight-fold return on their investment.

Participants hand over money in Germany because of its liberal tax laws. However, gardaí say anyone who does not declare money on returning to Ireland can be prosecuted for money laundering. They are also subject to Capital Gains Tax.

The scheme depends on an increasing number of investors, which increases the numbers who will lose out when it eventually collapses.

Gardaí are warning the collapse of Liberty could lead to assaults and criminal damage to property.

Detective Sergeant Eddie Fogarty said: “Money brings out the worst in people. If the scheme collapses it could have the knock-on effect of people resorting to violence.”

Already, there have been reports of tension at meetings to promote the scheme in Cork city. Last week at the Sunset Ridge Hotel just outside the city, there were angry exchanges when people who showed up uninvited were turned away. Invitations are necessary to attend these briefings. Up to 600 people gathered at the hotel, and similar numbers have attended briefings in the Vienna Woods Hotel.

Gardaí’s hands are tied unless someone makes a formal complaint in relation to the Liberty scheme.

Opposition parties have criticised the Government for failing to tighten pyramid selling legislation. This covers trading in goods or services, but not “gifting” schemes. Labour TD Mary Upton said since her party attempted to introduce the Pyramid Schemes Bill 2001, no progress had been made.

“There is nothing to stop people gathering in their kitchen and putting a couple of thousand in a jam-jar to hand over to whomever.”

Enterprise Minister Micheál Martin said the Government plans to improve consumer protection under the Unfair Commercial Practices Directive, EU legislation which is to be transposed into Irish law.