Law ‘error’ may protect pyramid scheme planners

A SIGNIFICANT oversight in laws established to prosecute the operators of the notorious pyramid schemes has made it impossible to secure convictions, the Labour party claimed yesterday.

A section of the Consumer Protection Act meant those operating the controversial pyramid or “gifting” schemes, faced a fine of up to €150,000 and/or imprisonment for up to five years.

In 2006, pyramid schemes cost investors €20 million in west Cork alone.

Now, the Labour party’s consumer affairs spokes-man, Brendan Ryan, has taken legal advice on the drafting of the act and has been told a serious drafting error exists.

That error has rendered the key section governing pyramid schemes, misleading commercial practices, aggressive commercial practices and contravening maximum prices orders, unworkable.

Mr Ryan said the flaw also prevented any prosecution from being taken under the act.

“Section 83 of the act says that ‘if a person is indicted for an offence under this act, the District Court may try the person summarily...’,” said Mr Ryan. “This is a form of words that is not used in any other act on the Irish Statute Book and suggests that whoever drafted the section may not have been very familiar with Irish law.

“The effect of this section as drafted is that a person would have to be the subject of an indictment, which can only happen after the case has left the District Court and gone to a higher court. Thus the idea that, after an indictment, the District Court could try the case [and not send it forward] is contradictory and inoperable.”

He said the section should have referred to a person being “charged” rather than “indicted” because a person cannot be “indicted” in the District Court.

“The implications of the error are that certain key consumer protection offences cannot now be validly prosecuted in the District Court,” he said.

Mr Ryan said the drafting flaw is fatal to the prosecution of the pyramid scheme offence in the District Court under the Consumer Protection Act, and would also appear to prevent the prosecution in the District Court of a number of other offences.

A spokeswoman for the National Consumer Agency said any flaw in the legislation was a matter for the Department of Enterprise Trade and Employment.

The department said the legislation had not been tested yet and the opinion of the Labour senator was only his opinion.