PRESS digest

"11.5 for 6"
By Marián Leško


The bosses of pyramid schemes BMG Invest and Horizont Slovakia did business fraudulently in Slovakia for six years. After spending almost five years in preventive custody, they were sentenced on January 10 to 11.5 years in jail. Given that the Supreme Court until now has always confirmed sentences issued by the Special Court for organized crime, we can already say that the jail terms are high. However, the damage caused due to the fact that these men were allowed to promote their business by heavy advertising for so long is much higher.

The Special Court justices agreed with the prosecution that the three accused committed a crime by collecting money from clients and using it to pay other clients their non-existent profits on their 'investments', because no profits were ever made. Given that they pretended something that had no basis in reality, and thereby caused damage to others while enriching themselves, they committed fraud, for which they were duly punished.

However, there are few grounds for satisfaction in this case, either among people who lost money, or among those who in general expect the state to act quickly and decisively against fraud. In this case the state only acted when it was no longer possible not to act, i.e. when the pyramid schemes began to collapse. At the same time, the fraudulent behaviour for which the bosses of the pyramid schemes were arrested and sentenced was known and ignored for a long time. The tax authorities, for instance, were well aware that "the money raised from clients was being used mainly to pay off previous claims as well as to support an advertising campaign to gain further clients".

Vladimír Fruni himself, in interviews with the Trend weekly in 1999, repeatedly admitted that "the company is also paying its clients from fresh deposits". Despite that, he was allowed to do business in peace for another three years. His sentencing now cannot hide an ugly fact: The state administration for six years allowed him to do things for which on January 10 he received 11.5 years in jail.


Sme, January 11

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