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Pyramid scheme bosses get 11.5 years

THE MEN behind Slovakia's bankrupt pyramid schemes BMG Invest and Horizont, Vladimír Fruni, František Matik, and Marián Šebeščák, have been sentenced to jail by the Special Court for organized crime for cheating tens of thousands of clients out of their deposits.

THE MEN behind Slovakia's bankrupt pyramid schemes BMG Invest and Horizont, Vladimír Fruni, František Matik, and Marián Šebeščák, have been sentenced to jail by the Special Court for organized crime for cheating tens of thousands of clients out of their deposits.

Fruni and Matik both received 11.5-year sentences on January 10, although the latter is currently a fugitive from justice abroad. Šebeščák, who cooperated with the court, received a milder sentence of only seven years. The rulings are subject to appeal at the Supreme Court.

BMG and Horizont promised up to 40 percent annual returns on depositors' investments. Earlier deposits were paid off with new deposits attracted by massive advertising campaigns. The pyramid schemes eventually collapsed in 2002 causing damages of around Sk14.4 billion to 123,204 clients.

On leaving the courtroom, Fruni said the case was part of the "Hitler-like agenda of the clerical-fascist state". In addition to the jail term, the court also ordered Fruni's property to be forfeited.

Fruni and Šebeščák have been behind bars for nearly five years since the investigation of the mega-fraud began, meaning that they will soon be eligible for parole, having served the required two-thirds of their sentences.

Meanwhile, Prime Minister Robert Fico confirmed the government's commitment to compensate the former clients of BMG Invest and Horizont.

He said a law providing compensation could be approved this year, in which case the compensation could be paid in 2008. However, Fico refused to specify exactly how much the government planned to spend on the payments.

"I don't like to talk about exact sums. We will definitely talk to the associations that represent the plaintiffs, but the figures themselves will depend on what the state budget can afford," Fico said at a press conference following a cabinet session on January 10.

He stressed that the compensation would only be partial. "We are considering the extent of the state's responsibility [for allowing the pyramid schemes to operate], as well as that of those people who decided to take a risk and give their money to companies that were definitely too risky," he said.


- Martina Juri

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