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Court sentences managers of non-banking institutions

SLOVAKIA'S Special court passed sentence yesterday on Vladimír Fruni, František Matik, and Marián Šebeščák, the managers of the bankrupt pyramid schemes BMG Invest and Horizont, for cheating tens of thousands of clients out of their deposits.

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.

Fruni and Matik both received 11.5-year sentences, although the latter is currently hiding from justice abroad. Šebeščák, who cooperated with the court, received a milder sentence of only seven years.

On leaving the courtroom, Fruni said the case was part of the "Hitler-like agenda of a cleric-fascist state", according to the Hospodárske Noviny daily. In addition to the jail term, the court also ordered the forfeiture of Fruni's property.

Fruni and Šebeščák have been behind bars for nearly five years since the investigation of the mega-fraud began.

The ruling can still be appealed at the Supreme Court.

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