The State Police (SP) has initiated two criminal proceedings after an application was received from the Finance and Capital Market Commission (FCMC) about possible illegal actions in relation to the MMM-2011 financial pyramid.

The Administration of Riga region SP initiated two criminal proceedings in relation to MMM-2011 on July 3. These criminal proceedings are qualified by Part 1 of Section 207 of the Criminal Law. It provides for criminal responsibility for engaging in entrepreneurial activities without registration or without a special permit (license). An applicable sentence is deprivation of liberty for a term up to five years or confiscation of property, or community service, or a fine up to one hundred and fifty minimal monthly wages with or without deprivation of the right to engage in entrepreneurial activity for a term not exceeding three years, the police reports.

Both criminal proceedings were initiated after receiving applications from the FCMC. These applications state that specific individuals that are determined in the criminal proceedings are involved in the MMM-2011 financial pyramid and are illegally attracting depositors, in accordance with that, these individuals are, possibly, are engaged in entrepreneurial activities without a license for a second time within one year. In relation to these individuals the State Revenue Service already had decisions on initiating administrative proceeding for engaging in entrepreneurial activities without a license in accordance with Article 166.2 of Latvian Administrative Violations Code. Right now, pre-court investigations are progressing on both criminal proceedings to determine all the details, FCMC reports.

Deputy Chairman of FCMC Janis Brazovskis says: «Deposits are legally allowed to be attracted only with a state licence and under supervision of market participants, thereby ensuring protection of client interests. Unlicensed commercial activity, receiving deposits or attracting deposits, is punishable. At the same time, there are dishonest individual and groups of individuals that use misleading methods to circumvent the law, such as organizing various seminars and providing financial advice, trying to raise funds.»

The SP and the FCMC are asking people that have any kind of information about any person that offers financial services, for example, attracts depositors and their money without a license or permit, to inform the police.

FCMC invites everyone to act responsibly with the management of their own money and not rely on disproportionate and rapid return schemes, even if the offer comes from an acquaintance or could provide seemingly convincing evidence of a quick profit. Legal persons and individuals are allowed to offer and provide deposit and investment services only if they have a license.

Ref: 102.109.109.2545