By Sue-Ann Wayow
IN an attempt to discourage financial pyramid or “Ponzi” schemes in Trinidad and Tobago, the Government is proposing to impose a fine of $10 million and imprisonment for ten years for anyone who establishes such a scheme.
Finance Minister Colm Imbert on Tuesday, in the House of Representatives, piloted a bill which once passed will also allow for a fine of $5 million and imprisonment for five years for anyone who participates in such a scheme.
Imbert gave details on Finance Bill No 2, which proposes harsh penalties for persons who operate, participate or advertise Ponzi, pyramid schemes, defined as “prohibited schemes”.
Under the bill, “prohibited scheme” means “a business structured in such a way that the returns an investor or client earns is directly tied to the number of persons he recruits to join the scheme.”
He stated that currently, there was no specific legislation to deal with transactions of that nature.
Imbert said, “And some of these operators are quite clever and are fairly familiar with the grey areas in the law and therefore have attempted to get around the areas of the law with their Ponzi schemes and pyramid schemes.”
He said Clauses 3 and 13 of the Finance Act should address the criminalisation of these schemes under the Proceeds of Crime and Securities Acts.
He also emphasised that the traditional way of saving money, the sou sou, was not prohibited but there were serious concerns about the operations of well-organised money laundering schemes under the guise of a pyramid scheme.
Referring to reports in September 2020, the Finance Minister said, “The allegations were so serious that the matter quickly gained the national spotlight and created dialogue on the existence of Ponzi, pyramid and other schemes operating in parallel to what is known in local parlance as the sou sou which is a legitimate operation, where persons contribute to a ‘hand’ and wait their turn for their ‘hand’.”
