Iran busts 15 pyramid scheme firms

January 12, 2010 - 0:0

TEHRAN -- The Intelligence Ministry has announced that 15 companies involved in pyramid schemes have been identified and forced to discontinue operations in Iran over the past three months.

Major firms like Palinure, Inviting, Golden Village, FSG, and Griffin were some of the companies, an economic expert of the Intelligence Ministry told reporters on Monday.
Some of the directors of the Iranian branches of the firms have been arrested and will be brought to trial, the expert said.
He went on to say that network marketing differs from pyramid selling (pyramid schemes), explaining that the latter is a financial fraud and those who deal in this kind of business can be prosecuted based on a relevant law ratified in 2006 which imposes a ban on the activities of pyramid selling companies in Iran.
According to the law, everyone who cooperates with these companies is disrupting the economic system of Iran and is legally responsible, he stated.
“Everyone who is involved in this kind of business, with the intention of damaging the interests of the establishment, will face the charge of ‘corrupt person on the earth’.”
According to the law, everyone charged with being a ‘corrupt person on the earth’ should receive the death sentence.
“It is the obligation of the Intelligence Ministry to identify the pyramid selling companies and to deal with them firmly,” he added.
Elsewhere in his remarks, he said the fact that a company is officially registered doesn’t mean that all of its activities are legal, so people should be aware that they should not trust a company just because it has been registered.
He also explained the harmful effect of these companies.
“These companies, with their illegal activities, have a negative effect on family relations and give false hope to them (families). They also negatively affect the country’s economy by contributing to capital flight. And their failure to fulfill their liabilities is a threat to national security,” he added.