MOSCOW, December 16 (RAPSI) – The State Duma Committee on Civil, Criminal, Commercial and Procedural Law on Monday adopted a bill introducing criminal punishment for organizers and managers of financial pyramid (Ponzi) schemes, RIA Novosti reports from parliament.

Under the present law, ponzi schemes tend to be punished under the Criminal Code's articles on fraud. Lawmakers believe that these individuals have found loopholes allowing them to circumvent the present legislation. The new draft is an effort by lawmakers to keep pace with this evolving field of criminal activity.

The draft defines a financial pyramid as “a scheme in which the return on monetary or other investment is generated through money taken from new investors, while the organizers are not engaged in investment or other legitimate business activity.”

The bill proposes amending the Criminal Code by adding an article according to which organizing and managing a financial pyramid or its structural units will be punishable by up to five years in prison or a fine of up to 300,000 rubles ($9,125) or their income for a period of up to two years.

In the event of a large investment and considerable damage to participants, the fine can be increased to 500,000 rubles ($15,210) or up to six years in prison. In the event of a very large investment, pyramid organizers and managers can be sentenced to up to 10 years in prison and a fine of up to 1 million rubles ($30,420).