Ponzi Tracker Reports: Ponzi Schemes Now Illegal In Kazakhstan

The President of Kazakhstan has signed a law criminalizing Ponzi schemes and significantly toughening the penalties for those involved with Ponzi schemes.  President Nursultan Nazarbayev signed the law, which amended Kazakhstan’s criminal code by allowing the imposition of prison terms for those convicted of organizing Ponzi schemes.  The new law is a reaction to the proliferation of Ponzi schemes in Kazakhstan, with the Kazakhstan General Prosecutor’s office reporting a total of 61 criminal cases related to Ponzi schemes from 2010 to 2013.

The previous Kazakhstan criminal code did not contain a definition for a Ponzi scheme, and thus individuals suspected of Ponzi schemes could not be prosecuted for the Ponzi scheme itself, but instead ancillary crimes such as fraud or tax evasion.

According to a draft of the newly-enacted Article 224 circulated in January 2013, individuals accused of organizing or heading Ponzi schemes can face fines based on a monthly calculated index, correctional community work, or even imprisonment for three years with the possibility that their property could be confiscated.  The term of imprisonment can rise to a seven-year term when groups of individuals are involved in a Ponzi scheme, with certain enhancements allowing a further increase in the sentence, including when the scheme involved the deposits of large amounts of money from victims.


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