Plexpay: The Owner Was Convicted and Sentenced to Prison

On December 21st, Trondheim Tingrett or local rourt in Norway which handled the Plexpay case has convicted the owner of Plexpay; Frode Jørgensen and he was sentenced to 2 years and 6 months in prison, plus confiscation of a Porsche Cayenne, half of a luxury appartment in Trondheim, and 1.2 millon NOK. 6 of the other defendants were given prison sentences ranging from 1 year and 9 months to 60 days, plus confiscation of certain assets. Two defendants were aquitted while the other two have had their trials postponed. The court also stated that Plexpay was an illegal pyramid scheme. Therefore, the assets of Plexpay will probably be confiscated by the Norwegian State, and that other participants in Plexpay may be prosecuted, because establishing, operating, promoting and participating in pyramid schemes is illegal according to Norwegian law. Frode Jørgensen has appealed while the other defendants have deferred their appeal decision. Back in 2005, when Plexpay was started, is a program where people can register for free. Then as members, they could purchase ‘Gold Status’ which entitled them to receive commission by referring other people. Plexpay was also a program which had offered 2% daily for 36 days and 2.5% daily for 29 days with compounding option and initial deposit non returnable. Other plans with higher minimum deposit were 3% daily for for 34 days, non compounding, initial deposit non returnable and 3% daily for 180 days, non compounding, initial deposit returnable. Plexpay was clearly an illegal pyramid scheme according to existing Norwegian and EU law. Now it has to be said that the law was changed in late 2005, effective from 01 January 2006. The earlier version was much weaker when a scheme had to be basically a "pure" pyramid scheme (without any "products" at all) to be illegal according to the law valid in 2005. Therefore, the police/prosecution are likely to indict the Plexpay bosses with investment fraud and shares fraud. These crimes carry a more severe prison sentence than pyramid offences. The statement from leading police attorney Waclawczyk : "The company was nowhere close to generating the profits that had been promised to investors. It had no identifiable income, except for the money paid in by the investors." This indicates that the police feel they will be able to prove gross fraud.