Spanish court convicts 11 in pyramid-scheme stamp fraud

MADRID – Spain’s National Court has sentenced 11 former company directors to prison terms of between two and 12 years for running a fraudulent multi-billion-euro (-dollar) pyramid scheme that used the savings of hundreds of thousands of small-time investors.

The court ordered six of the former directors of Afinsa to pay a total of 2.6 billion euros ($2.9 million) in compensation to the company’s 190,000 investors.

Afinsa was one of two postage stamp companies raided in 2006. The court said Afinsa lured people with promises of high returns on investments in antique stamps that turned out to be overvalued or fake. The interest payments came from new customers and not from appreciation in stamp value, as promised.

The 11 were convicted of charges including fraud, falsification of accounts and criminal bankruptcy.