Already a Bloomberg.com user?
Sign in with the same account.
WARSAW, Poland (AP) — Polish prosecutors filed a new charge of fraud on Wednesday against a man who ran a nationwide financial scheme that allegedly cheated thousands clients for millions of euros (dollars).
The fraud scheme has grown into one of the largest scandals to shake Poland in the 23 years since it abandoned communism and embraced capitalism.
A company that acted like a bank, Amber Gold, offered returns of over 10 percent on what it claimed were investments in gold. Instead of investing the money, it apparently used funds from new clients to pay off older clients. It collapsed this month, unable to repay 182 million zlotys (€56 million).
The exact number of people impacted is unclear but on Wednesday prosecutors said they received complaints from 2,990 people.
Several class-action lawsuits are being prepared against Amber Gold, but it is unclear whether they will be able to regain any of the losses.
Marcin Plichta, who opened Amber Gold in 2009, was charged with six counts of financial wrongdoing earlier this month when the scandal came to light.
A spokesman for prosecutors, Wojciech Szelagowski, said the charge of defrauding investors of large sums of money was added Wednesday after investigators looked closely at the company's books.
If found guilty, Plichta could face up to 15 years in prison.
The scandal has raised questions about the effectiveness of the government and state structures. Prosecutors admitted earlier this week that they had failed for three years to take action against Amber Gold despite red flags being raised by the country's financial supervisory body.
Prime Minister Donald Tusk has also come in the spotlight because his son, Michal Tusk, had business dealings with Plichta.
The prime minister is to address parliament on the matter on Thursday.