Hannu Kailajärvi, the mastermind behind WinCapita (formerly Winclub and Giiclub), which is believed to have been the largest fraud in Finnish history, was sentenced to four years in prison for aggravated fraud by the Vantaa District Court. Kailajärvi was also ordered to forfeit 6 million Euros to the State of Finland. Kailajärvi’s girlfriend was given a lesser sentence as an accomplice to the ponzi scheme. Both plan to appeal to a higher court and Kailajärvi still claims innocence.
WinCapita marketed itself as an investment club primarily engaged in currency trading and promised prospective members 400% annual returns. The court determined that no currency trading actually took place, but that WinCapita was in fact a pyramid scheme. Thousands of people took part, mainly in Finland with some investors from Sweden as well. Estimated economic damages are over 57 million Euros from nearly 100 million Euros in total investments.
The operation played on people's trust as first entrees gained profits and then brought in new members. An aura of exclusivity was created by the fact that you were unable to enter the club, unless recommended and referred in by an existing member. The criminal investigation was one of the largest ever in Finland and more than 250 related cases are currently headed to court. The entire verdict is available in Finnish from here.
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