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Criminal case against pyramid scheme founder dropped in Novosibirsk

January 16, 2013, 12:34 UTC+3

In the early 1990s, the MMM pyramid was one of the largest financial schemes in Russia

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NOVOSIBIRSK, January 16 (Itar-Tass) — A court in the Novosibirsk region has dropped criminal proceedings against Sergei Mavrodi over the functioning of the MMM-2011 financial pyramid. The case was dropped under Article 24, Part 1 /lack of corpus delicti/, senior aide to the regional prosecutor Natalia Markasova told Itar-Tass.

The case against Mavrodi's assistant Alexei Astafyev has been dropped as well, Markasova said.

"We'll request the case, study it and then issue our opinion about the legality of this ruling," Markasova said in a terse comment.

The case against Mavrodi was opened at prosecutor's demand in the Kolyvanovsky district of the Novosibirsk region. He was named an accomplice of the main suspect in the illegal entrepreneurship case against local resident Alexei Astafyev /the case against him was opened in April 2011 - eds Itar-Tass/.

It was ascertained in the course of the investigation that Astafyev had headed an MMM-2011 division. Mavrodi supported the operation of the local division by advice, advertising support and information resources.

In February 2011, ten actions were filed against Internet providers demanding the closure of the website of Sergei Mavrodi's new project /MMM 2011 promised up to 260 percent of profit a year to the participants/. In July 2012, a Togliatti court ruled to restrict the MMM 2011 and MMM 2012 website in the Samara region that promised up to 900 percent of interest.

In substantiating their claims, the prosecutors noted that the "financial pyramid undermines the citizens' trust in the financial sector and the securities market and forms a negative attitude among the population toward the operation of government bodies."

The All-Russia political party MMM held its founding congress in Kursk on September 16. Sergei Mavrodi was elected its chairman. The congress was held under the slogan "we're changing the world."

In the early 1990s, the MMM pyramid was one of the largest financial schemes in Russia. Investigators recognized 10,454 people as injured parties, but experts said the number of cheated investors reached into some ten million.

According to mass media reports, Mavrodi and his brother Vyacheslav earned three billion roubles on their compatriots.

Mavrodi fled the investigators and was arrested in Moscow in January 2003. He had a fake passport. On April 24, 2007, Moscow's Chertanovsky court found him guilty of fraud and sentenced him to 4.5 years in prison.

On July 11, the Moscow City Court upheld the verdict. By that time, Mavrodi had been set free on time served in the Matrosskaya Tishina remand prison.

Moscow bailiffs reportedly had 1,900 writs of execution to recover more than 4.2 billion roubles from Mavrodi in favor of former MMM investors.


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