Criminal case opened against MMM-2011 founders
MOSCOW. June 7 (Interfax) - The Russian Investigative Committee's Main Investigative Department for Moscow has opened a criminal case against the unidentified founders of the MMM-2001 financial pyramid scheme, the press service of the Moscow police authority has told Interfax.
The criminal case was opened on Thursday.
In January 2011, unidentified persons posted advertisements on the Internet inviting people to invest in the "My Mozhem Mnogoye (We Can Do A Lot)-2011" (MMM-2011) plan and earn over 20% a month, while having no intention or opportunity of keeping that promise, a police spokesman explained.
"A report by the Federal Anti-Monopoly Service (FAS)'s Expert Council for Developing Competition on Financial Markets qualifies MMM-2011 as a financial pyramid," he said.
The pyramid scheme has a hierarchical structure with all its members divided into "dozens", "hundreds", "thousands", and so on. In other words, it's is a kind of structured financial social network.
"Its distinguishing features are high-yield rates and the absence of investment or any other revenue-oriented activity, i.e. for members to receive promised income payments, they must recruit new members," the spokesman said.
If the project's real yield is below the promised level or there is no yield at all, part of the money invested by newcomers is spent on income payments to those who invested at earlier stagers. This scheme is doomed to bankruptcy. Those entering it at later stages invariably lose their money.
The criminal case was launched on charges of exceptionally large-scale fraud committed by an organized group.
Between 10 million and 15 million people have been fraudulently entrapped into the MMM-2011 "electronic" project that promised a 20% monthly income (30% to pensioners) since Sergei Mavrodi, the founder of the infamous MMM pyramid, announced his new brainchild early last year.
In some regions, authorities warned people against investing in MMM-2011, while a number of regional FAS branches launched criminal probes into violations of the Law on Advertizing during MMM-2011's advertising campaign.
Despite that, a VTsIOM opinion poll shows that 4% of Russians are ready to invest in Mavrodi's new project, and 46% believe that his project will cease to exist due to interference by the authorities, rather than due to a lack of people willing to participate. Although 75% of those polled agree that Mavrodi is a swindler, every fifth respondent sees nothing illegal in his actions.
