Wikipedia

MMM (Ponzi scheme company): Difference between revisions

Browse history interactively
← Previous edit
Content deleted Content added
VisualWikitext
Reverted 1 edit by 116.72.51.19 (talk): Nah, let's say what's he's known for, not hide it (TW)
GreenC bot (talk | contribs)
Bots
2,389,524 edits
 
(35 intermediate revisions by 32 users not shown)
Line 1:
{{Short description|1990s Russian Ponzi scheme company}}
{{More citations needed|date=January 2012}}
{{Infobox company
| name = Joint stock company "MMM"
| native_name = Акционерное общество «МММ»
| logo = MMM logo.pngsvg
| type =
| fate = Shut down by Russian police in 1994, declared bankruptcy in 1997, reopened in 2011 as [[MMM Global]]
Line 19 ⟶ 20:
| subsid =
}}
'''МММ''' was a [[Russia]]nRussian company that perpetrated one of the world's largest [[Ponzi scheme]]s of all time, in the 1990s.<ref>[http://www.cdi.org/russia/johnson/7056.cfm##13 Transitions Online] {{webarchive|url=https://web.archive.org/web/20070412084550/http://www.cdi.org/russia/johnson/7056.cfm |date=2007-04-12 }} accessed April 12, 2007</ref><ref name="RFE/RL">{{Cite web |first=Claire |last=Bigg |title=Jailed For Not Paying A Fine, Ponzi Scheme Founder Plots 'Financial Apocalypse' |date=March 15, 2012 |work=[[RFE/RL]] |url=http://www.rferl.org/content/mmm_mavrodi_plots_financial_apocalypse/24517183.html |url-status=live |archiveurlarchive-url=https://web.archive.org/web/20120316044530/http://www.rferl.org/content/mmm_mavrodi_plots_financial_apocalypse/24517183.html |archivedatearchive-date=March 16, 2012 |df= }}</ref> By different estimates from 5 to 10 million people lost their savings.<ref>{{cite news|title=MMM's Mavrodi Voted Into Duma|url=http://old.themoscowtimes.com/sitemap/free/1994/11/article/mmms-mavrodi-voted-into-duma/346594.html|accessdateaccess-date=3 December 2017|work=The Moscow Times|date=November 1, 1994|quote=MMM collapsed in July, swallowing the savings of an estimated 5 million to 10 million investors|archive-date=3 December 2017|archive-url=https://web.archive.org/web/20171203181559/http://old.themoscowtimes.com/sitemap/free/1994/11/article/mmms-mavrodi-voted-into-duma/346594.html|url-status=live}}</ref> According to contemporary Western press reports, most investors were aware of the [[fraudulent]] nature of the scheme, but still hoped to profit from it by withdrawing money before it collapsed.<ref name="csburn"/><ref>{{cite news|title=Russian Investors Entered Stock Scheme With Eyes Wide Open|url=httphttps://articleswww.chicagotribune.com/1994-/07-/31/news/9407310366_1_mmmrussian-investors-entered-stock-scheme-investmentwith-eyes-wide-open/|work=Chicago Tribune|date=July 31, 1994|quote=But like gamblers [...], MMM's players thought they were smart enough to win big before the inevitable bust occurred|url-status=live|archiveurlarchive-url=https://web.archive.org/web/20130726092109/http://articles.chicagotribune.com/1994-07-31/news/9407310366_1_mmm-scheme-investment|archivedatearchive-date=July 26, 2013|df=}}</ref>
 
In 2011, MMM re-opened as "[[MMM Global]]".
Line 26 ⟶ 27:
MMM was established in 1989 by [[Sergei Mavrodi]],<ref name="RFE/RL" /> his brother Vyacheslav Mavrodi, and Olga Melnikova. The name of the company was taken from the first letters of the three founders' surnames.
 
Initially, Mavrodi operated a network of computer-importing cooperatives.<ref name="rutrouble"/> In January 1992, tax police accused MMM of [[tax evasion]], leading to the collapse of MMM-'s internal bank, and causing the company to have difficulty obtaining financing to support its operations.<ref>{{cite news|title=MMM's Sergei Mavrodi: Behind the Hype|url=http://old.themoscowtimes.com/news/article/tmt/349662.html|accessdateaccess-date=3 December 2017|work=The Moscow Times|date=August 6, 1994|url-status=live|archiveurlarchive-url=https://web.archive.org/web/20171203162752/http://old.themoscowtimes.com/news/article/tmt/349662.html|archivedatearchive-date=3 December 2017|df=}}</ref> Faced with difficulties in funding its foreign trade, the company switched to the financial sector. It offered [[United States|American]] stocks to Russian investors, but met with little success. In December 1992, MMM-Invest was created as a [[voucher investment fund]], a type of entity created to collect [[Voucher privatization|privatization vouchers]].<ref name="sec-invest"/> It was renamed Russ-Invest in May 1995, to distance it from the MMM scheme.<ref name="sec-invest">{{cite web|title=File No. 3-9006|url=https://www.sec.gov/litigation/admin/337294.txt|publisher=Securities and Exchange Commission|accessdateaccess-date=3 December 2017|archive-date=31 May 2017|archive-url=https://web.archive.org/web/20170531194251/https://www.sec.gov/litigation/admin/337294.txt|url-status=live}}</ref>
 
The MMM Ponzi scheme was launched in February 1994,<ref name="makielmei">{{cite book|last1=Malkiel|first1=Burton G.|last2=Mei|first2=J. P.|title=Global Bargain Hunting: The Investor's Guide to Profits in Emerging Markets|date=1999|publisher=Simon and Schuster|isbn=9780684848082|pages=[https://archive.org/details/globalbargainhun00burt/page/84 84]–87|url=https://archive.org/details/globalbargainhun00burt|url-access=registration|language=en|df=}}</ref> promising annual returns of up to {{val|3000}}%.<ref>{{cite news|title=Defendant In Fraud Case Wins Election|url=httphttps://articleswww.chicagotribune.com/1994-/11-/01/news/9411010054_1_sergeidefendant-mavrodiin-electionfraud-officialscase-dumawins-election/|accessdateaccess-date=3 December 2017|work=Chicago Tribune|date=November 1, 1994|language=en|url-status=live|archiveurlarchive-url=https://web.archive.org/web/20171203162752/http://articles.chicagotribune.com/1994-11-01/news/9411010054_1_sergei-mavrodi-election-officials-duma|archivedatearchive-date=3 December 2017|df=}}</ref> The company started an aggressive [[television|TV]] ad campaign, spending 330 million rubles in March 1994.<ref name="makielmei"/> The ad campaign appealed to the general public by using "ordinary" characters that viewers could identify with. The most famous of them, a "folk hero" of early 1994, was [[Lyonya Golubkov]].<ref name="csburn">{{cite news|title=Russian Investors Get Burned|url=https://www.csmonitor.com/1994/0811/11082.html|accessdateaccess-date=3 December 2017|work=Christian Science Monitor|date=11 August 1994|url-status=live|archiveurlarchive-url=https://web.archive.org/web/20150926153637/http://www.csmonitor.com/1994/0811/11082.html|archivedatearchive-date=26 September 2015|df=|quote=People were perfectly aware that MMM was not a honest company. Their motive was that they thought they could withdraw money before it collapsed}}</ref> Another notable marketing effort was a giveaway of free [[Moscow Metro|Metro]] trips to all [[Moscow]] citizens on a particular day.<ref name="tolstikova">{{cite journal|last1=Tolstikova|first1=Natasha|title=Mmm As a Phenomenon of the Russian Consumer Culture|journal=E - European Advances in Consumer Research|date=1999|volume=4|pages=208–215|url=http://www.acrwebsite.org/volumes/11384/volumes/e04/E-04|access-date=2017-12-03|archive-date=2017-12-03|archive-url=https://web.archive.org/web/20171203164847/http://www.acrwebsite.org/volumes/11384/volumes/e04/E-04|url-status=live}}</ref>
 
At its peak the company was taking in millions of US dollars each day from the sale of its shares to the public.<ref name="rfejailed">{{cite news|title=Jailed For Not Paying A Fine, Ponzi Scheme Founder Plots 'Financial Apocalypse'|url=https://www.rferl.org/a/mmm_mavrodi_plots_financial_apocalypse/24517183.html|accessdateaccess-date=3 December 2017|work=RadioFreeEurope/RadioLiberty|date=March 15, 2012|url-status=live|archiveurlarchive-url=https://web.archive.org/web/20171115185438/https://www.rferl.org/a/mmm_mavrodi_plots_financial_apocalypse/24517183.html|archivedatearchive-date=15 November 2017|df=}}</ref> Mavrodi reportedly owned enough cash to pack several rooms full with banknotes.<ref name="rfejailed"/> The success of MMM in attracting investors led to the creation of other similar companies, including [[Tibet (company)|Tibet]], [[Chara (company)|Chara]], [[Khoper-Invest]], [[Selenga (company)|Selenga]], [[Telemarket]], and [[Germes]]. All of these companies were characterised by aggressive television advertising and extremely high promised rates of return. One company promised annual returns of {{val|3000030,000}}%.<ref>{{CitationCite neededweb|last=|first=|date=May|title=MMM 2012Global Review: Sergey Mavrodi's MLM BTC Ponzi cult|url=https://behindmlm.com/mlm-reviews/mmm-global-review-sergey-mavrodis-mlm-btc-ponzi-cult/|url-status=live|archive-url=https://web.archive.org/web/20201129043725/https://behindmlm.com/mlm-reviews/mmm-global-review-sergey-mavrodis-mlm-btc-ponzi-cult/|archive-date=2020-11-29|access-date=2021-01-25|website=behindmlm.com}}</ref>
 
Regular publication in the media of the rising MMM share price led President [[Boris Yeltsin]] to issue a decree in June 1994 to protect investors from false advertising.<ref name="csfirmoffers">{{cite news|title=Firm Offers Public Huge Returns, But Government Calls it Illegal|url=https://www.csmonitor.com/1994/0728/28091.html|accessdateaccess-date=3 December 2017|work=Christian Science Monitor|date=28 July 1994|url-status=live|archiveurlarchive-url=https://web.archive.org/web/20150907233113/http://www.csmonitor.com/1994/0728/28091.html|archivedatearchive-date=7 September 2015|df=}}</ref>
 
On 22 July 22, 1994, the [[Ministry of Finance (Russia)|Ministry of Finance]] issued a statement listing MMM among a number of investment firms which had illegally issued unregistered securities.<ref name="csfirmoffers"/> Thousands of investors staged a mass protestprotested in front of the company headquarters, prompting the intervention of riot police.<ref name="csfirmoffers"/> By the next day, the firm was no longer operational.<ref name="csfirmoffers"/> The company attempted to continue the scheme for a few days, and even issued new shares.<ref name="rutrouble">{{cite news|title=Rouble trouble: Naive Russian investors have had their fingers badly|url=https://www.independent.co.uk/news/business/rouble-trouble-naive-russian-investors-have-had-their-fingers-badly-burnt-by-the-collapse-of-mmm-a-1377747.html|accessdateaccess-date=3 December 2017|work=The Independent|date=21 August 1994|url-status=live|archiveurlarchive-url=https://web.archive.org/web/20161014101038/http://www.independent.co.uk/news/business/rouble-trouble-naive-russian-investors-have-had-their-fingers-badly-burnt-by-the-collapse-of-mmm-a-1377747.html|archivedatearchive-date=14 October 2016|df=}}</ref> As Russia did not have any laws against Ponzi schemes, the government decided to seek tax evasion charges.<ref name="rutrouble"/> At that point, Invest-Consulting, one of the company's subsidiaries, owed more than 50 billion rubles in taxes (US$26 million), and MMM itself owed between 100 billion and 3 trillion rubles to the investors (from US$50 million to US$1.5 billion). MMM shares fell from 115,000 rubles to 1,000 rubles (about $0.50).<ref name="mtmc">{{cite news|title=Mavrodi Charged, Could Face 7 Years in Jail|url=http://old.themoscowtimes.com/news/article/tmt/349325.html|accessdateaccess-date=3 December 2017|work=The Moscow Times|date=August 16, 1994|url-status=live|archiveurlarchive-url=https://web.archive.org/web/20171203162752/http://old.themoscowtimes.com/news/article/tmt/349325.html|archivedatearchive-date=3 December 2017|df=}}</ref> In the aftermath, some investors reportedly threatened to [[Self-immolation|set themselves on fire]].<ref>{{cite news|title=Russia watches pyramid scheme teeter|url=https://www.upi.com/Archives/1994/07/30/Russia-watches-pyramid-scheme-teeter/7752775540800/|accessdateaccess-date=3 December 2017|work=UPI|language=en|archive-date=3 December 2017|archive-url=https://web.archive.org/web/20171203181557/https://www.upi.com/Archives/1994/07/30/Russia-watches-pyramid-scheme-teeter/7752775540800/|url-status=live}}</ref>
 
Several organisations of "investors" made efforts to recover their lost investments, but Sergei Mavrodi manipulated their indignation and directed it at the government. Mavrodi was arrested on tax evasion charges, unrelated to the MMM scheme, on 4 August 1994.<ref name="mtmc"/> Most shareholders blamed the government for their losses.<ref name="upirefe">{{cite news|title=Russian pyramid victims hit government|url=https://www.upi.com/Archives/1994/08/28/Russian-pyramid-victims-hit-government/7879778046400/|accessdateaccess-date=3 December 2017|work=UPI|date=August 28, 1994|language=en|archive-date=3 December 2017|archive-url=https://web.archive.org/web/20171203181557/https://www.upi.com/Archives/1994/08/28/Russian-pyramid-victims-hit-government/7879778046400/|url-status=live}}</ref> A 'Union of Defense of the Rights of MMM Shareholders' emerged, attempting to collect the 1 million signatures required to hold a no-confidence referendum against Yeltsin's government.<ref name="upirefe"/>
<ref>{{cite news |last1=John |first1=Sarkan |title=Eric dalius |url=https://businesstrenders.com/eric-j-dalius-is-the-man-behind-saivian-ponzi-cold-out/ |access-date=19 June 2021}}</ref>
In October 1994 Mavrodi managed to win a by-election to replace [[Andrey Aizderdzis]] in the [[State Duma]], and with it immunity from prosecution.<ref>{{cite news|last1=Erlanger|first1=Steven|title=Russian Tied to Stock Scheme Gains Election to Parliament|url=https://www.nytimes.com/1994/11/01/world/russian-tied-to-stock-scheme-gains-election-to-parliament.html|accessdateaccess-date=3 December 2017|work=The New York Times|date=1 November 1994|url-status=live|archiveurlarchive-url=https://web.archive.org/web/20150526100415/http://www.nytimes.com/1994/11/01/world/russian-tied-to-stock-scheme-gains-election-to-parliament.html|archivedatearchive-date=26 May 2015|df=}}</ref> Mavrodi claimed to be the victim of jealous bureaucrats, and that MMM shares would regain their value if he was elected.<ref>{{cite news|last1=Hiatt|first1=Fred|title=ALLEGED TAX DEFRAUDER WINS ELECTION TO RUSSIAN PARLIAMENT|url=https://www.washingtonpost.com/archive/politics/1994/11/01/alleged-tax-defrauder-wins-election-to-russian-parliament/7e89826e-376b-4be1-88a3-07ea5de923ea/|accessdateaccess-date=3 December 2017|worknewspaper=Washington Post|date=1 November 1994|url-status=live|archiveurlarchive-url=https://web.archive.org/web/20171203162752/https://www.washingtonpost.com/archive/politics/1994/11/01/alleged-tax-defrauder-wins-election-to-russian-parliament/7e89826e-376b-4be1-88a3-07ea5de923ea/|archivedatearchive-date=3 December 2017|df=}}</ref> During the campaign he was supported by [[Vladimir Zhirinovsky]], who hoped that Mavrodi would provide him with future financial backing.<ref>{{cite news|last1=Boudreaux|first1=Richard|title=Russian Wins Parliament Seat and Immunity: Election: Sergei Mavrodi bilked thousands with his MMM pyramid scheme. But voters took him at his word again.|url=https://articleswww.latimes.com/archives/la-xpm-1994-11-01/news/-mn-57273_1_mmm57273-pyramid-schemestory.html|accessdateaccess-date=3 December 2017|work=Los Angeles Times|date=1 November 1994|archive-date=3 December 2017|archive-url=https://web.archive.org/web/20171203164847/http://articles.latimes.com/1994-11-01/news/mn-57273_1_mmm-pyramid-scheme|url-status=live}}</ref> After being elected he appeared in the State Duma only once, to vote against an attempt to strip him of parliamentary immunity.<ref name="upibar"/>▼
 
Mavrodi launched his own political party, the Party of People's Capital, but it was barred from registering after violating election laws.<ref name="upibar">{{cite news|title=Russian party barred from elections|url=https://www.upi.com/Archives/1995/09/28/Russian-party-barred-from-elections/8155812260800/|accessdateaccess-date=3 December 2017|work=UPI|date=September 28, 1995|language=en|url-status=live|archiveurlarchive-url=https://web.archive.org/web/20171203164847/https://www.upi.com/Archives/1995/09/28/Russian-party-barred-from-elections/8155812260800/|archivedatearchive-date=3 December 2017|df=}}</ref> He decided to stage a protest against a decision, but this time only 200 people showed up.<ref>{{cite book|last1=Barker|first1=Adele Marie|title=Consuming Russia: Popular Culture, Sex, and Society Since Gorbachev|date=1999|publisher=Duke University Press|isbn=0822323133|page=[https://archive.org/details/consumingrussia00adel/page/64 64]|url=https://archive.org/details/consumingrussia00adel|url-access=registration|language=en|df=}}</ref> In October 1995, the Duma cancelled Mavrodi's right to immunity as a deputy.<ref>{{cite news|last1=WILLIAMS|first1=CAROL J.|title=Criminality Taints Dozens of Russian Office-Seekers|url=https://articleswww.latimes.com/archives/la-xpm-1995-10-26/news/-mn-61255_1_moscow61255-officestory.html|accessdateaccess-date=3 December 2017|work=Los Angeles Times|date=26 October 1995|url-status=live|archiveurlarchive-url=https://web.archive.org/web/20171203162752/http://articles.latimes.com/1995-10-26/news/mn-61255_1_moscow-office|archivedatearchive-date=3 December 2017|df=}}</ref> In 1996, he tried to run for Russia's presidency, but his bid was rejected after officials ruled that most of the signatures he submitted had been forged.<ref>{{cite news|title=Mavrodi's MMM Born Again|url=http://old.themoscowtimes.com/sitemap/free/1997/1/article/mavrodis-mmm-born-again/313621.html|accessdateaccess-date=3 December 2017|work=The Moscow Times|date=January 14, 1997|url-status=live|archiveurlarchive-url=https://web.archive.org/web/20171203162752/http://old.themoscowtimes.com/sitemap/free/1997/1/article/mavrodis-mmm-born-again/313621.html|archivedatearchive-date=3 December 2017|df=}}</ref> MMM declared bankruptcy on September 22, 1997.{{Citation needed|date=May 2012}}▼
▲In October 1994 Mavrodi managed to win a by-election to replace [[Andrey Aizderdzis]] in the [[State Duma]], and with it immunity from prosecution.<ref>{{cite news|last1=Erlanger|first1=Steven|title=Russian Tied to Stock Scheme Gains Election to Parliament|url=https://www.nytimes.com/1994/11/01/world/russian-tied-to-stock-scheme-gains-election-to-parliament.html|accessdate=3 December 2017|work=The New York Times|date=1 November 1994|url-status=live|archiveurl=https://web.archive.org/web/20150526100415/http://www.nytimes.com/1994/11/01/world/russian-tied-to-stock-scheme-gains-election-to-parliament.html|archivedate=26 May 2015|df=}}</ref> Mavrodi claimed to be the victim of jealous bureaucrats, and that MMM shares would regain their value if he was elected.<ref>{{cite news|last1=Hiatt|first1=Fred|title=ALLEGED TAX DEFRAUDER WINS ELECTION TO RUSSIAN PARLIAMENT|url=https://www.washingtonpost.com/archive/politics/1994/11/01/alleged-tax-defrauder-wins-election-to-russian-parliament/7e89826e-376b-4be1-88a3-07ea5de923ea/|accessdate=3 December 2017|work=Washington Post|date=1 November 1994|url-status=live|archiveurl=https://web.archive.org/web/20171203162752/https://www.washingtonpost.com/archive/politics/1994/11/01/alleged-tax-defrauder-wins-election-to-russian-parliament/7e89826e-376b-4be1-88a3-07ea5de923ea/|archivedate=3 December 2017|df=}}</ref> During the campaign he was supported by [[Vladimir Zhirinovsky]], who hoped that Mavrodi would provide him with future financial backing.<ref>{{cite news|last1=Boudreaux|first1=Richard|title=Russian Wins Parliament Seat and Immunity: Election: Sergei Mavrodi bilked thousands with his MMM pyramid scheme. But voters took him at his word again.|url=https://articles.latimes.com/1994-11-01/news/mn-57273_1_mmm-pyramid-scheme|accessdate=3 December 2017|work=Los Angeles Times|date=1 November 1994}}</ref> After being elected he appeared in the State Duma only once, to vote against an attempt to strip him of parliamentary immunity.<ref name="upibar"/>
 
The original investigation was closed in 1997 for lack of evidence.<ref name="ptdmt"/> The Prosecutor General's Office reopened the case in 1998, when Mavrodi was investigated for fraud and placed on an international wanted list.<ref name="ptdmt">{{cite news|title=Police Track Down MMM Fugitive|url=http://old.themoscowtimes.com/sitemap/free/2003/2/article/police-track-down-mmm-fugitive/240674.html|access-date=3 December 2017|work=The Moscow Times|date=February 3, 2003|url-status=live|archive-url=https://web.archive.org/web/20171203162752/http://old.themoscowtimes.com/sitemap/free/2003/2/article/police-track-down-mmm-fugitive/240674.html|archive-date=3 December 2017}}</ref> While it was believed that Sergei Mavrodi fled to Greece, he was ultimately arrested in Moscow, and investigators concluded that he probably never left the city.<ref name="ptdmt"/>
▲Mavrodi launched his own political party, the Party of People's Capital, but it was barred from registering after violating election laws.<ref name="upibar">{{cite news|title=Russian party barred from elections|url=https://www.upi.com/Archives/1995/09/28/Russian-party-barred-from-elections/8155812260800/|accessdate=3 December 2017|work=UPI|date=September 28, 1995|language=en|url-status=live|archiveurl=https://web.archive.org/web/20171203164847/https://www.upi.com/Archives/1995/09/28/Russian-party-barred-from-elections/8155812260800/|archivedate=3 December 2017|df=}}</ref> He decided to stage a protest against a decision, but this time only 200 people showed up.<ref>{{cite book|last1=Barker|first1=Adele Marie|title=Consuming Russia: Popular Culture, Sex, and Society Since Gorbachev|date=1999|publisher=Duke University Press|isbn=0822323133|page=[https://archive.org/details/consumingrussia00adel/page/64 64]|url=https://archive.org/details/consumingrussia00adel|url-access=registration|language=en|df=}}</ref> In October 1995, the Duma cancelled Mavrodi's right to immunity as a deputy.<ref>{{cite news|last1=WILLIAMS|first1=CAROL J.|title=Criminality Taints Dozens of Russian Office-Seekers|url=https://articles.latimes.com/1995-10-26/news/mn-61255_1_moscow-office|accessdate=3 December 2017|work=Los Angeles Times|date=26 October 1995|url-status=live|archiveurl=https://web.archive.org/web/20171203162752/http://articles.latimes.com/1995-10-26/news/mn-61255_1_moscow-office|archivedate=3 December 2017|df=}}</ref> In 1996, he tried to run for Russia's presidency, but his bid was rejected after officials ruled that most of the signatures he submitted had been forged.<ref>{{cite news|title=Mavrodi's MMM Born Again|url=http://old.themoscowtimes.com/sitemap/free/1997/1/article/mavrodis-mmm-born-again/313621.html|accessdate=3 December 2017|work=The Moscow Times|date=January 14, 1997|url-status=live|archiveurl=https://web.archive.org/web/20171203162752/http://old.themoscowtimes.com/sitemap/free/1997/1/article/mavrodis-mmm-born-again/313621.html|archivedate=3 December 2017|df=}}</ref> MMM declared bankruptcy on September 22, 1997.{{Citation needed|date=May 2012}}
 
TheMavrodi originalwas investigationfound wasand closedarrested in 1997 for lackFebruary of evidence2003.<ref name="ptdmt"/> TheWhile Prosecutorin General'scustody, OfficeMavrodi reopenedwas given until 31 January 2006 to read the casedocuments in 1998his [[fraud]] case against him (the criminal case consisted of 650 volumes, wheneach 250-270 pages long).{{Citation needed|date=May 2012}} At the end of April 2007, Mavrodi was investigatedconvicted forof fraud, and placedgiven ona ansentence internationalof four-and-a-half years. Since he had already spent over four years in custody, he was released less than a month later, on 22 wantedMay list2007.<ref name="ptdmt">{{cite news|title=PoliceMavrodi TrackWalks DownFree MMMAfter 4 1/2 FugitiveYears|url=http://old.themoscowtimes.com/sitemap/free/20032007/25/article/policemavrodi-trackwalks-downfree-mmmafter-fugitive4-12-years/240674196858.html|accessdateaccess-date=3 December 2017|work=The Moscow Times|date=FebruaryMay 323, 20032007|url-status=live|archiveurlarchive-url=https://web.archive.org/web/20171203162752/http://old.themoscowtimes.com/sitemap/free/20032007/25/article/policemavrodi-trackwalks-downfree-mmmafter-fugitive4-12-years/240674196858.html|archivedatearchive-date=3 December 2017|df=}}</ref> While it was believed that Sergei Mavrodi fled to Greece, he was ultimately arrested in Moscow, and investigators concluded that he probably never left the city.<ref name="ptdmt"/>
 
Though no longer current, MMM ''Bilets'' [[share certificate]]s, which bear a resemblance to banknotes and formerly issued in ‘denominations’ of varying amounts, have gained some interest as collectors items.
Mavrodi was found and arrested in February 2003.<ref name="ptdmt"/> While in custody, Mavrodi was given until January 31, 2006 to read the documents in his [[fraud]] case against him (the criminal case consisted of 650 volumes, each 250-270 pages long).{{Citation needed|date=May 2012}} At the end of April 2007, Mavrodi was convicted of fraud, and given a sentence of four-and-a-half years. Since he had already spent over four years in custody, he was released less than a month later, on May 22, 2007.<ref>{{cite news|title=Mavrodi Walks Free After 4 1/2 Years|url=http://old.themoscowtimes.com/sitemap/free/2007/5/article/mavrodi-walks-free-after-4-12-years/196858.html|accessdate=3 December 2017|work=The Moscow Times|date=May 23, 2007|url-status=live|archiveurl=https://web.archive.org/web/20171203162752/http://old.themoscowtimes.com/sitemap/free/2007/5/article/mavrodi-walks-free-after-4-12-years/196858.html|archivedate=3 December 2017|df=}}</ref>
 
The MMM scandal led to increased regulation of the Russian stock market, but the legacy of the fraud led many to become extremely suspicious of any [[joint stock company|joint stock companies]].{{citation needed|date=December 2019}}
Line 51 ⟶ 54:
{{Main|MMM Global}}
 
From 2011, Mavrodi started targeting developing countries in Asia and Africa, promising 30% monthly returns and other promotional offers. It claimed that this was not a [[high-yield investment programmeprogram]] of HIYP(HYIP). Rather it was mentioned on the website that a communitygroup of people were "selflessleyselflessly helping each other" in a form of "Global Fund of mutual aid." Participants were asked to send financial help to fellows with the promise that they would be helped when in need by returning a sum more than what they had sent. In India, for example, many victims of this scheme reported that once they sent the "help", they received messages saying that the system has restarted and that they couldn'tcould no longer access their investments anymore.<ref>{{Cite web|url=https://caravanmagazine.in/reportage/bitcoin-india-after-demonetisation|title=Promise and peril in the Indian bitcoin economy|last=Thaker|first=Aria|website=The Caravan|language=en|access-date=2019-07-15|archive-date=2019-07-15|archive-url=https://web.archive.org/web/20190715122513/https://caravanmagazine.in/reportage/bitcoin-india-after-demonetisation|url-status=live}}</ref>
 
==See also==
* [[Caritas (Ponzi scheme)|Caritas]]
* [[Lyonya Golubkov]]
* [[Pyramid schemes in Albania]]
* ''[[The PyraMMMid]]''
* [[Stock Generation]], yet another financial scheme by Mavrodi, calling itself a "stock market game"
* [[European Kings Club]]
 
==References==
Line 64 ⟶ 68:
 
== External links ==
{{commons category|MMM}}
*{{in lang|ru}} [https://web.archive.org/web/20071117125103/http://www.advertka.ru/media/video/12710/ 1992 MMM TV Commercials]
 
Retrieved from "https://en.wikipedia.org/wiki/MMM_(Ponzi_scheme_company)"