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30 Apr, 2009 00:52

“Khodorkovsky has blood on his hands”

Russia’s answer to Wall Street swindler Bernie Madoff, Sergey Mavrody, says the accusations against the jailed Yukos boss Mikhail Khodorkovsky don’t go far enough.

In an interview with the Russia.ru TV channel, Mavrody claims that Khodorkovsky and Leonid Nevzlin (former top managers of the Yukos oil company) gave orders for people to be murdered.

Mavrody, who notoriously organized the MMM financial pyramid – the largest in Russian history – says he learnt about Khodorkovsky’s guilt from fellow prisoners.

Russia’s greatest fraudster

Sergey Mavrodi and his company MMM appeared on the scene in the beginning of the 1990s. After the collapse of the Soviet Union the Russians weren’t experienced with joint stock companies and few understood their mechanism, but many wanted to invest their money and get a profit.

An aggressive advertising campaign on national TV made millions buy shares in MMM.

The company was a pure and classic financial pyramid. The dividends were paid from the money collected from fresh converts. Up to ten million people are believed to have been dragged into what was probably Russia’s biggest ever fraud. Prices of MMM shares skyrocketed and the hardest task for the company was to print enough of its valueless shares.

When the authorities finally decided to look closer at the pyramid, Mavrodi dropped the prices a hundred-fold and stopped paying dividends, claiming his company was being attacked by the government.

Thousands of his cheated investors came out to the streets demanding the cabinet and police leave MMM alone. Even ten years after the court’s sentence, some of them still believe Sergey Mavrodi’s claims.

The swindler himself used his almost hypnotic influence on his investors to get elected to the State Duma and obtain the diplomatic immunity of MPs. Although he was stripped of his status just one year later, he remained free until 2003, when he was finally arrested.
He was sentenced for four-and-a-half years and a $400 fine. Sergey Mavrodi was freed from jail in May 2007.

After that he decided to become a writer, but the pressrun of his debut book ‘Temptation’ was halted during a presentation in May 2008, due to lawsuits by cheated investors.