Pyramid schemes reaniMMMated
Although the project once wiped out the savings of millions, there are still plenty of investors willing to open their wallets once again.
The 2011 Russian hit movie "The Pyramid" depicts a Robin Hood of the 1990s – a businessman who promises wealth for ordinary people and confronts the oligarchs. The real story behind this plot was a sad episode in Russia's post-Soviet history. The financial pyramid – called MMM – attracted millions who believed its promise to multiply their investment many times over. In the end it went bust, and up to 15 million people lost their life savings.
Its founder, however, feels little remorse. “I do not feel like I am a sinner,” Sergey Mavrodi, MMM creator and pyramid scheme founder told RT.
“What about MMM-94? It was undermined by the government, so a new MMM emerged, with virtually unlimited resources, absolutely uncontrolled. So the situation was not acceptable and everything was done to eliminate it,” Mavrodi recalls.
Sergey Mavrodi, the driving force behind the MMM movement, spent five years in prison for fraud. But now the man often called "the Russian Bernie Madoff" is back.
Seventeen years after his financial pyramid tore through the post-Soviet space, Sergey Mavrodi has a new scheme. And while you are unlikely to come across any commercials for his new enterprise in Russia, the streets of Ukraine are resounding with calls to join in with MMM-2011.
“We can do more!” proclaims the slogan of the new campaign. Mavrodi admits that it is indeed another pyramid and does not deny that it is a risky venture, but still promises people that they will make money.
“There is a virtual currency called MMM dollars which constantly rises in price from 20 to 60 per cent a month. This price only I can set. Some individuals exchange money between themselves, without any obligations, guarantees or conditions – it is a fundamental point,” Mavrodi explained.
When there is no legal entity, no joint account, no office – in other words everything is shared between millions of private accounts – it means no one can put an end to it…
Financial experts in Ukraine are unsurprised at Mavrodi’s latest scheme, given the rough patch the country is going through.
“The national bank is introducing new restrictions in order not to allow the depreciation of the national currency. A lot of people understand that the government machine is against administratively depressing the financial market. And people look for a way out,” stated Andrey Blinov, chief editor of the “Expert Ukraine” business magazine.
Mavrodi claims his actions are legal; Ukraine’s politicians disagree. The ruling party wants current laws tightened to block the MMM from making off with vulnerable people's nest eggs.
“MMM-2011 is a provision of financial services, and this kind of activity requires a license. And providing financial services without a license is a criminal offense,” maintains Aleksander Misenko, a lawyer from the Party of Regions.
MMM-2011 already has 1.5 million investors – and counting. Mavrodi remains convinced that it is a road to riches. But try telling that to the many millions of victims left with nothing and still reeling from his previous Ponzi scheme.