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'''Sergei Panteleevich Mavrodi''' ({{lang-ru|Сергей Пантелеевич Мавроди}}) (born [[Moscow]] August 11, 1955) is a [[Russia]]n [[criminal]]; the founder of the [[MMM (Ponzi scheme company)|МММ]] series of [[pyramid scheme]]s. In 2007 Sergei Mavrodi was found guilty in a Russian court of defrauding 10,000 investors out of 110 million rubles ($4.3 million).<ref name=piramidos>[http://www.sptimes.ru/index.php?action_id=2&story_id=21471 "Sergei Mavrodi Convicted of Fraud in MMM Trial"], by Kevin O’Flynn, The St. Petersburg Times.</ref><ref name=gazeta>[http://www.gazeta.ru/piramidos.shtml "Mavrodi's Internet-Pyramide Commapsed"] {{ru icon}}</ref><ref name=temptation>[http://itar-tass.com/eng/level2.html?NewsID=14623514&PageNum=44 ITAR-TASS]</ref>
'''Sergei Panteleevich Mavrodi''' ({{lang-ru|Сергей Пантелеевич Мавроди}}; (born August 11, 1955) is a Russian [[criminal]]; the founder of the [[MMM (Ponzi scheme company)|МММ]] series of [[pyramid scheme]]s. In 2007 Sergei Mavrodi was found guilty in a Russian court of defrauding 10,000 investors out of 110 million rubles ($4.3 million).<ref name=piramidos>[http://www.sptimes.ru/index.php?action_id=2&story_id=21471 "Sergei Mavrodi Convicted of Fraud in MMM Trial"], by Kevin O’Flynn, The St. Petersburg Times.</ref><ref name=gazeta>[http://www.gazeta.ru/piramidos.shtml "Mavrodi's Internet-Pyramide Commapsed"] {{ru icon}}</ref><ref name=temptation>[http://itar-tass.com/eng/level2.html?NewsID=14623514&PageNum=44 ITAR-TASS]</ref>


== MMM activities ==
== MMM activities ==
He is of mixed (Greek, Ukrainian and Russian) descent. In 1988, he founded [[MMM (Ponzi scheme)|MMM]]<ref>[http://www.nytimes.com/2008/12/21/weekinreview/21rampell.html "A Scheme With No Off Button"] by Catherine Rampell, NY Times</ref><ref>[http://vse-zvezdy.ru/boss/33.html "Sergey Mavrodi"] {{ru icon}}</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 }}</ref> together with his brother Vyacheslav Mavrodi, and Olga Melnikova. Initially MMM was an importer of office equipment. In 1992 MMM switched to the financial sector and by 1994 it had morphed into a [[Ponzi scheme]].
In 1988, he founded [[MMM (Ponzi scheme)|MMM]].<ref>[http://www.nytimes.com/2008/12/21/weekinreview/21rampell.html "A Scheme With No Off Button"] by Catherine Rampell, NY Times</ref><ref>[http://vse-zvezdy.ru/boss/33.html "Sergey Mavrodi"] {{ru icon}}</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 }}</ref>


In 1994 Mavrodi was arrested for tax evasion. He was then elected to the [[State Duma]],<ref name="RFE/RL" /> thereby obtaining parliamentary immunity. He was elected by the support of defrauded investors, for whom he had promised to start a pay back program. His immunity was nullified in October 1995. Mavrodi declared MMM [[bankrupt]] on December 22, 1997, then disappeared, and was on the run until his arrest in 2003.<ref name="metalpress" />
In 1994 Mavrodi was arrested for tax evasion. He was then elected to the [[State Duma]],<ref name="RFE/RL" /> thereby obtaining parliamentary immunity. He was elected by the support of defrauded investors, for whom he had promised to start a pay back program. His immunity was nullified in October 1995. Mavrodi declared MMM [[bankrupt]] on December 22, 1997, then disappeared, and was on the run until his arrest in 2003.<ref name="metalpress" />
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In 1998 Mavrodi created [[Stock Generation]],<ref>[http://www.pjsymes.com.au/articles/MMM.htm MMM Corporation] by [[Peter Symes]]</ref><ref>[http://www.wired.com/wired/archive/8.09/stock.html?pg=1&topic=&topic_set= "Money For Nothing"], by Dan Brekke,''[[Wired Magazine]],'' Issue 8.09, Sep 2000</ref> allegedly a classic [[pyramid scheme]] presented as a "virtual stock market game".<ref name=piramidos/> The website ran from 1998 to early 2000. The Massachusetts district court initially found that [[U.S. Securities and Exchange Commission]] was unable to cite Stock Generation's founders and owners for securities violations. However the [[United States Court of Appeals]] reversed this decision in 2001 concluding that SEC alleged sufficient facts to state a triable claim.<ref>[http://laws.lp.findlaw.com/getcase/1st/case/011176&exact=1 Appeal of SEC vs. Stock Generation], United States Court of Appeals for the First Circuit</ref> In 2003 the SEC obtained permanent injunctions against SG Ltd. and [[Relief Defendant|relief defendants]] SG Perfect and SG Trading, which profited from the disbursement of funds fraudulently gained by SG Ltd.<ref>[http://www.sec.gov/divisions/enforce/claims/sgltd.htm SG Ltd. (Stock Generation Ltd.) et al.]</ref><ref>[http://www.sec.gov/litigation/litreleases/lr18181.htm Securities and Exchange Commission v. SG Limited et al., (United States District Court for the District of Massachusetts, No. 00-11141-GAO)], U.S. Securities and Exchange Commission Litigation Release No.. 18181 / June 9, 2003</ref>
In 1998 Mavrodi created [[Stock Generation]],<ref>[http://www.pjsymes.com.au/articles/MMM.htm MMM Corporation] by [[Peter Symes]]</ref><ref>[http://www.wired.com/wired/archive/8.09/stock.html?pg=1&topic=&topic_set= "Money For Nothing"], by Dan Brekke,''[[Wired Magazine]],'' Issue 8.09, Sep 2000</ref> allegedly a classic [[pyramid scheme]] presented as a "virtual stock market game".<ref name=piramidos/> The website ran from 1998 to early 2000. The Massachusetts district court initially found that [[U.S. Securities and Exchange Commission]] was unable to cite Stock Generation's founders and owners for securities violations. However the [[United States Court of Appeals]] reversed this decision in 2001 concluding that SEC alleged sufficient facts to state a triable claim.<ref>[http://laws.lp.findlaw.com/getcase/1st/case/011176&exact=1 Appeal of SEC vs. Stock Generation], United States Court of Appeals for the First Circuit</ref> In 2003 the SEC obtained permanent injunctions against SG Ltd. and [[Relief Defendant|relief defendants]] SG Perfect and SG Trading, which profited from the disbursement of funds fraudulently gained by SG Ltd.<ref>[http://www.sec.gov/divisions/enforce/claims/sgltd.htm SG Ltd. (Stock Generation Ltd.) et al.]</ref><ref>[http://www.sec.gov/litigation/litreleases/lr18181.htm Securities and Exchange Commission v. SG Limited et al., (United States District Court for the District of Massachusetts, No. 00-11141-GAO)], U.S. Securities and Exchange Commission Litigation Release No.. 18181 / June 9, 2003</ref>


Mavrodi was placed under police custody in 2003, then was convicted of holding a fake passport and sentenced to 13 months in prison. While in custody he was also investigated over tax evasion and fraud charges that came to light in 1994 and 1995. Mavrodi tried to delay sentencing announcement of his criminal case. Court hearings on the fraud charges began in March 2006. On April 28, 2007, the Moscow court sentenced him to four and a half years in a [[penal colony]]. The court also fined him 10,000 [[ruble]]s ($390).<ref name=metalpress>[http://www.metallpress.info/content/64266.html Moscow court sentences pyramid scheme head Mavrodi to 4.5 yrs]</ref> On May 22, 2007, Mavrodi left prison, having served his full sentence.
Mavrodi was placed under police custody in 2003, then was convicted of holding a fake passport and sentenced to 13 months in prison. While in custody he was also investigated over tax evasion and fraud charges that came to light in 1994 and 1995. Mavrodi tried to delay sentencing announcement of his criminal case. Court hearings on the fraud charges began in March 2006. On April 28, 2007, the Moscow court sentenced him to four and a half years in a [[penal colony]]. The court also fined him 10,000 [[ruble]]s ($390).<ref name=metalpress>[http://www.metallpress.info/content/64266.html Moscow court sentences pyramid scheme head Mavrodi to 4.5 yrs]</ref>


In January 2011, Mavrodi launched another pyramid scheme called MMM-2011, asking investors to buy so-called Mavro currency units. He frankly described it as a pyramid, adding "It is a naked scheme, nothing more ... People interact with each other and give each other money. For no reason!" <ref>{{cite news|url=http://www.time.com/time/world/article/0,8599,2042721,00.html|title=Why is Russia's Bernie Madoff Back in Business? |last=Shuster|first=Simon|date=January 15, 2011|work=Time Magazine|accessdate=7 September 2012}}</ref> Ponzi schemes and financial pyramids are not illegal under Russian law.<ref name="asia">{{cite news|url=http://www.atimes.com/atimes/Central_Asia/NC20Ag01.html|title=Mavrodi's Ponzi comeback seeks financial apocalypse|last=Bigg|first=Claire|date=March 20, 2012|work=Asia Times|accessdate=7 September 2012}}</ref> In May 2012 he froze the operation and announced there would be no more payouts.<ref>{{cite news|url=http://rt.com/news/mmm-mavrodi-ponzi-scheme-715/|title=Fool me twice, shame on me: Russians fall once again for notorious Ponzi scheme|date=June 2, 2012|work=RT|accessdate=7 September 2012}}</ref>
In January 2011, Mavrodi launched another pyramid scheme called MMM-2011, asking investors to buy so-called Mavro currency units. He frankly described it as a pyramid, adding "It is a naked scheme, nothing more ... People interact with each other and give each other money. For no reason!" <ref>{{cite news|url=http://www.time.com/time/world/article/0,8599,2042721,00.html|title=Why is Russia's Bernie Madoff Back in Business? |last=Shuster|first=Simon|date=January 15, 2011|work=Time Magazine|accessdate=7 September 2012}}</ref> Ponzi schemes and financial pyramids are not illegal under Russian law.<ref name="asia">{{cite news|url=http://www.atimes.com/atimes/Central_Asia/NC20Ag01.html|title=Mavrodi's Ponzi comeback seeks financial apocalypse|last=Bigg|first=Claire|date=March 20, 2012|work=Asia Times|accessdate=7 September 2012}}</ref> In May 2012 he froze the operation and announced there would be no more payouts.<ref>{{cite news|url=http://rt.com/news/mmm-mavrodi-ponzi-scheme-715/|title=Fool me twice, shame on me: Russians fall once again for notorious Ponzi scheme|date=June 2, 2012|work=RT|accessdate=7 September 2012}}</ref>
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{{DEFAULTSORT:Mavrodi, Sergei}}
{{DEFAULTSORT:Mavrodi, Sergei}}
[[Category:1955 births]]
[[Category:1955 births]]
[[Category:Russian people of Greek descent]]
[[Category:Confidence tricksters]]
[[Category:Confidence tricksters]]
[[Category:Crime in Russia]]
[[Category:Crime in Russia]]

Revision as of 14:11, 6 August 2013

Sergei Panteleevich Mavrodi (Russian: Сергей Пантелеевич Мавроди; (born August 11, 1955) is a Russian criminal; the founder of the МММ series of pyramid schemes. In 2007 Sergei Mavrodi was found guilty in a Russian court of defrauding 10,000 investors out of 110 million rubles ($4.3 million).[1][2][3]

MMM activities

In 1988, he founded MMM.[4][5][6]

In 1994 Mavrodi was arrested for tax evasion. He was then elected to the State Duma,[6] thereby obtaining parliamentary immunity. He was elected by the support of defrauded investors, for whom he had promised to start a pay back program. His immunity was nullified in October 1995. Mavrodi declared MMM bankrupt on December 22, 1997, then disappeared, and was on the run until his arrest in 2003.[7]

In 1998 Mavrodi created Stock Generation,[8][9] allegedly a classic pyramid scheme presented as a "virtual stock market game".[1] The website ran from 1998 to early 2000. The Massachusetts district court initially found that U.S. Securities and Exchange Commission was unable to cite Stock Generation's founders and owners for securities violations. However the United States Court of Appeals reversed this decision in 2001 concluding that SEC alleged sufficient facts to state a triable claim.[10] In 2003 the SEC obtained permanent injunctions against SG Ltd. and relief defendants SG Perfect and SG Trading, which profited from the disbursement of funds fraudulently gained by SG Ltd.[11][12]

Mavrodi was placed under police custody in 2003, then was convicted of holding a fake passport and sentenced to 13 months in prison. While in custody he was also investigated over tax evasion and fraud charges that came to light in 1994 and 1995. Mavrodi tried to delay sentencing announcement of his criminal case. Court hearings on the fraud charges began in March 2006. On April 28, 2007, the Moscow court sentenced him to four and a half years in a penal colony. The court also fined him 10,000 rubles ($390).[7]

In January 2011, Mavrodi launched another pyramid scheme called MMM-2011, asking investors to buy so-called Mavro currency units. He frankly described it as a pyramid, adding "It is a naked scheme, nothing more ... People interact with each other and give each other money. For no reason!" [13] Ponzi schemes and financial pyramids are not illegal under Russian law.[14] In May 2012 he froze the operation and announced there would be no more payouts.[15]

In 2011 he launched a similar scheme in India, called MMM India, again stating clearly that the vehicle is a pyramid.[16] He was reported to be trying to expand his operations into Western Europe, Canada, and Latin America.[14]

Book

In 2008 Mavrodi published the book "Temptation". In May 2008, bailiffs arrested Mavrodi's rights to this book. Seven thousand copies of the book were published.[3][17]

References

  1. ^ a b "Sergei Mavrodi Convicted of Fraud in MMM Trial", by Kevin O’Flynn, The St. Petersburg Times.
  2. ^ "Mavrodi's Internet-Pyramide Commapsed" Template:Ru icon
  3. ^ a b ITAR-TASS
  4. ^ "A Scheme With No Off Button" by Catherine Rampell, NY Times
  5. ^ "Sergey Mavrodi" Template:Ru icon
  6. ^ a b Bigg, Claire (March 15, 2012). "Jailed For Not Paying A Fine, Ponzi Scheme Founder Plots 'Financial Apocalypse'". RFE/RL.
  7. ^ a b Moscow court sentences pyramid scheme head Mavrodi to 4.5 yrs
  8. ^ MMM Corporation by Peter Symes
  9. ^ "Money For Nothing", by Dan Brekke,Wired Magazine, Issue 8.09, Sep 2000
  10. ^ Appeal of SEC vs. Stock Generation, United States Court of Appeals for the First Circuit
  11. ^ SG Ltd. (Stock Generation Ltd.) et al.
  12. ^ Securities and Exchange Commission v. SG Limited et al., (United States District Court for the District of Massachusetts, No. 00-11141-GAO), U.S. Securities and Exchange Commission Litigation Release No.. 18181 / June 9, 2003
  13. ^ Shuster, Simon (January 15, 2011). "Why is Russia's Bernie Madoff Back in Business?". Time Magazine. Retrieved 7 September 2012.
  14. ^ a b Bigg, Claire (March 20, 2012). "Mavrodi's Ponzi comeback seeks financial apocalypse". Asia Times. Retrieved 7 September 2012.
  15. ^ "Fool me twice, shame on me: Russians fall once again for notorious Ponzi scheme". RT. June 2, 2012. Retrieved 7 September 2012.
  16. ^ Lobazina, Alina (September 1, 2012). "MMM scheme heads to India". Russia & India Report. Retrieved 7 September 2012.
  17. ^ Сергей Мавроди. Искушение. Москва, Р7осмэн, 2008. ISBN 978-5-353-03364-4 . Book text in Mavrodi's blog Mavrody is deceased

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