Sergei Mavrodi, the man behind the biggest Ponzi scheme in Russian history, said on Saturday that his new project the MMM-2011 had collapsed and there is no money enough to be returned to all the depositors.
“It’s necessary to face the truth – it’s impossible to run the MMM-2011 anymore…There is naturally not enough money for everybody in the pyramid so the MMM-2012 [Mavrodi’s new ponzi scheme] will help…We will take some money from it,” Mavrodi said in a video statement posted on his web site.
The MMM-2011 (the three letters stand for “We Can Do a Lot” in Russia), which Mavrodi desribed as a “financial social network,”used the WebMoney online payment system to allow investors to buy tickets which work like shares, but have no real value. The project’s mastermind has promised investors returns of 20-30 percent per month.
Mavrodi, 56, became a nationwide celebrity in the early 1990s, when he organized and aggressively promoted his MMM joint stock company, which turned out to be a Ponzi scheme that deprived 10 to 15 million investors of approximately $1.5 billion.
Though the MMM went bust in 1994, Mavrodi successfully avoided arrest until 2003, when he was detained in downtown Moscow. He served 4 1/2 years in prison, walking out in 2007.
Last year, he launched a new business venture, the MMM-2011, explicitly dubbing it a “financial pyramid.” The project was not officially registered as a company or organization, which prevented financial authorities from mounting a legal crackdown on it despite their frequently voiced wishes to do so.
Mavrodi’s lawyer claimed there are no legal grounds for charging his client since he was only MMM-2011’s “advisor” – “a person who gave private recommendations.”
According to the MMM-2011’s web site, over 35 million people have invested their money to the project.