Russia's financial ombudsman dismissed on Friday a new pyramid scheme announced by convicted fraudster Sergei Mavrodi as a PR stunt aimed at cashing in on the upcoming movie PyraMMMid.
"I think Mavrodi is a brilliant manipulator. He has fooled us all," Pavel Medvedev, who is also a member of the State Duma's financial regulation committee, said at a press conference on Friday. "They say a film will be released in April. We are giving him free advertisement for the film."
Russian Director Eldar Solovatov is due to release a $2.5-million-budget action movie in April based on Mavrodi's 1994 MMM pyramid scheme that robbed millions of Russians of their life savings and landed Mavrodi a four and a half year stint in prison.
Mavrodi, 55, unveiled his new project in a video blog on Monday. MMM-2011, with the three Russian letters standing for "We Can Do a Lot," uses the online payment system, WebMoney, to allow investors to buy tickets that work like shares, but have no real value. The project's mastermind has promised investors returns of 20-30 percent per month.
Medvedev said measures had been taken in preparation for any possible unlawful behavior from Mavrodi, but as the fraudster has not yet done anything wrong, no legal action can be taken against him.
The former mathematician, who was released from prison in 2007, described the new project as a "financial social network." While the 1994 scheme used an aggressive TV and radio advertising campaign to reel in investors, the new project relies solely on the Internet, a move which many see as a bid to attract the attention of Russia's technologically-savvy youth, incidentally the main audience of the forthcoming movie.
Mavrodi has been outspoken about the project, making no attempt to hide the fact that it is a pyramid scheme, and claiming that it will attract up to 100,000 investors this year and up to 1 million in 2012.
"He speaks openly about it because he is not planning to do anything. If he had taken the first step, or even wanted to take the first step, he wouldn't be open about it," Medvedev said.
Mavrodi's 1994 swindle, which came to be regarded as a symbol of the lawlessness of the chaotic 1990s in Russia, was one of the largest of hundreds of other such schemes of that era. The projects took advantage of the ignorance of a nation still learning the basics of a new capitalist system. Ponzi schemes became so commonplace that their prices were quoted on the front pages of newspapers.
According to different estimates, the MMM scam attracted between two and five million investors, including a number of high-profile celebrities, who lost around $1.5 billion when it collapsed.
Mavrodi continues to insist that he did not break any laws and blames government interference for the collapse of the project. He still enjoys popular support and was even handed a bouquet of flowers on his release from prison.
An express poll conducted by the Ekho Moskvy radio station on Monday suggested that around 25 percent of Russians would be willing to take part in the new pyramid scheme. Hundreds of bloggers have also expressed their support for the project on Mavrodi's blog, although Medvedev dismissed these "fans" as jokers.
Other lawmakers have been less dismissive of the new pyramid scheme. The speaker of the Moscow City Duma, Vladimir Platonov, on Friday described MMM-2011 as a "threat to the economic security of the Russian state" and warned lawmakers to keep an eye on the fraudster.
Sergei Barsukov, head of the department for financial policy at the Finance Ministry, described it as another one of Mavrodi's "cynical lies."
"Always remember who Sergei Mavrodi is. There will be no miracles. We've been there before," Barsukov warned.
On Thursday, Mavrodi released three blog appeals to President Dmitry Medvedev, Prime Minister Vladimir Putin and the political elite, asking them to protect him from "unprecedented bullying" and "public defamation" from officials in connection with MMM-2011.
MOSCOW, January 14 (RIA Novosti, Natasha Doff)
