Prosecutors in Moldova have opened a criminal investigation into the activities of MMM-2011, the new business project of Sergei Mavrodi, the notorious mastermind of the MMM pyramid scheme which robbed millions of Russians of their savings in 1994, news agency Novosti-Moldova reported on Tuesday.
A license from Moldova's National Bank is required for all entities that carry out financial transactions in Moldova, the Prosecutor General's department of social and economic investigation said. The National Bank confirmed that acceptance of deposits from the population requires a license, which MMM-2011 does not possess.
Mavrodi’s MMM-2011 (the three letters stand for "We Can Do a Lot" in Russia) uses an 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.
A former mathematician, Mavrodi was released from prison in 2007 after serving a sentence for offenses relating to the collapse of the original MMM. He described the new project as a “financial social network.”
While his 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 Russia’s technologically-savvy youth.
Mavrodi’s 1994 swindle, which came to be regarded as a symbol of the lawlessness of the chaotic 1990’s in Russia, was one of the largest among hundreds of other such schemes in that era. The pyramids 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 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.
