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Sergei Panteleevich Mavrodi (Russian: Сергей Пантелеевич Мавроди) (born Moscow August 11, 1955) is a Russian businessman and financier; the founder of the financial pyramid МММ. Sergei Mavrodi was found guilty of defrauding 10,000 investors out of 110 million rubles ($4.3 million).[1][1][2]
MMM activity
He is of Greek descent. In 1988, he founded the MMM Ponzi scheme.[3][4]
Mavrodi and his cousin aksana Pavlyuchenko also founded Stock Generation,[5][6] allegedly a classic pyramid scheme presented as a "virtual stock market game",".[1] The Massachusetts district court 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.[7] 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.[8][9]
Mavrodi was elected to the State Duma, thereby obtaining parliamentary immunity. He used the support of defrauded investors, for whom he had promised to start a pay back program. His immunity was nullified in October of 1995. Mavrodi declared MMM bankrupt on December 22, 1997, and was on the run until his arrest in 2003.[10]
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 Mavrodi to four and a half years in a penal colony. The court also fined Mavrodi 10,000 rubles ($390).[10] On May 22, 2007, Mavrodi left prison, serving full sentence. Eventually a movie was shot about Sergei Mavrodi.
Aftermath
In 2008 Sergei Mavrodi published the book "Temptation". In May 2008, bailiffs arrested Mavrodi's rights to this book. Seven thousand copies of the book were published.[2][11]
References
^ a b c "Sergei Mavrodi Convicted of Fraud in MMM Trial", by Kevin O’Flynn, The St. Petersburg Times.
^ a b ITAR-TASS
^ "A Scheme With No Off Button" by Catherine Rampell, NY Times
^ "Sergey Mavrodi" (Russian)
^ MMM Corporation by Peter Symes
^ "Money For Nothing", by Dan Brekke,Wired Magazine, Issue 8.09, Sep 2000
^ Appeal of SEC vs. Stock Generation, United States Court of Appeals for the First Circuit
^ SG Ltd. (Stock Generation Ltd.) et al.
^ 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
^ a b Moscow court sentences pyramid scheme head Mavrodi to 4.5 yrs
^ Сергей Мавроди. Искушение. Москва, Р7осмэн, 2008. ISBN 978-5-353-03364-4. Book text in Mavrodi's blog
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