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Putin Calls for Better Law to Fight Ponzi Schemes

31 July 2012 17:39 (UTC +04:00)

Baku-APA. Russia should improve legislation to protect citizens against the Ponzi schemes and financial pyramids like those that defrauded millions of Russians of their savings in the early 1990s, President Vladimir Putin said on Tuesday, APA reports quoting RIA Novosti.

â€œIf such things happen, this should make us think about improving the current legislation in a way that guarantees the protection of people from such swindlers as Mavrodi,â€ Putin said at the Seliger youth forum, referring to MMM pyramid mastermind Sergei Mavrodi.

â€œAs for whether it is time for him [Mavrodi] again to go to prison, this should be established by law enforcement agencies first,â€ Putin said.

Mavrodi, 56, became a notorious 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 free in 2007.

Last year, he launched a new business venture, the MMM-2011, explicitly dubbing it a â€œfinancial pyramid.â€ 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.

In late May he said his new project, MMM-2011, had collapsed and there was not enough money to repay all the depositors. He also announced the launch of a new project, MMM-2012.