Mastermind of Russian financial pyramid to spend 6 years in penal colony
The amount of losses suffered by 546 victims of the pyramid is more than RUB 159 million ($2.81 million).
Financial pyramids continue to be a problem in Russia, with the latest example coming from Chuvashia, a federal subject of the Russian Federation, where a typical hyip scheme defrauded investors of more than RUB 159 million ($2.81 million).
During 2014 and 2015, an investment firm named “Udobno Dengi” promised hefty returns to those who invest their money in the project. As a typical scam, the entity initially paid some returns to investors before eventually halting payments and activities. According to a report by Interfax, 546 individuals were defrauded by the firm.
The mastermind of the scheme, 51-year old Nikolai Ogorodnikov, will spend six years in penal colony as a result of the crime – large-scale financial fraud.
The sentencing comes in the face of data provided by the Central Bank of Russia, which shows that the regulator identified only 31 financial pyramids in the first quarter of 2017. This compares with 50 such fraudulent schemes identified in the equivalent period a year earlier.
At the same time, Marat Safiulin, who heads the Federal Public-State Foundation for the Protection of Investor and Shareholder Rights, estimates that every 48 hours, a new financial pyramid emerges in Russia. Mr Safiulin has noted that the average life of a financial pyramid does not surpass three months. Typically after such a period of time, some key targets are met and the fraudsters establish another entity in another Russian region. He voiced his concerns with regards to fraudulent schemes involving crypto-currencies and forecast that they will spread further in the future.
Russia’s penal code has been under fire lately. The Center for Strategic Research (CSR), whose board is chaired by ex-finance minister Alexey Kudrin, has drafted a document that proposed the removal of penal liability for offenders of the country’s economic laws. Such offenses will fall outside of the scope of the Penal Code.
Under the project, by 2025, economic criminals will not face jail terms for their offences. Instead, they will have to pay a fine proportional to the harm caused.
Among the reasons for the proposed changes are the high costs for sustaining prisoners’ life.