The founder of the MMM financial pyramid or Ponzi scheme, Sergei Mavrodi seen here in 2007, has died aged 62.
Russian businessman Sergei Mavrodi, whose MMM pyramid scheme deprived millions of Russians of their savings in the 1990s, has died of a heart attack, according to Russia media.
Reports said the 62-year-old was rushed to the hospital late on March 25 with pain in his chest and died several hours later.
Mavrodi’s MMM financial pyramid was a typical Ponzi scheme in which earlier investors receive their profits from subsequent investors. Mavrodi promised returns of 20 percent to 75 percent a month, as well as lotteries and bonuses for investors.
As soon as the number of new clients stopped growing, the pyramid collapsed, causing huge financial losses for at least 10 million people, in some cases leaving them destitute.
A mathematician who became one of the earliest computer programmers, Mavrodi first went into business selling pirated videos and CDs. He founded a company called MMMM that initially imported office equipment.
He then gave up trading and founded the financial pyramid of the same name that became the largest in Russia.
Lured by a catchy television advertising campaign, an estimated 10 to 15 million people invested and received vouchers that promised a huge return.
Mavrodi became “one of the most recognised personalities” in the country’s popular culture, Rossiiskaya Gazeta state newspaper wrote.
Fresh out of the Soviet Union, Russians generally had little financial knowledge and were naive.
“Mavrodi’s success came from the fact that such types of swindles were a novelty in Russia at the time, plus this was accompanied by a really mass-market and quite cleverly made advertising campaign,” economist Sergei Khestanov told Sputnik radio station.
From 2011-16, Mavrodi launched Ponzi schemes under the MMM brand in India, China, South Africa, Zimbabwe, and Nigeria.
In many of those countries, Mavrodi’s operations were subsequently shut down or suspended.