Financial pyramid founder in Moscow and Krasnodar ordered to pay 25 million rubles by the court
Russian Courts Crack Down on Financial Pyramid Schemes
In a recent development, a woman has been sentenced to six years in a general-regime colony for her role in operating illegal financial pyramid schemes in Krasnodar Krai, Russia. This verdict comes after the Lenin District Court in Krasnodar found her guilty of creating a criminal community, fraud, and the illegal establishment of two legal entities: LLC "Standard Premier" and LLC "UK 'Orion'".
The woman allegedly opened offices for these companies in Moscow and Krasnodar in 2020, promising investors up to 27% annual return by investing in major Russian corporations. However, the money collected from investors was reportedly misused, with a few small sums paid to clients from funds gained from new investors. Over 100 individuals were affected by these fraudulent activities.
Criminal cases have been opened against the scheme's organizer, and the court's ruling includes a recovery of more than 25 million rubles in favor of the victims to compensate for property damage. The verdict is yet to take effect. Additionally, the investigation into the accomplice of the fraudster is still ongoing, as reported by the press service of the courts of Krasnodar Krai.
While this isn't the first instance of financial pyramid schemes in Russia, recent cases have shown significant scams such as Recyclix and Juicy Fields, which defrauded investors of approximately €700 million. These schemes involved complex layers of deception and international fronts. The main organizer, Sergei Berezin, is currently sought by international prosecutors.
Authorities in various countries, including Poland and Finland, have been investigating and prosecuting related money laundering activities. In Russia, authorities are treating such crimes seriously, as demonstrated by the 10-year prison sentence request for another notorious scheme organizer, blogger Fedyakina.
To combat online financial pyramid schemes, governments are increasing efforts to implement early detection systems to prevent financial fraud tied to these pyramids. This endeavor reflects the continuing challenges posed by these schemes originating or operated by actors linked to Russia.
In light of the ongoing crackdown on financial pyramid schemes, the Russian courts have ruled that the woman involved in the illegal operations in Krasnodar Krai will serve a six-year prison term in a general-regime colony. Moreover, the court has ordered the recovery of over 25 million rubles to compensate victims who fell prey to the scheme, as these illegitimate business activities have been linked to prior cases such as Recyclix and Juicy Fields.
