03:14:04 Sunday, March 29
Politics Economy Agriculture Society IT Education Medicine Religion Communal Services Incidents Crime Culture Sport

“Vozrozhdenie” pyramid scheme creator to be jailed for 85-mln-ruble fraud

09:33 | 09.10.2014 | Incidents


Penza, 9 October 2014. PenzaNews. The 55-year-old director of cooperative society “Vozrozhdenie” [Rebirth] will be sent to the court on a charge of large scale fraud.

“Vozrozhdenie” pyramid scheme creator to be jailed for 85-mln-ruble fraud

© PenzaNewsBuy the photo

“According to the investigators, from 2004 to 2011 the defendant organized and orchestrated the cooperative society ‘Vozrozhdenie’ with the aim to raise capital under the guise of share contribution with higher-than-bank interest. It is important to note that the society itself conducted no profit-oriented entrepreneurial activity that it had specified during its registration. The company gained its profits from attracting new funds from the shareholders, and not giving out the previous clients’ shares and interest payments, therefore acting in a similar manner to a pyramid scheme,” the official Investigative Committee of Russia representative told PenzaNews agency.

He pointed out that the defendant has opened several branches and representative offices of the company in Penza, Zarechny, Kuznetsk, Saransk, Nizhny Novgorod and several other cities.

“Moreover, he organized active advertisement campaigns through the media, distributed leaflets and pamphlets urging to put up their capital in the company. This advertisement featured false statements that the shares are protected from fraud, and that the company is reliable. The defendant cashed out the money of the victims and used it as he saw fit. Overall, 591 people were the victims of the scheme, and the total damage incurred by ‘Vozrozhdenie’ amounted to more than 85 mln rubles,” the agency interlocutor explained.

He added that the defendant has been taken into custody during the investigation.

According to the Investigative Committee officer, the pyramid scheme orchestrator pleaded not guilty.

“The investigators have gathered sufficient evidence to find the defendant guilty. The verdict was directed to the court for the hearing on the merits,” he said.

Lastest headlines
Read also