MMM is the largest financial pyramid scheme in the USSR and Russia, founded by Sergei Mavrodi. Up to 15 million Soviet and Russian citizens participated in MMM activities.
The name MMM is an abbreviation of the surnames of the founders: Sergei Mavrodi himself, his brother Vyacheslav Mavrodi and his brother's wife Olga Melnikova. In fact, MMM was a project of Sergei Mavrodi alone: the other participants were needed as co-founders. The company was founded in 1989 and initially traded in imported office equipment and computers. MMM became a financial pyramid scheme only in 1994.
Sergei Mavrodi, a software engineer by education, before creating the pyramid, he traded videotapes and worked as a night watchman. MMM for the first five years practically did not develop, but everything changed in the spring of 1994, when the first shares of MMM were issued. They cost one thousand Russian rubles or 65 cents at the exchange rate of 1994.
MMM promised its shareholders not to pay dividends after a year, but to redeem the shares at any time at the price that would be relevant at the time of redemption. The price grew exponentially: by mid-summer each share cost about 125 thousand rubles. The rate of shares was published in newspapers, so soon interest in them exceeded interest in the dollar rate.
When asked what kind of business MMM has, so profitable that it promises to pay such fabulous sums, Mavrodi vaguely talked about import-export operations. The people did not suspect this - a company secret, a commercial secret.
Except that no “profitable import-export” MMM was not engaged in. The calculation was simple: people buy shares, which grow in price, so it is unlikely that their holders, in pursuit of profit, will run en masse to demand cash for “MMM tickets”. But some people, who urgently needed money, still came to MMM for money: these were isolated cases, because the firm paid out the entire amount on demand.
The share price was growing faster than the dollar, which ensured a constant inflow of new shareholders. Advertising contributed to the increase in the number of shareholders: for example, MMM made the Moscow subway free for everyone for one day.
But especially effective was a narrative TV commercial shot by a Kazakh director. One of the plots featured an excavator worker Lyonya Golubkov. According to the story, he, with the help of MMM shares, bought boots and a fur coat for his wife, who began to dream of a house in Paris. Then Lyonya and his brother, with the money earned with the help of MMM, go to America, where: “Ours get acquainted with ‘theirs’, theirs like it”. In the meantime, Lyonya's wife communicates with “just Maria” from a popular TV series.
Another story was about a lonely woman Marina Sergeevna, who did not believe anyone and was “not fooled” by MMM. An advertisement about newlyweds Yulia and Igor, who say that “MMM is better than a scholarship” and their businessmen friends, also hinted to viewers that they should buy MMM shares “for everything”. Pensioners Nikolai Fomich and his wife also bought shares and met “just Maria” (Victoria Ruffo).
In total, more than 40 short clips were filmed, which viewers watched like a TV series. There have been no analogs of such pseudo-social advertising in Russia yet.
It got to the point that MMM shares were even sold in the Ministry of Finance - in the cafeteria. It is noteworthy that the actor Vladimir Permyakov, who played Lyonya, bought a three-room apartment, but in Moscow, not in Paris.
The first batch of shares amounted to 991 thousand pieces. The Ministry of Finance did not authorize the next issue, and then Mavrodi issued “MMM tickets” with his portrait, which did not fall under the law on securities. Then an even more cunning move was used: shareholders allegedly “voluntarily donated” money to Mavrodi, receiving the tickets as a souvenir. When the money was returned with accrued interest, the money was donated by Mavrodi himself, taking the ticket back.
In August 1994, on the order of the state authorities OMON stormed the main office of MMM, allegedly because of serious violations of the law and in order to recover almost 50 billion rubles in the budget. Only 4 billion rubles (690 thousand dollars at the then exchange rate) were seized in the office.
Mavrodi was also arrested, after which there was unrest among depositors, who demanded his release. The pyramid creator himself registered as a candidate for deputy, was released and in October was elected to the State Duma. Mavrodi did not pass as a presidential candidate: his signature sheets were rejected.
In September 1997, MMM OJSC was officially declared bankrupt. The shares were instantly devalued: about 50 people committed suicide at that time. At least 400 people calling themselves Sergei Mavrodi were admitted to psychiatric hospitals in the first years (for comparison: Napoleons and Lenins were half as many). According to official data, 10.5 thousand people were recognized as victims, but experts estimate that there could be 10-15 million people affected. The damage to depositors was estimated at more than 110 million dollars, although the researcher called a larger figure: more than 80 billion dollars.
The fate of the millions received for MMM shares is still unknown. No large sums were later found either in MMM's offices or in the apartment where Mavrodi lived. Only a collection of butterflies and a library of 1,500 books were seized from him.
Eyewitnesses claimed that, in anticipation of the collapse of the pyramid, Mavrodi's accomplices took the money to a safe place, probably even abroad, where it was “laundered” through front men and invested “in business”. It is said that the bills were transported by government agencies in 17 KamAZ trucks: Mavrodi confirmed this. According to other sources, some of MMM's depositors were special services and criminal authorities: it was dangerous for their lives not to pay them back.
The success of MMM kept many inhabitants of the post-Soviet space busy. Immediately after the collapse of MMM, more than 1,700 pyramid schemes sprang up one after another, including Hermes Finance, Russian House Selenga, Telemarket, Khopyor-Invest and others.
In 1998, Mavrodi launched Stock Generation, the largest pyramid scheme on the Internet. This virtual exchange traded virtual shares, but collapsed in 2000. Later he, who served 4.5 years in prison for fraud, launched the projects MMM-2011 and MMM-2012, which “extracted” from the inhabitants of the former Soviet Union and European countries at least 350 billion rubles. Further MMM spread to Africa, China and India. These pyramids also soon went bankrupt, many of the organizers received prison sentences, but Mavrodi himself managed to get away with it without returning anything to the depositors.
According to official data, Sergei Mavrodi died on March 26, 2018 in Moscow from a heart attack. The funeral was closed, he was buried in a closed coffin in Troekurovskoye cemetery at the expense of former MMM investors.
The fact that the coffin and the funeral were closed, and the fact that his brother Vyacheslav Mavrodi forbade to bury him in Khovansky cemetery next to his parents, and he himself did not attend the funeral, gave rise to a lot of rumors that Mavrodi is alive. Moreover, already in May 2018, after Mavrodi's death, his official page in one of the social networks blocked in Russia began to show fresh posts offering to exchange old shares for new ones and announcing the opening of new offices.
In 2019, a year after his death, videos with a man who looked like Sergei Mavrodi began to appear on the Internet, claiming that he was alive. This person was calling to get rich on MMM deposits. Some experts have suggested that the videos are fake and created using speech synthesizer and Deepfake technology. Whether this is true or not is still unknown.
