Is Global Finance a Ponzi Scheme? Ask a Russian Expert [View all]

[marmar]

(Bloomberg) What's the difference between today's global finance system and a Ponzi scheme? This is the question that a 56-year-old veteran Russian financial scammer has been asking his victims.

Chillingly, he almost has a point.

Sergei Mavrodi is one of the most infamous names in Russia's recent history. Back in February 1994, amid the turmoil of the country's transition to a market economy, the mathematician organized a Ponzi scheme called MMM. He offered returns of 100 percent a month and advertised aggressively on national television. Before the pyramid crashed in July 1994, it attracted as many as 10 million depositors, making it more popular than the voucher privatization program that was supposed to give regular Russians a chance to take a stake in formerly state-owned enterprises.

Mavrodi managed to avoid prison for nearly a decade, in part by getting elected as a parliamentary deputy and using the status to obtain immunity from prosecution. He ultimately served out a four-and-a-half-year sentence for fraud. While in prison, Mavrodi wrote books and movie scripts, one of which -- PyraMMMid -- was later made into a successful film. ...............(more)

The complete piece is at: http://www.bloomberg.com/news/2012-06-06/is-global-finance-a-ponzi-scheme-ask-a-russian-expert.html