History of "MMM": the creator and essence of the brilliant deception

Today, most residents of Russia know or have heard about the largest financial scam organized by S.P. Mavrodi. This is an MMM pyramid, which was presented in the form of a joint-stock company. The securities of this organization promised investors colossal returns, which certainly attracted the attention of a large number of people who lived during the birth of the new state. As a result, the famous slogan “Tomorrow is more expensive than yesterday!” left more than 5 million gullible citizens at a serious loss. Let us consider in detail the circumstances of the Mavrodi financial pyramid , its nuances and the outcome in the material.
From this article you will learn:

MMM pyramid - what is it?
Founder of the MMM pyramid
The origins of MMM Mavrodi
Period of activity of the MMM pyramid
Advertising and promotion of Leni Golubkova
Apogee of the Mavrodi pyramid
Trial and arrests
The final of the MMM pyramid
Conclusion

Foundation of the company

Few people know that the company was originally registered as a trading cooperative. Yes, yes, in 1989, when the USSR still existed, the MMM joint-stock community specialized in trading. First of all, it was such a scarce commodity as computers and components.

However, the direction changed quite quickly. The company traded in everything that promised quick profits: office equipment, advertising, equipment, stock exchange activities, even beauty contests. Also, the legal address of MMM often changed. At first the office was located on Gazgoldernaya Street, then on Varshavskoye Shosse, then on Bolshaya Pirogovaya.

However, there were many such companies in a very difficult time for the country and people. Most of them, after working for several months, simply fell apart. And today few people can remember their existence. However, MMM took a completely different path.

The history of MMM - where it all began

In 1989, the MMM cooperative was created whose main activity was the resale of scarce goods (computers and office equipment). The business was extremely simple: cheap components were bought abroad and resold in the country at an expensive price.

Two years later, the direction of activity changed to a more extensive one: advertising, equipment, stock exchange activities, beauty contests.

On October 20, 1992, MMM was transformed from a trading company into an investment company. The company was renamed OJSC MMM. She began to represent the joint-stock company.

In 1993, the first issue of shares was made in the amount of 991 thousand. The denomination was 1 thousand rubles. Sales to everyone began on February 1, 1994. 6 days later, Mavrodi introduced “two-sided quotes” and the principle of “autonomous quotes.” This sharply fueled interest in new shares.

Stock prices were artificially inflated. The slogan “today is always more expensive than yesterday” appeared. This made it possible to quickly sell all 991 thousand shares at a price above par. Within a month, the shares doubled in price. This success was caused primarily by the actions of Mavrodi and the high trust of the population.

After selling the entire stake, Mavrodi submitted a new application for a much larger issue of shares in the amount of 1 billion. But the Ministry of Finance refused him. Then he formed a new subsidiary organization called MMM-Funds. After which it was allowed to issue another 991 thousand shares. The new block of shares also quickly sold out.

Mavrodi realized that he would not be officially allowed to issue as many securities as he needed. Therefore, he came up with the idea of issuing simply pieces of paper called “MMM tickets” (“false shares”, “shares for the poor”). The common people called them “Mavrodiki”. Essentially it was just pieces of paper that were in demand. They did not represent any value supported by legislation, although Mavrodi positioned them as securities.

MMM tickets were similar to Soviet banknotes. The purple bill of 1000 MMM tickets was similar to the Soviet 25 rubles, and the red bill of 50 MMM tickets was similar to the Soviet 10 rubles. Instead of V.I. Lenin was depicted by Mavrodi himself.

In rare cases, some companies paid employees salaries in MMM tickets.

The price of MMM shares and tickets was set by Mavrodi at his own discretion. Quotes were updated weekly on Tuesdays and Thursdays.

The total price increase from February to August was 127 times. In some regions it is even higher - 140.

The short era of MMM remains well in the memory of people who lost money. Many people still remember the following phrases and quotes:

“I’m not a freeloader, I’m a partner”;
“I’ll buy boots for my wife”;
“MMM is better than a scholarship”;
“We are sitting here - and the money is flowing”;

How to buy shares - detailed instructions;
How to make money on stocks;
Investing in shares - what you should know;

origin of name

Few people know that the name was formed from the first letters of the last names of the creators of the MMM pyramid. These included Sergei Mavrodi, his brother Vyacheslav Mavrodi and Olga Melnikova. However, as Sergei Mavrodi later claimed, the latter participated in the process only nominally. It’s just that several founders were required to register the company, so they were invited to sign and officially become co-founders. They did not participate in the further activities of the company.

Death of the Great Schemer

On March 26, 2022, Sergei Panteleevich Mavrodi died in one of the Moscow hospitals from a heart attack. For a long time they did not want to take his body; finally, his ex-wife Elena Pavlyuchenko did it (whom he divorced in 2005, by his own admission, because he did not want to ruin her life). The funeral was attended by his wife, daughter and several investors of the former MMM-2011, with whose money everything was organized. Vyacheslav Mavrodi expressed his attitude to what happened only by forbidding Sergei to be buried in the family crypt at the Troekurovsky cemetery. And after the death of his older brother, he could not forgive him for eternally being in his shadow... You can have different attitudes towards Sergei Mavrodi. According to a survey conducted by the All-Russian Center for the Study of Public Opinion, the majority considers him a swindler and a charlatan, but there are also those who see true talent in him. Mavrodi was always surrounded by fans, with amazing consistency he managed to charm people so much that they were ready to donate their last savings. Why did he attract them? Is it just a promise of easy money? Or is it something else? Mavrodi took this secret of his personality with him... In his works he often wrote about human greed and greed... Maybe the great schemer decided to just play with us and expose our vices? Who knows…

Creation of a pyramid

But quite quickly, the main founder of the company realized that it would not be possible to get rich quickly and fabulously through ordinary trading. Then it occurred to him to create something new that did not yet exist in the post-Soviet space. This is how the story of the first pyramid – “MMM” – begins.

The transformation from a trading company to an investment company took place on October 20, 1992.

At the beginning of 1993, the first prospectus was registered. As a result, the company received the right to issue 991 thousand shares. In fact, this is where the story of MMM Mavrodi begins. Good advertising and well-thought-out marketing support did their job - the shares began to sell out very quickly. Moreover, their cost grew every day.

As a result, within a few months Mavrodi submitted an application to issue a new batch of shares - now for a billion copies. He was not given such permission, so he limited himself to another 991 thousand shares. They also went like hot cakes. There was incredible crowds at the sales points. People borrowed money from friends and relatives, sold property in order to purchase shares that promised fabulous money. Well, like any pyramid in history, MMM has seen better times. But such a flourishing simply could not last.

Education

In 1972, after graduating, he tried to enter the famous Physics and Technology Institute, where scientists and specialists of the highest level are trained. The young man expected to pass physics with an “excellent” grade, but received a satisfactory grade for his written work, so he took the documents and was enrolled in a somewhat less prestigious technical university - electronic engineering, whose graduates also included many famous people, for example, ex-director of the FSB Nikolai Kovalev and ex-wife of Evgeniy Kaspersky Natalya.

Sergei Mavrodi in his youth

As a student at the Faculty of Applied Mathematics, Sergei did not show much zeal for acquiring knowledge - he attended lectures and seminars extremely rarely. Although in his first year he nevertheless became the winner of the institute Olympiad, which in itself speaks of his outstanding physico-mathematical abilities.

During his student years, the young man was fond of playing preference, sambo, and practiced blacksmithing.

After graduating from the institute in 1978, the young engineer worked for 3 years as an assigned worker at one of the capital’s research institutes. Then he quit, got a job as a subway watchman and started selling pirated videos. As a result, in 1983 he was detained by law enforcement agencies for illegal business. He could have ended up behind bars, but he managed to avoid serious punishment, since in those years law enforcement agencies were working against “going too far” in relation to minor offenses.

The principle of the pyramid

Many people bought shares, hoping to quickly make a huge profit, without thinking at all about how the MMM pyramid worked.

In fact, the principle of operation is as simple as possible. The holder of a share could always sell it profitably only because it maintained a steadily increasing growth (remember the “tulip fever” in the seventeenth century in Holland). Over the course of a month, the share price approximately doubled.

In other words, during this time the number of investors (or at least shares sold out) quadrupled. Thus, the new generation of security holders significantly outnumbered the previous one. This made it possible to maintain the company's prestige and even buy back shares from holders at a significantly increased price. However, who would even think of selling shares that increase in price by 200 percent in one month? Of course, most people preferred to hold securities in their hands, waiting for them to rise to fabulous heights.

However, even under ideal conditions, the existence of a pyramid is possible only as long as each subsequent generation of investors is several times larger than the previous one. Everything here is the same as with an ordinary pyramid. But what will happen if, at least for several generations, the number of investors remains the same or, even more so, begins to decrease? The answer is simple. The pyramid will collapse. This is very well shown in the documentary film “MMM - the story of a brilliant deception”, released in September 2012.

Tickets with the image of Mavrodi.

Note that the cost of one ticket was one hundredth of the price of the share, i.e. a similar system was introduced as with money: rubles and kopecks. By the way, this turned out to be a very profitable move, since investors could not buy shares at that moment due to their high cost. In addition, such a maneuver helped S. Mavrodi avoid restrictions on the issue, and in general the securities law ceased to apply to MMM securities. The tickets had a certain similarity with Soviet chervonets, only in the center of the bill, instead of a portrait of Lenin, it contained a portrait of S. Mavrodi himself.

Tickets issued by MMM, with a portrait of Mavrodi

As noted above, MMM tickets were not officially and were not considered securities, but, nevertheless, they had all the necessary security elements, for example, watermarks. In addition, MMM tickets were printed at the same factories where American dollars were printed.

An interesting fact is that initially S. Mavrodi did not plan to start printing any tickets at all, but simply thought about repainting American dollars red. According to his memoirs, the logic in such actions was as follows: “there is no point in spending money on printing our own papers if the US government has already done everything. The green dollar is American, and the red one is mine.” Mavrodi also noted that in this case he would not break the law, since the dollar does not lose its properties if it is painted. So, he said: “if you want, go to the store and buy goods according to their face value for a red dollar, and if you want, come to the MMM exchange office and exchange it there for 100 dollars.”

Let us note that S. Mavrodi’s business was not just very profitable, but even more: MMM and its leader took over almost the monetary functions of the state. Thus, in the early 1990s, the ruble was extremely unstable and could not provide the Russian population with a decent standard of living, and S. Mavrodi offered society a quick and profitable way out of the current situation. This even led to the fact that a large number of companies preferred to store their available funds in MMM shares, and in some cases, companies even paid their employees the so-called. "Maurodics".

Staggering Profit

The profits of the founders and investors themselves grew rapidly. As mentioned above, the shares doubled in price within a month. Well, during the entire existence of the company (from January 1993 to August 1994, that is, a year and a half), the cost increased 127 times. The number of investors was measured in millions.

Mavrodi himself also did not remain aloof from the profits. According to some reports, his daily income was about $50 million.

Everything went relatively smoothly until July 27, 1994. It was then that the creator of the MMM pyramid, Sergei Mavrodi, announced a reduction in the value of shares to the original par value, that is, 127 times, to one thousand rubles. At the same time, he promised that now the growth rate will increase significantly and amount to about 400 percent per month.

Assistance from Leni Golubkova.

Joint Stock Company MMM

Thanks to a competent PR campaign on television and in the press, literally in the first six months of the sale of MMM shares, their value increased more than 120 times, and the number of investors, according to various estimates, was 10-15 million people.

Hero of the MMM advertising - Lenya Golubkov

In particular, everyone knows the advertisement where the main character is a simple guy Lenya Golubkov, thanks to investments in MMM shares, buys his wife “first new boots, then thinks about a car and even a house in Paris.” It is also interesting that the idea of such simple and primitive videos was proposed by S. Mavrodi himself, in addition, he came up with the company logo. By the way, the character of Leni Golubkov became the most popular person in 1994, and he was even ahead of Russian President B. Yeltsin in the rating.

According to the recollections of eyewitnesses and participants in those events, it is almost impossible to calculate how much MMM earned, because the money was not counted, but only approximately estimated, not in packs or boxes, but in whole rooms: “13 rooms... 16 rooms.” There is evidence that in Moscow alone Mavrodi earned at least $50 million a day.

It should be noted that almost from the very beginning of the issue of MMM shares, law enforcement agencies, as well as the top management of Russia, became actively interested in Mavrodi’s activities. In this regard, as the confrontation with the authorities increased, Mavrodi, in order to reduce possible claims against him, decided to make his company’s relations with investors completely civil. Thus, he abandoned purchase and sale transactions with tickets (note that only with tickets, not with shares) and proposed using a system of “voluntary donations.” The result was a situation where a citizen voluntarily gave his money (without buying a ticket, it was given as a souvenir) personally to Mavrodi, who would use it “for the benefit of Russia.” Naturally, such a scheme no longer violated the law, and it was difficult for Mavrodi to bring any charges.

It is worth noting that such transactions were not registered, since the legislation in force in 1994 allowed the registration of transactions after any period of time from the moment of its conclusion. The main argument was that the company physically cannot carry out such a number of registrations per day. At the same time, MMM made a statement that the investor may request registration, but then the company will not buy back such shares. By the way, this also did not contradict the law. Subsequently, at Mavrodi’s trial, registered shares did not take place anywhere.

In general, MMM worked actively for only six months - from the beginning of the sale of shares (February) until Mavrodi’s arrest, which occurred on August 4, 1994. According to Mavrodi’s memoirs, the company’s management clearly realized that the pyramid could not exist for long, so in December 1994 it was planned to allegedly stabilize the shares and begin to use them as a means of solid accumulation.

Activity of the company

Don’t think that you only worked in one direction. A huge amount of money that there was nowhere to invest required investing it in at least something.

Thus, the company invested money in various television programs: “Under the sign of the zodiac”, “Contacts, contacts”, “The Last Squeak”. With the money of investors, a video was shot for a song by the group “Zero” called “I’m going and smoking.” The company also released the film "Gongopher".

On May 17, 1994, MMM became the general sponsor of the match between Spartak and Parma. Football player Fyodor Cherenkov, for whom this match was a farewell, received a luxury Mitsubishi Pajero car as a gift. The company also acted as a sponsor at City Day in the Russian capital.

Many Muscovites remember charity events when a wealthy company entered into a contract with the management of the Moscow Metro, thanks to which city residents could ride it completely free of charge.

Well known advertisement

Of course, briefly telling the story of MMM, one cannot fail to mention the brilliant marketing campaign, which in many ways ensured its high popularity.

Of course, the most recognizable character from the advertisement was Lenya Golubkov - an ordinary Russian who always lacks money, devoured by wild inflation. Investing his last 50 thousand in MMM shares, within a month he receives enough profit to buy boots for his wife. After another month I have enough money for a fur coat. Next comes furniture, a car and even a house in Paris.

The commercials were, on the one hand, very short (15-30 seconds each), but at the same time they were released in successive series, creating something like a mini-series consisting of 43 commercials. Of course, Leni’s experiences were close to many potential investors. This was what hooked them, forcing them to take their last savings to the cash desk of MMM JSC, hoping to increase this money. Over time, in addition to Leni Golubkov, his wife, brother, and acquaintances of different ages began to appear in the videos, from newlyweds to retirees.

Well, the video, which simply shocked the minds of investors, was filmed with the participation of the famous Mexican actress Victoria Ruffo. Yes, yes, the same one who played the main role in the super-popular TV series “Simply Maria” in the 1990s. Of course, the participation of a famous actress in advertising was the reason why many people, already prepared by previous commercials and public opinion, could not stand it and invested in the pyramid.

How did it all end and how did it continue?

The end was “a little predictable” - the influx of new members slowed down and there was nothing to pay the “old guard” . stop payments altogether . All this happened in the second half of 2011 - early 2012, and no less rapidly than the construction of the pyramid:

To attract new participants, they began to give them $20, free of charge, but with restrictions on use. To the indignation of management, participants began registering as families.
In October 2011, all participants were asked to take out loans from banks and put this money on MMM deposits. On deposits they promised an income of 75% per month .
Later they introduced a special bonus - early unlocking of the deposit for those who paint their car with MMM advertising.

There were also many different “games” with percentages and conditions. But, in essence, it was “ dividing 0 by 0 in thirty different ways and then multiplying.”

Pyramid Collapse

The history of MMM ended in 1994. More precisely, August 4th. It was then that Sergei Mavrodi was arrested for tax evasion. As experts have calculated, over the years of the company’s existence he has underpaid the budget by about 50 billion rubles.

The assault on his apartment was shown live on television. Of course, immediately after this the stock price collapsed to zero.

The pyramid, as expected, collapsed. Well, the arrest of its founder only served as a catalyst. Perhaps, if this had not happened, the number of shareholders would have increased further, and the “bubble burst” would have been even louder.

The collapse of MMM: causes and consequences

In fact, MMM collapsed already in 1994, but was officially declared bankrupt only in 1997. What were the reasons for the collapse? Let's consider several versions.

Sergei Mavrodi himself blames everything on the state, with which he “did not share.” The tax debt of one of his enterprises amounted to 49.9 billion rubles, and MMM itself considered these claims to be groundless. However, if the organization's holders had paid this amount, perhaps the scandal could have been avoided. But Mavrodi chose to enter into open confrontation, and this is precisely what, in his opinion, he was not forgiven for. In this version, the answer to the question: “Where is the MMM money?”: in the Kremlin. That is, the state simply decided to profit from the investors’ money, blaming the organizer for everything.
According to another version, Mavrodi was simply unlucky. The state’s fault here is indirect: it was the warnings from above about the dangers of investing in MMM that provoked panic among the population. Everyone ran to return the money, but the structure of the financial pyramid did not allow for this. As a result, small investors were never able to get their funds back. The answer to the main question: MMM money was distributed to the most successful investors who, if they did not increase their capital, then at least returned theirs.
Version three: intentional bankruptcy. Mavrodi decided to turn the state’s statements to his advantage and suddenly announced a fall in the exchange rate in order to immediately buy up his shares at a low rate and appropriate the difference. The money ended up in the pocket of a lucky schemer.
Version four places responsibility for what happened on large MMM investors who wanted to make money on the difference in rates. Having persuaded Mavrodi to lower the rates, they eventually made money on the difference, appropriating all the wealth of MMM.
Version five: the machinations of competitors. They say that Mavrodi was set up by commercial banks, which were not satisfied with the current situation (when everyone brought money to MMM). It is difficult to say which of the listed versions is the most reliable. Everyone has their own truth... However, regardless of who is to blame, the consequences for ordinary people were terrible. Quite a few people, having lost their savings, committed suicide (about 50 people in total). More than 10 thousand people were officially recognized as victims, but according to observations, at least 2 million suffered, and Mavrodi himself put the figure at 10-15 million people.

Number of victims

Today it is difficult to say exactly how many people were holders of shares of MMM JSC. Securities, not to mention tickets (a cheaper analogue), were bought without registration, records of their owners were not kept, and they were freely transferred from person to person. Therefore, the investigation officially stated that the number of deceived people exceeded 10 thousand people. According to other sources, this number exceeded 10 million people.

Moreover, when the bubble under the loud name “MMM” burst, many people lost everything. After all, in pursuit of easy money, they invested not only personal savings, but also borrowed from loved ones (or persuaded them to also join a profitable business), sold apartments, cars and everything that had at least some value. As a result, about fifty people committed suicide in various ways, unable to bear the loss of everything - from savings to trust from loved ones.

The fate of Sergei Mavrodi

Of course, the fate of Sergei Mavrodi, the main founder of the pyramid, is of greatest interest.

After the crash of MMM, he hid from law enforcement officers for five years, without even leaving Moscow. In 2003, he appeared in court. The process lasted more than four years - all this time Mavrodi was in “Matrosskaya Tishina”. The case has accumulated 610 volumes.

But the founder received a very modest term - 4.5 years. Since he spent four years in prison, he was released within a month.

early years

Sergei Mavrodi was born in 1955 in Moscow into an ordinary Soviet family. His father was an installer, and his mother was an economist. In 1962, brother Vyacheslav was born. Soon the state allocated them an apartment on Komsomolsky Prospekt (which, by the way, was at first the only place of residence, and then practically the only source of income for Mavrodi Sr.). The brothers' father and mother died in 1980 and 1986, respectively, both from cancer. The brothers were left alone... At school, Sergei showed remarkable abilities in mathematics and physics, and upon graduation he entered the Moscow Institute of Electronic Engineering, from which he graduated, after which he worked for some time in a secret research institute, but soon wanted to leave there, he wanted independence and freedom ...

Followers of MMM

Of course, the success of the pyramid, which enriched the owner and made him one of the richest people in Russia in a matter of months, could not leave other lovers of making money at someone else’s expense indifferent.

Quite quickly, a huge number of other pyramids were registered in the country. According to experts, their number is close to two thousand. The most famous were “Tibet”, “Russian House Selenga”, “Hoper-Invest”, “Telemarket”, “Rosich” and many others.

In terms of popularity, they could not compare with MMM. However, people suffered from their activities - from hundreds of thousands to millions. The amount of stolen money ranged from billions to trillions of rubles.

"MMM" in the 21st century

Having been released, Sergei Mavrodi did not remain in the shadows for long. Already in 2011, he launched a new pyramid - “MMM-2011”. Now he deciphered the title as “We can do a lot.” A year later, the company was reorganized into MMM-2012. And in 2014 it turned into MMM-Global. The scheme of work remained the same - investors who had come earlier received profits from proceeds from new shareholders. At the same time, Mavrodi openly stated in his own blog that the companies are pyramids and can collapse at any time without returning the money. However, people still withdrew their savings and bought shares, hoping to make serious profits.

In 2015, Mavrodi announced the closure of the company, saying that any branches and centers that would continue to operate were fraudulent.

Today, branches exist in different countries of the world - not only in Russia, Belarus, Ukraine and Kazakhstan, but also in China, Japan, the USA, Peru, Ghana, South Africa and others. Now the reward was promised to be more modest - from 10 to 40 percent per month. The founders were betting on rapidly growing bitcoins.

In 2022, many branches were closed. Investors were promised to return the money along with the accumulated reward. However, the final payment date remains open and is constantly being pushed back. It is not difficult to assume that these investors also became victims of cunning manipulators who rely on human greed and stupidity.

How did MMM 2011 work?

Although Mavrodi later claimed that MMM 2011 had no rules, the system had both rules and a clear pyramidal structure .

At the bottom, the foremen are the leaders of the cells who directly communicated with ordinary participants, collected their money, made some payments, and performed other duties.
Centurions - those who were above the tens. They coordinated the actions of the foremen and carried out some operations themselves. We accumulated the funds collected by the foremen .
Thousands, etc. - the next links, with greater powers and income.

MAVRO-dollars in the form of tokens

The source of all earnings in the system must be transactions with internal MMM virtual assets. At first they were called MMM-dollars, then - MAVRO (so as not to be confused, we will always call them that).

Participants purchased MAVRO with their own funds.
We were waiting for the rate to increase.
At a certain point, we got the opportunity to sell MAVRO at an increased rate .

Course, i.e. the current price of MAVRO was set by Mavrodi himself .

From the point of view of an ordinary participant (if we neglect the details), the work of MMM 2011 was presented as follows:

The person found the foreman online, through advertising or through personal acquaintances.
The new “private man” handed over the money to the foreman, or reserved it in an account, or in electronic money. These funds became a “contribution.” They did not leave the participant’s sight, but the foreman had the right to demand them at any time.
The participant became the owner of MAVRO for the amount of the contribution. All the members of the dozen, the foreman and the higher authorities knew about the size of his new property.

Ukrainian advertising of a financial pyramid

MAVRO could be exchanged back for money from the foreman. If there were insufficient reserves, the foreman could count on the help of the centurion.

Over time, the system became more complex. MAVRO appeared with different returns, from 20% to 75% per month . Different MAVROs had different conditions for accrual and exchange for money. “Deposit MAVROs”, “lottery MAVROs”, and even “insurance MAVROs” appeared.

Referral payments appeared , when bonuses were paid from the contributions of new members to those who brought them into the system.