Sergey Mavrodi: The Founder and The Man Behind MMM

Sergey Mavrodi is a founder and leader of the MMM Social Financial Community. MMM is sure to be his life-work, but not the only one. Sergei Mavrodi, having a degree in mathematics, worked as a programmer and took part in the development of the first operating systems. The company he founded was one of leading computer equipment distributors in Russia. He was a Deputy of the Russian Parliament. His literary works were published and they are sold in book stores. Two of his screenplays were made into movies. His poems were turned into songs.

Youth

Sergey was born in 1955, in Moscow in a simple Soviet “middle class” family – of a worker and an economist. From his father, of Ukrainian and Greek origin, was left a memorable surname – Mavrodi. Since high school the young man showed great talent in the exact sciences was the winner of numerous physical and mathematical Olympiads, sometimes even led lessons on behalf of his teachers.

After school he entered the Moscow Institute of Electronic Engineering at the Department of Applied Mathematics, from which he graduated in 1978 with the specialization “artificial intelligence”.

Whilst in the Institute he got interested in Sambo (Russian martial art) and having a weight of 60kg became the champion in Moscow in the Open category. However, this was the end of the professional sports career as further growth demanded too much time.

Upon graduation Mavrodi worked for some time as a programmer, but then he resigned and started a simple business – trade of the audio and video recordings.

MMM-94

In 1989 Mavrodi founded the corporative society “MMM”, based on which then he created a few dozen of other commercial structures. The corporative society, in particular, was engaged in computer supplying, which were only at their starting point of accessing the market’s daily turnover. In 1992, the brand became universally recognizable after Mavrodi offered, several times, to all the residents of Moscow a day of free of charge travel in Metro (Moscow subway).

Since February 1994, the joint-stock company "MMM" began to issue tickets and sell them through an extensive chain of offices throughout the country. In MMM offices people were able to buy tickets and sell already bought tickets. The price which MMM bought and sold tickets for grew two times per month. It means that anyone, who had bought MMM tickets, could sell the MMM in a month for the double price and make a profit. MMM commercials were regularly on central TV channels. It caused a public excitement in the society. These tickets were not securities. There were no promises that the prices of the tickets MMM would be doubled during a month. Therefore, MMM actions were hardly a classic Ponzi scheme. Sergei Mavrodi didn’t deceive anybody and did not say that money was invested in high-yield business projects.

Sergei Mavrodi planned to spend the money, accumulated in MMM, on purchasing companies to be privatized. And then he wanted to distribute these companies ' shares among MMM tickets holders. Then in Russia, shareholders would not have been a handful of super-rich oligarchs, but dozens of ordinary citizens.

Mavrodi explained his motivation: “In Russia there was a ‘privatization’. And if we call a spade a spade – a total deception and robbery of defenseless population who doesn’t understand anything.” But MMM lasted only six months – a period during which the number of participants reached, according to various estimates, 10-15 million, the total amount of deposits – a third of the national budget, the price of shares, designated on a “discretionary decision” at the rate of 100% per month, increased 127 times. In the summer of 1994, the government stopped the work of the joint stock company "MMM". Those, who had MMM tickets, couldn't sell them back to MMM. Sergei Mavrodi was charged with tax evasion. He was arrested afterwards.

Why didn’t the police prohibit selling and buying MMM tickets MMM at the beginning? Why had they been waiting for six months? Probably, the police realized that they had no reason to interfere. From a legal point of view, it was impossible to claim MMM: people simply bought and sold MMM tickets, they were not investments. But then six months later, when over 10 million Russians had become ticket holders, the state regarded MMM as a serious competitor and decided to destroy it at any cost. And the state had not even considered what dire consequences those who had bought MMM tickets would suffer from. “The system did not collapse at all. It was artificially destroyed at the peak of its development,” said Mavrodi. During police probe the witnesses told about 17 trucks in which, secret service forces had taken cash from MMM’s office.

Member of Parliament

In the prison Mavrodi started collecting signatures for registering as a candidate for the State Duma (Parliament) of the Russian Federation. After two months was signed in and released. Thanks to the high rating, on October 30, 1994 he was elected and became a Member of Parliament. During his election campaign Mavrodi did not keep as a secret that he goes to State Duma solely for the sake of the parliamentary immunity, and since elected as a deputy, was not present at any of its meetings. Mavrodi also refused to get a salary and use all benefits provided to the deputies.

The state needed a pretext for expelling Mavrodi from the State Duma. He was charged with taking part in  business activities. And according to the Russian Constitution, Members of Parliament do not have the right to conduct business. A year later, October 6, 1995, the State Duma terminated his parliamentary powers ahead expiry.

The arrest and trial

After the revocation of Sergei Mavrodi’s parliamentary mandate, the investigations against him were restarted, additionally to the existing cases there has been added one more – fraud. He was added into the Russian and then in the international wanted list. More than 5 years he was hiding in a rented apartment on a street, near to his home.

In 2003 Mavrodi was arrested. According to the prosecutors, the damage done by MMM to millions of depositors was estimated at $110 million. But the accusation stated that the funds were spent solely on the MMM’s development: payments, advertising, staff salaries, opening new offices, etc. For himself Mavrodi didn’t spend almost anything – didn’t buy yachts, palaces, planes, etc.

The investigation lasted 3.5 years, another year was the court. On April 28, 2007 the Chertanovo district court sentenced Sergey Mavrodi to 4.5 years in general regime penal colony. Mavrodi was found guilty under article 159 of the Criminal Code (fraud). As mitigating circumstances, the court took into account that the founder of MMM had not previously been convicted and had a child to support. The court didn’t take into account that MMM had not given any promise of rising cost of tickets and that MMM had not signed any contracts with buyers of tickets. And, moreover, the court didn’t not consider social problems that "MMM" had wanted to solve by issuing tickets.

Literary Activity

After his discharge from prison, Mavrodi got engaged into writing activities. In 2008, was released his book “The Temptation” (other name – “Son of Lucifer”), written by him in prison. The book consists of more than 100 short stories; each describes one of the human vices. Sergei Mavrodi is the author of many philosophical, love and civil poems. Some of them are turned into songs.

On the basis of the history of the MMM-94 was shot a movie “PiraMMMida.” Sergey Mavrodi wrote the screenplay for this movie and Universal Picture was engaged in its rental.

Revival of MMM

In February 2011 Sergey Mavrodi revived MMM. This is not a company, not an organization, but a community of people. Mavrodi took account of mistakes made in 1994. Money is not kept in one place. Now in MMM there is, in principle, no money - all the money is only on participants’ accounts. MMM just connects those who want to give and receive help.

In the spring of 2011 financial analysts and experts stated that people wouldn’t transfer money, if they were not guaranteed that they would make a profit. But MMM was successfully launched. And now, for more than 4 years, the Community has been successfully developing. Now MMM unites several million participants from different countries of the world.

Sergey Mavrodi’s Quotes

“The cowardice has lots of names. I do not fear nobody’s and no types of calls. You shouldn’t be afraid at all, of anyone or anything. A feeling of fear humiliates. You lose yourself.”

“You can betray only that who trusts you. The worst sin – betrayal!”

“Everything has its melting point. Friendship, loyalty, love, honor… Everything! And may God protect you from confirming this terrible truth in practice, on people close to you. And there are abysses where one better not look into. Since there’s nothing else but betrayal, lies, dirt and meanness.”

“If they treat you unfairly, humiliate you, abuse your honor and dignity – fight! By all the available means and methods, without regard to anything and without looking back. Defend it, your honor! At any price. Any!! They used to duel for the honor. If you are silent and let them treat you like a dumb animal, a slave, what are you complaining about? Slaves don’t have honor”.

“The truth is the most improbable thing in the world. It’s almost always charmless and unpleasant. It’s only the lie that is nice, beautiful and elegant”.

“When everything is available you don’t want anything. There’s nothing there, on the top, there’s vacuum. But in order to understand it – you need to visit it. So I visited it and got to know”.

“Any promise is from evil. Every time there’s something hided, embroidered, understated. The key points are always highlighted in a certain way… And this is so common and ordinary that is widely perceived by everyone as a norm. But it’s not a norm at all – it’s a deceit in any way. And deceiving is not good. So I don’t deceive anyone and in anything!”

“Yes, people are wicked. But you should be kind!”

“Our world is not as bad, hard-hearted and mercantile as many people perceive it. Is not redeemable. And people around are not so bad. Evil has not won yet once and for all. And fighting against it is possible and necessary!!”

“The world is bad? So, make it better!”