Sergey Mavrodi: The Founder of 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 the leading computer equipment distributors in Russia. He was
a Deputy of the Russian Parliament. His literary works were published and they are sold in
bookstores. Two of his screenplays were madefv. 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 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!”