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. Last Updated: 07/27/2016

Judges Give No Breaks To Mavrodi

Sergei Mavrodi, the mastermind of the reputed MMM pyramid scheme, had his first day in court Friday, but unlike the millions who shelled out their savings for his shares, the judges in the case were not buying.


After a four-hour hearing, a court turned down a claim by Mavrodi that the search of his apartment had been illegal, said Vladimir Chistyakov, the chief hearing judge from the Sverdlovsky regional court.


Mavrodi, 39, appeared in court wearing the same clothes in which he was arrested Aug. 4, Chistyakov said. He was represented by four attorneys during the closed hearing, in which the Public Prosecutor's Office presented evidence of Mavrodi's financial dealings.


Mavrodi, who has declined to give evidence to police, has been held on suspicion of tax evasion in connection with the dealings of a subsidiary Invest Consulting. Officials say the company failed to report and pay taxes on revenue of 24.5 billion rubles ($12 million). Formal charges are expected to be filed Tuesday, Chistyakov said.


Alexander Soloshenko, an attorney for Mavrodi, said the money had not been Invest Consulting's revenues but a temporary transfer to the company's account from Mavrodi's voucher investment fund MMM Invest. He said the sum was transferred back to MMM Invest in April in the form of a dividend to shareholders and that all taxes had been paid on the funds.


In downtown Moscow, meanwhile, police spokesman Igor Tsyryulnikov said several protesters were detained Friday for "minor hooliganism" after attempting to picket the headquarters of the country's tax inspectorate.


Tsyryulnikov said the protesters would be held for a couple of days, fined and then released. Mavrodi supporters have been demonstrating throughout Moscow for his release most of the week, bringing their protests to the White House, Red Square and MMM headquarters.


The pyramid scheme crashed two weeks ago when the share value of MMM dropped from 115,000 rubles to about 1,000 rubles, wiping out the savings of millions of investors.


On Friday, Interfax published a poll showing that most Russians blamed the company and not the government for the scandal. In a poll of 1,594 people, 45 percent blamed the disaster on MMM and only 16 percent said the government was at fault.


Chistyakov of the Sverdlovsky regional court said after the charges were filed that the prosecutor could legally take another 1 1/2 years to bring the case to court.