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. Last Updated: 07/27/2016

Police Seize Investment Fund Cash

Police seized 7 billion rubles ($3.3 million) in cash at Irkutsk airport Tuesday that they said belonged to an investment company which suspended its operations over the weekend, Itar-Tass reported.

The development came as concern grew over the regulation of Russia's securities markets in the wake of the arrest of the head of the alleged MMM pyramid scheme and the collapse in the value of its shares which has left millions of investors angry.

Local police said the six bags stuffed with 1,300 kilograms of cash were to have been flown from Irkutsk in Siberia to Volgograd in central Russia, where the investment company Russian House of Selenga is headquartered, the news agency said.

Irkutsk's deputy governor, Vitaly Balandin, said there was no documentation for the cargo, but that the cash had been delivered to the airport by representatives of a local branch of the investment company, the news agency said. Officials in Irkutsk could not be reached for comment Tuesday.

The Russian House of Selenga, a company that advertises prominently in newspapers and on television promising high returns on deposits, suspended its operations over the weekend but pledged to return its 1.5 million investors' money.

Central Bank spokesman Alexei Sitnin said in an interview Tuesday that a Volgograd court ruled a year and a half ago that the firm's operations were illegal, because the company was operating like a bank but lacked the proper license.

Kuzma Shalenkov, who heads the financial crime unit at the Interior Ministry, said that shifting cash from one city to another to delay a collapse was a common practice for suspicious investment companies.

"They keep shifting money from one place to another until they collapse," Shalenkov said. But he said his department had not received any information on the cash seized in Irkutsk.