Lilian Nurieva, the former network head of Russian cryptocurrency investment fund Finiko, has been sentenced to three years in prison for defrauding individual investors and participating in a criminal organization.
The $55 million pyramid scheme is considered the second-largest financial fraud in Russian history after the collapse of the Soviet Union by the Federal Foundation for the Protection of Investor and Shareholder Rights.
Cryptocurrency investment fund turns into Ponzi scheme
In 2021, Russian authorities began investigating ‘cryptocurrency investment fund’ Finico on charges of fraud and organized crime. According to the investigation, the fund was a Ponzi scheme that siphoned off millions of dollars of investor funds.
From 2018 to 2021, Finiko acted as a pyramid scheme offering cryptocurrency funds to investors. The main organizer and beneficiary of the scam, Kirill Doronin, traveled around the country giving master classes and attracting thousands of customers.
Together with his accomplices, Doronin created a criminal community to systematically embezzle citizens’ money. The criminals said they had developed a “unique automated monetization system” that approached potential customers and “guaranteed” huge profits in cryptocurrencies, including Bitcoin.
Users will initially receive dividends and then be able to withdraw their money in BTC. However, things started to take a left turn for investors in 2021 after the value of Finiko’s cryptocurrency token began to decline. Within a month, the company’s office suddenly closed and its website was shut down, leaving investors empty-handed.
Donorin assured investors that the cryptocurrency fund was experiencing a technical failure, but it was later confirmed that his associates had already left the country with investors’ money.
The findings showed that many customers took out loans or sold their homes to invest in fraudulent funds. It was revealed that the investment fund acted as a Ponzi scheme in which existing customers received payment from new investors’ money.
At the time, the Russian Federation’s Ministry of Internal Affairs (MDV) estimated that the company defrauded more than 10,000 individuals and stole more than 5 billion rubles (about $55 million).
First Finiko officer sentenced
One of Finiko’s executives, Lilia Nurieva, was found guilty by the Vakhitovsky District Court in Kazan of defrauding investors. Nurieva, a key participant in the cryptocurrency scheme, received a ‘light’ sentence for cooperating with prosecutors.
The former executive was originally sentenced to four years and six months in prison on charges of fraud and participation in a criminal organization. However, Nurieva will only be sentenced to three years in prison because the period of pre-trial detention is included in her sentence.
According to local reports, prosecutors had sought a prison sentence of six years and six months for the Russian executive, but the former network chief was able to get his time reduced through a pretrial agreement. The deal allowed Nurieva to avoid up to 10 years in prison.
Additionally, the executive in question fully admitted to the charges and cooperated with the investigation so that he could be tried separately from the other defendants. Her lawyer, Maria Belousova, said the prosecution’s accusations against her client were “fair.” She also pointed out that Nouriba was the only one of her defendants to have invested her own money in the scheme.
Former Finiko executive Per Belousova invested 40 million rubles in the investment fund before joining the organization.
When she joined a criminal group, she had the illusion that it was not a crime, but illegal. Then, clarity emerged during communication with top management.
The remaining 10 defendants, including Doronin, have not yet been tried. The Prosecutor General approved their indictment on April 27 and sent it to the Bakitovsky Court. The defendants are also accused of organizing a criminal group and systematically committing large-scale fraud.
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