Lilian Nurieva, former head of networks at Russian crypto investment fund Finiko, has been sentenced to three years for defrauding private investors and participating in an organized criminal group.
The Federal Foundation for the Protection of Investors and Shareholders' Rights considers the $55 million pyramid scheme to be the second largest financial scam in Russia's post-Soviet history.
Crypto Investment Fund Turns Ponzi Scheme
In 2021, Russian authorities began doing research the 'crypto investment fund' Finiko for fraud and organized crime. According to the investigation, the fund was a Ponzi scheme that took millions in investors' money.
From 2018 to 2021, Finiko served as a pyramid scheme presented as a crypto fund to investors. The main organizer and beneficiary of the scam, Kirill Doronin, traveled the country offering master classes, attracting thousands of clients.
Together with his accomplices, Doronin created a criminal community to systematically embezzle citizens' money. The criminals would approach potential clients and claim that they had developed a “unique automatic profit generation system” that “guaranteed” massive returns on cryptocurrencies, including Bitcoin.
Users would receive their dividends at the beginning and could withdraw their money in BTC. However, things began to turn left for investors after the Finiko crypto token began to devalue in 2021. Within a month, the company's offices abruptly closed and its website, leaving investors with the empty hands.
Donorin assured investors that the crypto fund was experiencing technical glitches, but it was later learned that his associates had already fled the country with investors' money.
According to the investigation, many clients had taken out loans or sold their homes to invest in the fraudulent fund. It was revealed that the investment fund operated as a Ponzi scheme, where former clients received payments from new investors' money.
At the time, the Ministry of the Interior of the Russian Federation (MDV) estimated that the company had defrauded more than 10,000 people and stolen more than 5 billion rubles, about $55 million.
First Finiko executive sentenced
Lilia Nurieva, one of Finiko's executives, has been found guilty of defrauding investors by the Vakhitovsky District Court of Kazan. Nurieva, a key participant in the crypto scheme, received a “light” sentence for collaborating with prosecutors.
The former executive was originally sentenced to four and a half years for committing fraud and participating in an organized criminal association. However, Nurieva will only serve three years in prison as his pretrial detention time will be counted as part of the prayer.
According to local reports, prosecutors requested six and a half years for the Russian executive, but the former Networks chief was able to reduce her time thanks to a pre-trial agreement. This agreement allowed Nurieva to avoid facing up to ten years in prison.
Furthermore, the executive fully admitted the charges and collaborated with the investigation, facilitating his trial separately from the rest of the defendants. Her lawyer, Maria Belousova, said prosecutors' accusations against her client were “fair.” She also noted that Nurieva was the only one among the defendants who had invested her money in the scheme.
According to Belousova, the former Finiko executive invested 40 million rubles in the investment fund before joining the organization:
When he joined the criminal association, there were illusions that he was not criminal or illegal. Then, during communication with senior executives, clarity came.
The other ten defendants, including Doronin, have not yet been tried. The Attorney General's office approved her indictment on April 27 and sent her to the Vakhitovsky court. The defendants are also charged with criminal conspiracy organization and large-scale fraud committed by an organized group.
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