21 May
21May

Lilian Nurieva, previously serving as the Head of Networks at the Russian cryptocurrency investment fund Finiko, has been handed a three-year sentence for her involvement in defrauding private investors and her participation in an organized criminal group.

The scheme, totaling $55 million, is classified as the second-largest financial scam in Russia's post-Soviet history, as determined by the Federal Foundation for the Protection of Investors and Shareholders Rights.

Crypto Investment Fund Becomes Ponzi Scheme

In 2021, Russian authorities launched an investigation into the 'crypto investment fund' Finiko for fraud and organized crime. According to the inquiry, the fund was a Ponzi scam that grabbed millions of dollars from investors.

From 2018 to 2021, Finiko was a pyramid scheme disguised as a cryptocurrency fund to investors. Kirill Doronin, the scam's chief organizer and beneficiary, toured across the country providing master courses to thousands of customers.

Doronin and his colleagues formed a criminal community to systematically pilfer citizens' money. The thieves approached potential clients, claiming to have devised a "unique automatic profit generation system" that "guaranteed" enormous profits in cryptocurrencies such as Bitcoin.

Initially, investors with Finiko received dividends and had the option to withdraw their funds in Bitcoin. However, the situation took a drastic turn when Finiko's cryptocurrency token began depreciating in 2021. Within a month, the company's offices suddenly closed, and its website was shut down, leaving investors with nothing.

Donorin, the figurehead of Finiko, attempted to reassure investors by attributing the firm's troubles to technical difficulties. However, it later emerged that his associates had absconded with investors' funds.

An investigation revealed that many clients had taken out loans or liquidated assets such as houses to invest in the fraudulent scheme. The investment fund was found to operate as a Ponzi scheme, where returns to earlier investors were funded by the capital of new investors.

The Ministry of Internal Affairs of the Russian Federation (MDV) estimated that Finiko had defrauded over 10,000 individuals and embezzled more than 5 billion rubles, equivalent to around $55 million.

Sentenced: Finiko's First Executive

One of Finiko's executives, Lilia Nurieva, was found guilty by the Vakhitovsky District Court of Kazan of misleading investors. Nurieva, a major player in the cryptocurrency scam, received a "light" sentence in exchange for helping the prosecution.

Due to his involvement in organized crime and fraud, the former executive was first given a four and a half year term. Nevertheless, because her pre-trial detention period will be factored into her sentence, Nurieva will only be sentenced to three years in prison.

Prosecutors asked for six and a half years of imprisonment for the Russian executive, but a pre-trial agreement allowed the former Head of Networks to shorten her sentence, according to local newspapers. Through this agreement, Nurieva was able to avoid  facing up to ten years in prison. 

Additionally, the executive fully confessed to the charges and cooperated with the investigation, opting to be tried separately from the other defendants. Her lawyer, Maria Belousova, acknowledged the fairness of the prosecutors' accusations against her client. Belousova highlighted that Nurieva was the sole defendant who had invested her own money in the scheme.

According to Belousova, Nurieva initially invested 40 million rubles in the investment fund before becoming involved in the criminal organization. Belousova explained that when Nurieva joined the association, there were illusions that it was not criminal or illegal. However, clarity on the nature of the organization emerged during interactions with senior executives.

Meanwhile, the other ten defendants, including Doronin, are awaiting trial. The Prosecutor General's office approved their indictment on April 27 and forwarded it to the Vakhitovsky court. These defendants are also accused of organizing a criminal association and engaging in large-scale fraud committed by an organized group.

May 2024, Cryptoniteuae

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