Crypto Investment Fund Exec Sentenced To 3 Years For $55 Million Scheme

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
$55
million
pyramidal
scheme
is
considered
the
second-largest
financial
scam
in
Russia’s
post-Soviet
history
by
the
Federal
Foundation
for
the
Protection
of
Investors
and
Shareholders
Rights.

Crypto
Investment
Fund
Turns
Ponzi
Scheme

In
2021,
Russian
authorities
began

investigating
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
pyramidal
scheme
presented
as
a
crypto
fund
to
investors.
The
scam’s
main
organizer
and
beneficiary,
Kirill
Doronin,
traveled
the
country
offering
master
classes,
attracting
thousands
of
clients.

Alongside
his
accomplices,
Doronin
created
a
criminal
community
to
systematically
embezzle
citizens’
money.
The
criminals
would
approach
potential
clients,
stating
they
had
developed
a
“unique
automatic
profit
generation
system”
that
“guaranteed”
massive
returns
in
cryptocurrencies,
including
Bitcoin.

Users
would
receive
their
dividends
at
first
and
be
able
to
withdraw
their
money
in
BTC.
However,
things
started
to
take
a
left
turn
for
investors
after
Finiko’s
crypto
token
started
to
devalue
in
2021.
In
a
month,
the
firm’s
offices
abruptly
closed,
and
its
website
was
shut
down,
leaving
investors
empty-handed.

Donorin
assured
investors
that
the
crypto
fund
was
experiencing
technical
failures,
but
it
was
later
established
that
his
associates
had
already
fled
the
country
with
investors’
money.

According
to
the

investigation,
many
clients
had
taken
loans
or
sold
their
houses
to
invest
in
the
fraudulent
fund.
It
was
revealed
that
the
investment
fund
functioned
as
a
Ponzi
scheme,
where
old
clients
received
payments
from
the
new
investors’
money.

At
the
time,
the
Ministry
of
Internal
Affairs
of
the
Russian
Federation
(MDV)
estimated
that
the
firm
had
scammed
over
10,000
individuals
and
stolen
over
5
billion
rubles,
around
$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,
was
given
a
“mild”
sentence
for
collaborating
with
the
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
her
pre-trial
detention
time
will
be
counted
as
part
of
the

sentence.

According
to
local
reports,
prosecutors
requested
six
and
a
half
years
for
the
Russian
executive,
but
the
former
Head
of
Networks
was
able
to
reduce
her
time
due
to
a
pre-trial
agreement.
This
deal
allowed
Nurieva
to
avoid
facing
up
to
ten
years
in
prison.

Moreover,
the
executive
fully
admitted
to
the
charges
and
collaborated
with
the
investigation,
facilitating
to
be
tried
separately
from
the
other
defendants.
Her
lawyer,
Maria
Belousova,
stated
that
the
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.

Per
Belousova,
the
former
Finiko
executive
invested
40
million
rubles
in
the
investment
fund
before
becoming
part
of
the
organization:

When
she
joined
the
criminal
association,
there
were
illusions
that
it
was
not
criminal
and
illegal.
Then,
during
communication
with
top
executives,
clarity
came.

The
other
ten
defendants,
including
Doronin,
have
yet
to
be
tried.
The
Prosecutor
General’s
office

approved
their
indictment
on
April
27
and
sent
it
to
the
Vakhitovsky
court.
The
defendants are
also
accused
of
organizing
a
criminal
association
and
fraud
on
a
large
scale
committed
by
an
organized
group.

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