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.
