The thwarted pyramid: Air Force General and Colonel of the Strategic Missile Forces convicted of fraud

On June 4, the trial of a pyramid scheme "built" by businessman Alexander Burdakov, retired Air Force Major General Nikolai Fedyukovich and retired Strategic Missile Forces Colonel Mikhail Berezhny ended with an unexpectedly lenient verdict. Among the victims are military pilots, heroes of the Soviet Union and Russia. The total damage is more than 560 million rubles. The Dorogomilovsky District Court of Moscow found all three defendants in the case guilty of fraud on an especially large scale, but limited itself to suspended sentences for Fedyukovich and Berezhny. The only one who received a real sentence was Burdakov, who was considered the organizer of the pyramid scheme — he was sentenced to nine years in a penal colony. The victims, who are extremely dissatisfied with the verdict, intend to appeal the court's decision.

How was the meeting?

The Dorogomilovsky district Court has probably never seen such a large number of Air Force veterans — several dozen famous Russian pilots, as well as the wives and widows of pilots, attended the sentencing of Nikolai Fedyukovich, Mikhail Berezhny and Alexander Burdakov. Trim and severely dressed men and women talked quietly in the hallway, complained about the length of the process and recalled former colleagues.

The defendants behaved differently while waiting for the meeting to begin. Nikolai Fedyukovich, whom the prosecution's representative demanded to be sentenced to six years in prison in the debate, quietly consulted with lawyers. Alexander Burdakov, who was asked to be nine years old, was clearly in high spirits and, when he saw that the court employee was filming him on his mobile phone, he smiled broadly, immediately clarifying: "You're doing this as a keepsake, aren't you?" But the defendant did not wait for an answer — the meeting began.

Ten minutes later, the smile completely disappeared from the businessman's face: having found all the defendants guilty of especially large-scale fraud, the court sentenced Burdakov to nine years in a penal colony, as requested by the prosecutor.

A couple of minutes later, it turned out that the businessman was the only one of the defendants who received a real sentence. The other defendants, 75—year-old retired Air Force Major General Nikolai Fedyukovich and 80-year-old retired Strategic Missile Forces Colonel Mikhail Berezhny, were sentenced to suspended sentences: the first to six and a half years, the second to five. The court did not comment on its decision. Most likely, the age of the defendants and their previous achievements were taken into account when sentencing.

Some victims, as soon as they left the courtroom, began to loudly discuss the court's decision, expressing their dissatisfaction.

— They assured us in court that they paid us interest — there was no interest. They just gave money to some, and took it from others," retired aviation colonel Mikhail Chigorin told Izvestia.

The widow of one of the deceived pilots stressed that everyone was carrying money to Fedyukovich because he was a former colleague.

"They trusted only him—they wouldn't have given a penny to anyone else," she added.

The court partially or completely satisfied the claims of the victims, the size of which ranged from several tens of thousands of rubles to tens of millions.

The Nomadic Pyramid

As follows from the case file, the pyramid scheme organized by the convicts operated for more than ten years — from September 2011 to July 2023, until the arrest of the fraudsters.

Investors were promised large dividends from investments in stocks and bonds of Russian and foreign companies. The key role here was played by Major General Fedyukovich, who convinced many of his friends, former military pilots, to invest in the papers.

Among the contributors, according to Izvestia, were Hero of the Soviet Union Alexander Railyan, Heroes of Russia Alexander Klimov and Alexander Rudykh, Honored pilots of Russia Anatoly Volchkov, Valery Ryzhkov and Vyacheslav Patenko. In total, 156 people were recognized as victims in the case. The total damage, according to the estimates of the investigation, exceeded 560 million rubles.

At first, investors' funds were attracted to the Cyprus company Adfincom Ltd. The company was allegedly engaged in the trust management of deposits. The contracts with her were concluded at 24 Kutuzovsky Prospekt at the office of the consulting company RCB—Formula Business LLC, whose CEO at that time was Burdakov.

But already in 2015, the pyramid moved to Singapore, where the firms Financial Engineer Ltd and Innovation Tech—Centr were registered.

The investigation found that all these companies were used to conclude deliberately impossible investment contracts, and the pyramid organizers did not intend to fulfill their conditions, informing investors of false information.

After the expiration of the contracts, it follows from the case file, Burdakov, along with Fedyukovich and Berezhny, "misled the victims again," persuading investors to extend the contracts. To convince investors, the organizers of the scam showed them reports "containing false information about a high percentage of profit growth," and even paid some of the investors the interest they allegedly earned. However, in reality, the terms of the signed agreements "were not actually implemented," and the depositors' money was stolen and "distributed among the members of an organized criminal group."

The defendants' lawyers tried to convince the investigation and then the court that their clients had not created any pyramid scheme. The defense insisted that the accounts of Singapore companies contain assets worth more than 3 billion rubles intended for payments to customers. But due to the fact that the defendants are in jail, they allegedly cannot transfer the money. Another reason for the delay in transfers was the sanctions imposed against Russian banks.

However, both the investigation and the court did not find this defense version convincing. Nevertheless, two defendants in the case received only suspended sentences.

— Such a sentence is rather an exception. Usually, the court takes into account the position of the victims and rarely imposes a suspended sentence in the case of multi-episode fraud, if the damage is not compensated. As a rule, we are talking about a real term — from six years and above. In this case, the court focused on mitigating circumstances and made a decision based on them," lawyer Vitaly Kasparov commented on the situation.

According to the lawyer, given the position of the victims, there is a high probability of an appeal from the prosecutor's office. Then the verdict can be changed on appeal.