ABSTRACT
Criminal groups are very active in Stage Four of privatization as well. Hundreds o f voucher funds-investment agencies resembling W estern mutual funds-have sprung up to invest the vouchers o f Russians who lack confidence in their ability to choose wisely in the share market. But investors who take this route still have to pick their voucher fund, and in a num ber o f sensational cases, the funds have proven to be bogus. According to estimates for the last year-and-a-half alone, the different financial organizations in Moscow (banks, voucher funds and financial institutions) have cheated more than one million depositors, including approximately half a million citizens. The main portion o f those swindled have been pensioners. Among the fraudulent companies are the Indepen dent Oil Company, the Lenin Trade and Financial Corporation and the security company Aldzher. In mid-November 1993,1,500 angry investors
blocked traffic for two hours in central Moscow demanding that the government compensate them for their losses when the Technical Progress voucher fund shut its doors in July. As many as 30,000 investors may have been defrauded when the fund’s directors vanished. Two similar cases occurred in St. Petersburg early last year. There is no reason to believe that this outcom e was not foreseen, in considerable detail, by Yeltsin and his associates. But, as discussed above, openness to crime is an obvious feature of the path of Russian privatization.
