Get-rich-quick promises take Russia by storm: President Yeltsin takes on the free-market conmen, writes Andrew Higgins in Moscow

OF ALL the hustlers making a killing on Russia's lurch to capitalism, few have done so well and none have become so well known as Leonid Golubkov, a skinny, 40- year-old with greasy hair and a fat brother who guzzles vodka on prime-time television in a string vest. Mr Golubkov - better known to millions of Russians simply as Lyonya, the affectionate form of Leonid - is as successful as they come.

He flew to San Francisco this week to cheer on his country's team in the World Cup (They scored six goals against Cameroon). He bought his wife, Rita, a fur coat and is looking at property in Paris. He even caught the eye of the President, Boris Yeltsin. A front-page headline in Argumenti i Fakti, a popular magazine, promises to answer the question on the nation's lips: 'Who is Lyonya Golubkov?' A Moscow shop selling Italian shoes runs advertisements: 'Lyonya Golubkov Buys Boots for Rita from Us.' Not bad for a yokel from Siberia living only on his wits - which, even his many admirers admit, are somewhat less than razor-sharp.

Leonid Golubkov is by far Russia's best-known success story, a household name and inspiration to millions who like to imagine themselves copying his triumphs on the market. There is only one problem with Lyonya: he does not exist. He is the creation of Russia's biggest and, most probably, riskiest dream merchant, a slick and highly secretive investment company called MMM.

He strolled into Russia's living rooms as star of a TV advertising campaign, a series of fantasy skits also featuring his chocolate- obsessed wife, Rita, a drunken brother, a lonely spinster called Marina and a menagerie of other sad-sack no-hopers who strike it rich by buying into MMM.

The allure of 3,000 per cent return has created more than 5 million MMM shareholders since the start of the year. So far, they are happy. Shares priced at 1,600 roubles (about pounds 5) in February now sell for nearly 70,000.

Less happy are those interested in encouraging the free market, not Russian roulette. The real force fixing MMM's share price is not the market but MMM itself, which operates sales offices around Moscow to keep the wild carousel turning. 'At some point bubbles burst and we are getting there,' says Maxim Boiko, head of the Russian Privatisation Centre.

Ever since Russia launched a gargantuan sell-off of state assets in October 1992 by issuing each citizen with a 'privatisation voucher' worth 10,000 roubles and redeemable for shares, the country has been awash with the promises and nostrums of hustlers, flim- flam artists and even a few solid investors. This first stage of the programme - which put 70 per cent of Russian industry into private hands - ended this week. From now on, investors will have to buy into companies with real money instead of vouchers.

But how many ordinary people will want to invest in a factory offering only the possibility of modest profit some time in the future when Leonid Golubkov is promising the earth, or at least a house in Paris, by morning?

President Yeltsin, worried by MMM's appeal in a land of perpetual dreamers and market innocents, singled out Lyonya for public rebuke: 'We have too many touts of every ilk who promise fantastic dividends in the future or homes in Paris. But very often there is no basis for this. They are just conning the people.' The President also issued decrees against unscrupulous advertising and crooked investment funds.

MMM, though, survives and thrives: its shares account for about a third of all transactions on the Russian Commodities and Raw Materials Exchange, and for up to half of all deals on smaller exchanges. A talking clock run by the state-run telephone company tells the time only after announcing the day's prices for MMM.

So secretive is MMM it passes over all criticism in silence. Requests for interviews with its director, Sergei Mavrodi, or any other official, got nowhere. Even the actor who plays Leonid Golubkov on television, Vladimir Permyakov, has been sworn to secrecy.

(Photograph omitted)