Moscow people protest over government's standstill in housing fraud scheme

Demonstrators fought with police outside Russia 's government headquarters Friday as they protested what they called a nationwide scam that robbed tens of thousands of their life savings and left many homeless. The crowd of nearly 1,000 called on the government to take up their case after a private company calling itself the Social Initiative and Co. lured tens of thousands with a promise of affordable, new housing between 2003 and 2005.

Protesters say more than US$500 million (392 million) was sucked up from as many as 50,000 investors throughout Russia in the scam. Pensioner Tamara Misteiko said she had borrowed 515,000 rubles (15,000; US$19,000) from her children in the hope of upgrading her apartment in 2004. "How can I look them in the eyes? I told them this will be yours," she said.

Demonstrators surged through police barricades near the Russian government building called the White House and began pitching tents on grass near the building. When camouflaged riot police tried to tear down the first tent, they yelled "Shame!" and police backed down after briefly scuffling with some demonstrators. The predominantly elderly crowd later resisted another attempt by about 40 riot police to move them, and black-clad Interior Ministry troops then took up place along one side of the crowd with muzzled attack dogs.

Local authorities in 60 cities awarded Social Initiative and Co. plots of land to build apartment blocks, and the company boasted a swathe of real estate awards as well as glowing coverage in the national press including the government newspaper Rossiskaya Gazeta. But none of the promised housing projects went further than the foundations. The company's president, Nikolai Karasyev, has been jailed on suspicion of fraud, though he has not been charged, and the company now faces bankruptcy procedures.

Investors say the government has given them no help. Misteiko said she won a court decision this year for reimbursement, but that she has heard nothing more from court bailiffs about compensation. Protesters say the scam is a growing embarrassment for the government and could undermine faith in a government project aimed at supporting the construction of reasonably priced housing and developing mortgages.

The "Affordable Housing" project is one of several so-called national projects that will see a part of Russia 's oil windfall channeled into improving living standards in the country. In the 1990s, thousands of Russians were bilked by bogus investment schemes and took to the streets of Moscow to protest. But Russia 's newfound economic stability and President Vladimir Putin's tight political control have made such public shows of anger a rarity.

"They tell us every day that things are getting better," said Oleg, 33, who invested US$40,000 to move his family into a bigger apartment in a Moscow region town. Like many Russians wary of identifying themselves to the media, he declined to give his last name. "But in our country you can only rely on yourself", reports the AP.