The Dolina Effect: How a Singers Scam Shook the Foundation of Russias Housing Market

A prominent singer in Russia, known for her loyalty to Putin, falls victim to a fraud scheme when she unwittingly sells her apartment to a deceived buyer. Both parties realize they’ve been misled. Following a formal complaint, a court decides that the apartment must be returned, but the financial restitution remains unforthcoming.

The situation has sent shockwaves through Russia’s real estate market.

This absurd saga, which has captured national attention over the past few days, peaked as hundreds of thousands tuned in for the final court session.

As the ongoing conflict in Ukraine approaches its four-year milestone, the Dolina scandal raises the question: does this incident illustrate that public outcry can influence government actions, or is it merely a distraction?

The narrative began in the spring of 2024.

Larisa Dolina, a 70-year-old sanctioned pop icon with striking platinum hair and a dazzling wardrobe, recognized early on the advantages of aligning with political movements, joining the pro-Putin United Russia party in 2003. In recent years, she has performed in the annexed Donetsk region.

Last year, Dolina was contacted by individuals posing as Federal Security Service (FSB) agents, claiming they needed her assistance in thwarting criminal enterprises. She complied, unaware that these were actually fraudsters looking to exploit her.

Over several months, the scammers convinced her that she needed to sell her upscale Moscow apartment, falsely claiming it was in danger of being seized, and instructed her to transfer the sale proceeds to a «safe» account.

In a twist, the scammers had found a genuine buyer, 35-year-old entrepreneur Polina Lurye, who purchased the apartment for 112 million rubles (approximately $1.4 million).

Dolina eventually uncovered the fraud and publicly declared in August 2024 that she had been duped.

“Preliminary evidence suggests that the fraudsters may be located in Ukraine,” Dolina alleged, though she did not provide evidence. In a criminal proceeding this January, the impersonators were ordered to compensate her nearly 70 million rubles (around $875,000).

But what recourse was there for Lurye, who lost her investment?

Three courts deemed Dolina a victim of deception and annulled the sale, allowing her to retain the apartment while leaving Lurye without her funds.

Lurye objected. As public anger grew over the incident, the case ascended to Russia’s Supreme Court, which, in a livestreamed ruling viewed by over 230,000 individuals, overturned the lower courts’ decisions.

The Supreme Court ruled that Lurye was the legitimate owner of the apartment.

In its final assessment, the court stated that Dolina’s actions stemmed from a “shift in mental state,” which rendered her unable to comprehend the fraud or foresee the implications of her decisions in legally significant situations.

The announcement that Dolina would keep her apartment ignited a strong public backlash.

Many Russians took to social media to express their dissatisfaction over what was perceived as an injustice against Lurye, who is seen as a wronged buyer and single mother. A survey conducted by the news outlet Lenta.ru indicated that over 95% of participants condemned Dolina’s actions.

The scandal has transitioned from casual conversation to a significant influence on Russia’s real estate landscape, a phenomenon now referred to as the “Dolina effect.”

The prevailing thought is this: if Russian courts have established a precedent allowing sellers to reclaim their properties post-complaint while retaining their profits, it poses a considerable risk for buyers.

According to Russian media, legal disputes regarding property transactions have surged by 15-20% in the past year, as noted by the Russian Guild of Realtors.

“Indeed, the volume of court cases involving contested property sales has increased,” commented Anzhelika Alshaeva, the commercial director of KVS Group, to a St. Petersburg real estate publication. “Often, the sellers are elderly women who either fell victim to fraudsters or were complicit in fraudulent activities themselves.”

Many across Russia’s eleven time zones reported experiencing situations reminiscent of the “Dolina effect.”

Among them is the Kotkov family from the Volgograd region, who bought an apartment in Moscow for 9 million rubles ($113,000) in cash, only to discover that the previous owner claimed to have been duped by scammers. They are now embroiled in a legal dispute concerning the property’s ownership.

The Supreme Court’s ruling in favor of Lurye may alleviate some doubts in the real estate market. However, for Dolina, the end of the year is looking bleak.

Now that Lurye legally controls the apartment, she has reportedly requested that the former owner be evicted, with authorities announcing a hearing for December 25.

Dolina may opt to vacate voluntarily. If she does, the eviction claim is likely to be dismissed, according to the RBC news agency.

In the meantime, the four fraudsters responsible for the apartment sale are incarcerated, having received sentences ranging from four to seven years.

Who bears the blame in this mess? Many attribute fault to Dolina, arguing that even if she didn’t initiate the issue, her case illustrates the preferential treatment elites receive from the government in contemporary Russia.

However, authorities contend that amid Russia’s grueling war in Ukraine, even a property dispute can be traced back to the nation’s conflict with the West.

«We must analyze this situation, among other things, through the lens of what our adversaries intend to do to us,” said Foreign Ministry spokeswoman Maria Zakharova in a recent interview. “One approach they’re currently employing is to incite discord among our populace.”