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Lorne Malvo was sent to find out who was blackmailing Stavros Milos. But instead why did he end up doing the things he did: take over the blackmail scheme and torment Stavros by exploiting his extreme religious beliefs?

I'm trying to understand Malvo's character. He didn't even want the money. He destroys bad people and the ones trying to get him, is that it? He destroyed Milos, Milos's wife's fitness instructor, Wrench, Numbers, Hess and the mob at Fargo but helped Lester. He let off Gus with a warning.

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Not sure his motivations have been answered by the show yet, but a good question nontheless. –  atticae Jun 4 at 18:54
    
I don't think the "help" he gave Lester would be called that by most people in Lester's shoes. It seemed designed to wreck Lester's life. –  RBarryYoung Jun 16 at 21:35

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I saw that Malvo gets consistently portrayed as entirely vague and entirely evil. The only solid characterizations for him are the cassette tapes he carries around of all these recorded conversations. It's hinted at a lot, but when we see him living as the dentist, we finally see an unequivocal scene where he is just sitting alone, listening to the tape, and having some kind of existential, sadistic joy at the horrific circumstances that Lester caused by killing his wife.

There was always a thought that perhaps the tapes are insurance, for blackmail, but I think this scene after his dinner party (as the dentist) shows that he really is just keeping them and listening to them for his own pleasure.

So if you keep this in mind and look back on the circumstances surrounding Milos, he saw an opportunity and he took it. I think it's nothing more than his own pleasure, to sadistically mess with this petty, dumb, and selfish man.

Originally he's there on behest of the crime organization he works for, and he's supposed to determine who the original blackmailer is. But when he realizes how dumb the whole situation is, and how he's been brought in to solve this "problem", it simply becomes a game for him.

I think it'd be too forgiving to ignore that this also ate up a LOT of the season's episodes, and it was a convenient way to write in these crazy situations while Lester's character was fleshed out and was digging deeper and deeper into his own sadistic insanity. Also it kept Malvo around Bemidji and Fargo, so that he could run into Wrench and Numbers, and Molly, and continually mess with the entire situation.

Because the whole thing started when he hit a deer and had to kill a cop and get to the hospital, where he meets Lester. He doesn't know or care who Sam Hess is, and doesn't even realize that his own organization is sent out to kill him for killing Sam Hess. Malvo's just sorta doing whatever he wants.

So, I think from the thematic sense of the show, the heart of the plot is really the first two or three episodes and the last two, and everything happening in-between, while I admit I loved it, is thematically sort of stretched-out for "fun". We get all the crazy characters and all the random circumstances and the build-up of coincidences, so that everything can finally come together for the final episode.

Milos was essentially just a big distraction, and if he could get a huge payday out of it, then it's doubly-enjoyable. And note that the show takes place in 2006 and Malvo goes around with essentially the same clothes and the same walkman and cassettes. He certainly didn't care about money or things, so he was doing it all to entertain himself in his sadistic nature.

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Malvo is an extremly odd character. You can say he is somewhat similar to the Joker in The Dark Knight. These are psychotic criminals without clear motives for a crime (The joker, obviously being way ahed of the curve). There are several instances from the show where Malvo does strange things to people. Some examples :

  1. when he check in to a motel, he provokes the motel bell boy to piss on owner's car. But when he is actually doing it, Malvo calls the owner which gets him caught.

  2. In last episode, when malvo is searching for Lester's address and meets the new occupants of Lester's old house. He scares the kids by telling them false stories.

Also think of it this way, why did he kill Sam Hess in the first place. Malvo had nothing to do with Lester or with Sam Hess.

Malvo is a psycho criminal in its true sense. In order to understand pyscho we should take reference from the Joker. In The dark Knight, Batman also becomes confused with Joker's intentions and motives and then Alferd tells him a story about a bandit in Burma who used to steal rubies but throw the off afterwards. Alfer sums it up as

Some people just want to see the world burn

I think, this piece from the dark knight can be used to understand Malvo.

So to answer your question, Why did Malvo do the things he did to Stavros Milos? because he is a pyscho. He often likes to hurt people without any reason.

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No motives for Joker? He tried to prove to batman that everyone else was like him. He proved that anyone can be corrupted by turning Harvey Dent. Strange things are nothing but unexplained things. Batman was confused when it came to Joker's intentions and now we don't understand Malvo's. –  Arjun U. Jul 16 at 7:18
    
Of course Joker had these motives, but these are psychotic motives which made sense only to him and not to others. I mean Malvo too had similar weird theories which he wanted to prove to others. for instance he manipulates Lester by telling that we still are what we were - Gorillas. Asking him to behave like one. He asks Gus why human eye sees more green which Molly answers, because we were predators. So malvo wants to prove this - the ancient pre historic nature of humans is still intact and we should act like that. He himself does that. –  Ankit Jul 16 at 8:39

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