The biggest wonder money-making scheme in town is MMM, also known as the Mavrodi Mondial Movement. Even as recession bites harder on Nigerians, many are turning to this incredible money increasing scheme.
The way MMM works is fantastic; you get 30% returns on whatever you invest in it after 30 days. Based on returns that will be the best investment, more profitable than stocks or bonds, or even property.
However, there are many things that make MMM to be one of the most dangerous forms of investment and the first one is that it is really not an investment. There is no asset, product or brand to be invested in, hence its vague nature.
Another thing that makes MMM dangerous is that it does not really generate profit. The returns given to so-called investors is just money from other investors. When there is little or no money in the system, it crashes.
The question is not about if MMM will crash, it is about when it will crash. The scheme was started in Russia in 1989 by three Russians known as the Mavrodi brothers. The scheme crashed in Russia and other countries it has been to. Now it is in Nigeria and it is likely to also crash.
МММ global was a Russian company that perpetrated one of the world’s largest Ponzi schemes of all time, in the 1990s. A Ponzi scheme is a fraudulent investing scam which promises investors a large profit at little to no risk. The scheme generates returns for older investors by acquiring new investors. In 1994, MMM morphed into a successful Ponzi scheme.
In Russia, MMM took the society by storm as millions rush to put their money in the scheme that seemed too good to be true. It was really too good to be true as it eventually crashed in 1994, bringing millions of investors with it.
Trouble started in 1992 when MMM was accused of tax evasion, which led to the collapse of MMM-bank, making it difficult for the company to obtaining financing support for its operations.
The police closed the offices of MMM for tax evasion on July 22, 1994. The company tried to continue the scheme but the business shut. In the aftermath at least 50 investors who lost all of their money committed suicide.
Seigei Marvrodi , the eldest of the Mavrodi brothers was arrested in August 1994 for tax evasion. In 2007, a Russian court found him guilty of defrauding 10,000 investors out of 110 million rubles (4.3 million US dollars). He was sentenced to four and a half years in prison.
Following Mavrodi’s release from prison, he launched another pyramid scheme called MMM-2011 in January 2011. He asked investors to buy so-called Mavro currency units. However, in May 2012, he froze the operation and announced that there would be no more payouts.
Somehow, MMM resurrected in South Africa in 2015 and from there spread to other countries.. With the same business model as MMM-2011, it started operations in South Africa, promising a 30 per cent per month return through a social financial network. A number of South African banks are shutting down accounts they believe could be linked to MMM. In May, Capitec bank reportedly closed 2000 bank accounts linked to the MMM scheme. In September 2016, reports surfaced that the scheme had crashed in Zimbabwe and thousands of people lost their investment. It was later reported that it did not crash but the reward was slashed from 100 per cent to 20 per cent.
The Chinese government banned MMM in January 2016 on the grounds that it is a pyramid scheme, (Ponzi scheme). According to the government, it is not registered in the country (and it cannot be registered as it is a fraudulent scheme).