Bleak Christmas for three million Nigerians as MMM crashes

Christmas and New Year celebrations promise to be  sour for more than three million Nigerian participants in the popular Mavrodi Mondial Moneybox (MMM) ponzi scheme, as the promoters of the scheme announced yesterday that they have suspended new payouts to subscribers.

Before this development, many hopeful Nigerians had raised their stake in the MMM scheme in anticipation of more money to be spent during this Yuletide season. Unfortunately, members of the scheme were shocked on Tuesday, to find a message, instead of their statement of account, informing them of the decision to freeze withdrawal till the New Year.

“One-Month Freezing of Confirmed Mavros,” read the title of the message.

“Dear members! As usual, in the New Year season the System is experiencing heavy workload. Moreover, it has to deal with the constant frenzy provoked by the authorities in the mass media. The things are still going well; the participants feel calm; everyone gets paid – as you can see, there haven’t been any payment delays or other problems yet – but!.. it is better to avoid taking risk. Moreover, there are almost three weeks left to the New Year. Hence, on the basis of the above mentioned, from now on all confirmed Mavro will be frozen for a month.

“The reason for this measure is evident. We need to prevent any problems during the New Year season, and then, when everything calms down, this measure will be cancelled. (Which we will definitely do… We hope for your understanding, administration.”

MMM has been in Nigeria for over one year, and has become one of the fastest growing ponzi schemes in the country’s history because of its use of technology to build a network of people giving money to each other without offering any form of value.

MMM promised returns as high as 30 percent but when annualised, was in excess of 360% in investment returns for those claiming to be “providing help” and “getting help” to and from people they did not know.

Following the MMM crash, news spread on social media of how an  “about to wed” man drank insecticide in Benue State.

Also, the Lagos Emergency Management Agency (LASEMA) has issued suicide prevention notice. LASEMA also advised Lagos residents to dial 112 if any one attempts suicide due to the MMM crash.

The crash of MMM comes one month after members of the House of Representatives warned Nigerians to keep off MMM.

The Securities and Exchange Commission (SEC), the Central Bank of Nigeria (CBN) have all warned Nigerians about the MMM scheme. The House of Representatives besides issuing  a warning, also ordered an investigation into the operation of the MMM scheme.

Two days ago, Sergey Mavrodi, founder of MMM, wrote an open letter to the Federal Government, defending the scheme, claiming it was “restoring social justice” since the Federal Government was not concerned about the welfare of its citizens.  “MMM is their only means of livelihood,” Mavrodi had said.

“I knew it was going to crash and I thought I could quickly make my money before the crash. Now I am in big trouble,” said an MMM participant who did not want to be named. The single mother of two said without disclosing the extent of her investment in the scheme.

Affected Nigerians in the scheme had their investment in the range of N4billion and these participants used their bank accounts to pay and receive monies.

(a pyramid scheme) is a Russian company and is reputed to have perpetrated one of the world’s largest Ponzi schemes of all time in Russia in the 1990s, which also crashed. By different estimates from 5 to 40 million people lost up to $10 billion.

Established as far back as in 1989, the name of the company was taken from the first letters of the three founders’ surnames: Sergei Mavrodi, his brother Vyacheslav Mavrodi, and Olga Melnikova. In 2007 Mavrodi was found guilty in a Russian court of defrauding 10,000 investors out of 110 million rubles ($4.3 million).

The MMM Global website lists localized Ponzi schemes running in India, Indonesia, Malaysia, Hong Kong, Bangladesh, Philippines, Thailand, Kenya, Republic of South Africa, Japan, Eastern Africa, and Peru.

 

Iheanyi Nwachukwu