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Return of MMM amid fears, joy



In its first coming in 2015, millions of Nigerians invested in Mavrodi Mundial Moneybox, popularly referred to as MMM. The Ponzi scheme, the most popularget rich money schemes in Nigeria, had millions of Nigerians made money of it, but like every other Ponzi scheme before it, MMM crashed in 2016 with millions of Nigerians losing money. With the death of its principal founder in 2018, it was assumed the scheme had died a natural death, until it returned this year. Will the bubble burst again?EMEKA CHIAGHANAM ponders.
TWO young men sat at a corner of an article shop, with a look that depicts two business people that are about to close in on a business deal. They discussed about their investments in MMM. One of them anticipates bank alert for he expects someone to pay into his account.
While his friend was to register someone into the scheme and make payment into another person’s account, hoping for returns on his investment. A mutual friend soon joined them, they preached MMM benefits to him, tried convincing him to join the revived MMM family. The friend looked disinterested, perhaps disturbed by family matters other than any money making scheme.
MMM, Russian invented Ponzi scheme is back after millions of Nigerians lost their money before its collapse in late 2016. MMM coined its name from the first letters of the company founders’ surnames, brothers; Sergei Mavrodi and Vyacheslav Mavrodi and a woman Olga Melnikova. The acronym also stands for Mavrodi Mundial Moneybox (MMM). The scheme made entrance into the country in 2015 but became popular from late 2017. Its operators described it as a mutual aid fund where ordinary people help each other. It promises to enrich every participant in an unconventional means.
According to MMM operators, it matches people who are willing to assist or fund others who need funds. The amount an investor asks for in funding depends on the amount the person is able to assist people with. It allows someone to give out fund to people with the assurance that they will get assistance when they request for it. MMM makes new helpers (investors), also called ‘help’ to transfer money to other people who had provided help previously to earlier participants and the circle continues. In real sense, a pyramid that keeps going up and this may have consequences on the long run.
In monetary view, the initial scheme consists of financial network of investors, where members are promised to receive 30 percent back on all their investments. An investor pays another investor called the Guider in whose name a member registered on the platform 10 percent, new member receives 30 percent on his seed investment after 30 days, meaning the new entrant earns one percent on his investment every day. One major feature of the scheme in its second coming is that it promises 50 percent return on every investment though without 10 percent bonus for the initial investment. This time around, it records high percentage of women investors besides they are investing heavily, in hundreds of thousands of naira. It goes with the argument by the promoters of the scheme that the higher the volume of transactions the higher the returns. Unlike multi-level marketing (MLM), which has a real product to sell, making commission or gaining promotion is based on your sales, ponzi scheme is based on the principle of robbing Peter to Paul – early investors are paid their returns through the proceeds of investment by later investments, which has every potency to default.
The lure of MMM and other ponzi schemes pull strong. Some investors who lost money to the scheme in 2016 are re-investing in it. Some people attribute the interest in the scheme to the economic situation in the country. Others are quick to counter it, that it thrived in buoyant economics around the globe but for the greedy and those interested in get rich quick syndrome. Before the Ponzi gained worldwide circulation, there had been similar get rich quick money making schemes as far back as 1869 in the United States. It wasn’t economic downturn per se. Most investors of the scheme live above poverty level.
Initially, Ponzi targeted immigrant workers like himself promising clients 50 percent profit within 45 days, or 100 percent profit within 90 days, which he does by paying early investors using the investments of later investors. So popular was his scheme that nearly 75 percent of Boston’s police force invested in it. In its heyday, Ponzi was said to rake in near a million dollars per day from his scheme. Before it crashed in 2016, many people made money off the scheme. Even bank officials made handsome returns of their investments. Testimonies abound of those who used the proceeds from the scheme to build houses, buy cars, among other financial needs it solved.
Most apostles of MMM admit the risky nature of the schemer but argued that life is risky in itself. A computer programmer, Chikezie Obiakor, who refused to disclose his surname, admits that he made more than he lost money in the event of the scheme’s collapse in 2016, “I will keep participating in MMM. I’m not bothered whether it will collapse again. After all, people have invested in genuine businesses and got their fingers burnt in them. One must dare to venture, if I get caught in it, so be it. Life is a daring move,” he stated.
Another participant, EbeleOkoye, advised people to tread on caution. “If the scheme appeals to you, look for soft money to invest in it. And if you are fortunate to have a return on your investment, fine. Don’t stay long in the system. It will eventually crash. Once the system gets overcrowded in the long run, it will definitely crash as it did in 2016.”
At the collapse of the scheme in its first coming, it led to the death of some Nigerians. Many homes were wrecked, and businesses ruined. Gloria Samson, a trader also from Benue State took her life with the news of the crash of MMMnigeria. Gloria was said have invested a N400,000 loan, she procured into MMM. Gloria had confided in a foodstuff dealer identified as ‘Madam Kate that she had run into deep problem. That she had borrowed money and invested it in MMM and with the news that the scheme crashed, she threatened to run away. She was last seen on December 28, 2016. Gloria committed suicide by drowning at River Benue. The police recovered her body on January 2, 2017.
Another victim in Kubwa, a satellite town in the Federal Capital Territory,died after drinking insecticide following the crash of the MMM scheme. The young man, whose wedding was scheduled for December 2016 died on Monday 22, 2017 from complications arising from the poison. Few months toward his wedding, a friend introduced him to MMM, telling him the benefits involved. He initially invested N20,000 into the scheme and got 30 per cent the following month. The following month, he invested N50,000 and reaped 30 per cent commission and his full investment back. Despite his fiancée objection to investing huge amount of money to the scheme, as it was meant to finance their wedding, he decided to increase his investment so he could make more money. He went to his cooperative to obtain a loan. He invested N750,000 in November 2016, by December same year, the scheme collapse.
In another sad incident, a woman who operates daily contributory scheme called ‘Ajo’ in Yoruba parlance fled after losing customers N4.5m to ponzi scheme. The money, he hoped make profit from belonged to artisans and motorcyclists. According to Central Bank of Nigeria (CBN)’s, report, MMM defrauded Nigerians to the tune of N11.9 billion.
When the Nigerian government tried using the Nigeria’s Economic and Financial Crimes Commission (EFCC) to crack down on the scheme they couldn’t since the scheme doesn’t run a central bank account, rather the scheme’s participants transfer money to each other directly with no intermediaries. The CBN and other financial regulating agencies warned Nigerians to be careful about committing money to fraudsters that promised high returns at a time when the economy was in decline.
In a sensitization exercise held in 2017 in Kaduna, CBN, director in charge of corporate communications, Yusuf Wali, said, “I will also like to reiterate the position of the CBN on the need for the citizens to desist from unwholesome financial engagements in all Ponzi schemes. The Nigeria Electronic Fraud Forum made public a recent daunting report on the losses suffered by the subscribers which amounted to N11.9 billion in December 2016.”
The scheme generates no new profit, it works up participants to pay and invite new participants, and the moment it collapses, all the investors lose their money. As more people are lured into the scheme two years after it returned from collapse, other watches to see if the scheme has come to stay or will collapse again.

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