“Scientific literacy is an intellectual vaccine against the claims of charlatans who would exploit ignorance” - Neil deGrasse Tyson.
“People lie and scam because you are too stupid to understand it.” - Deyth Banger.
“Never invest in any scheme that is based on a metaphor, or anything with the word, “next”, in it (e.g., “this kid is the next Elvis Presley”, “this will be the Lake Lucerne of the Southwest”). You will lose your shirt.” - Clifford Cohen.
he meaning of MMM is Mavrodi Mondial Movement, and there are about three million investors in MMM Nigeria.
Function and Duties of MMM:
MMM gives you a technical platform which helps millions of participants worldwide to connect those who NEED HELP to those who are ready to PROVIDE HELP, for FREE.
Purpose of MMM:
To reduce and break the chain of slavery in financial institution where depositor are being enslaved by their own money, where bankers lives large and healthy on our deposit while depositors lives on credit and loan.
To reduce stratification and reduce wide gap between the Rich and the poor indiscriminately.
How it Works.
In MMM you don’t have to make contracts or pledge your property. In MMM there are no lenders and no debtors.
Everything is very simple: one participant asks for help — another one helps.
The only thing that MMM demands from its participants is to be honest and kind to each other.
You ask for financial help when you need it, you give financial help when you are able to do it.
Where does the 30% come from?
It is gotten from the donations made by the community. For instance, Titi deposited #1,000,000 in the bank while Tola, Bola, Tunde came to withdraw their savings of #200,000, #150,000, #500,000 respectively meanwhile, an interest of 1,000, 1200, 2500 respectively was added to their money after it has lasted for more than 2 months in the bank. So, Titi’s money was used to pay the 3 of them regardless of ‘WHO, WHEN and HOW’. This implies that both interest and capital received are from the deposits made. Only in some exceptional case where money are fixed for a long time. So, in MMM, it’s similar, all rewards come from continuous PH (Provide Help - Payer) and GH (Give Help - Earner).
From the foregoing, and available information on its official website, a wise and smart Alec will ultimately deduce that it is a scheme that is full of conditions, sanctions, bogus bonuses and contradictions. It is simply a carefully crafted and fraudulent network marketing scheme that is only beneficial to the founders and a few “super agents”. All other participants are legitimately throwing their hard earned money into a bottomless hole.
Founders and History of MMM:
MMM was established in 1989 by Sergei Mavrodi, his brother Vyacheslav Mavrodi, and Olga Melnikova. The name of the company was taken from the first letters of the three founders' surnames.
Initially, the company imported computers and office equipment. In January 1992, tax police accused MMM of tax evasion, leading to the collapse of MMM-bank, and causing the company to have difficulty obtaining financing to support its operations. Faced with difficulties in funding its foreign trade, the company switched to the financial sector. It offered American stocks to Russian investors, but met with little success. Later, MMM-Invest was created for the purpose of collecting vouchers during privatisation. This effort was similarly unsuccessful.
MMM created its successful Ponzi scheme in 1994. The company started attracting money from private investors, promising annual returns of up to one thousand percent. It is unclear whether a Ponzi scheme was Mavrodi's initial intention, inasmuch as such extravagant returns might have been possible during the Russian hyperinflation in such commerce as import-export.
MMM grew rapidly. In February 1994, the company reported dividends of 1,000%, and started an aggressive TV ad campaign. Since the shares were not quoted on any stock exchange and the company itself determined the share price, it maintained a steady price growth of thousands of percent annually, leading the public to believe its shares were a safe and profitable investment.
An important factor in the scheme's success was word of mouth, but most of the company's success came from its extremely aggressive ad campaign, which appealed to the general public by using "ordinary" characters that viewers could identify with. The most famous of them, a "folk hero" of early 1994, was Lyonya Golubkov. Another notable marketing effort was a giveaway of free Metro trips to all Moscow citizens on a particular day. MMM also was one of the first well-known companies in Russia with a logotype and slogans ("Flying from shadow to the light" and others).
At its peak the company was taking in more than 100 billion rubles (about 50 million USD) each day from the sale of its shares to the public. Thus, the cashflow turnover at the MMM central office in Moscow was so high that it could not be estimated. The management started to count money in roomfuls (1 roomful of money, 2 roomfuls of money, etc.). On July 22, 1994, the police closed the offices of MMM for tax evasion. For a few days the company attempted to continue the scheme, but soon ceased operations. At that point, Invest-Consulting, one of the company's subsidiaries, owed more than 50 billion rubles in taxes (USD 26 million), and MMM itself owed between 100 billion and 3 trillion rubles to the investors (from USD 50 million to USD 1.5 billion). In the aftermath at least 50 investors, having lost all of their money, committed suicide.
Several organisations of "deceived investors" made efforts to recover their lost investments, but Sergei Mavrodi manipulated their indignation and directed it at the government. In August 1994 Mavrodi was arrested for tax evasion. However, he was soon elected to the Russian State Duma, with the support of the "deceived investors". He argued that the government, not MMM, was responsible for people losing their money, and promised to initiate a pay-back program. The amount ultimately paid back was minuscule compared to the amount owed. In October 1995, the Duma cancelled Mavrodi's right to immunity as a deputy. In 1996, he tried to run for Russia's presidency, but most of the signatures he received were rejected. MMM declared bankruptcy on September 22, 1997.
While it was believed that Sergei Mavrodi left Russia and moved to the United States, it is possible that he stayed in Moscow, using his money to change apartments regularly and employ a group of former special agents. With the help of a distant relative he started another pyramid scheme based around trading non-existent companies' stocks in a form of the "stock exchange game" on the company's site. Despite a bold-letter warning on the main page that the site was not a real stock exchange, between 20,000 and 275,000 people, according to various estimates, fell for the promised 200% returns and lost their money.
According to U.S. Securities and Exchange Commission, losses of victims were at least USD 5.5 million. Mavrodi was found and arrested in 2003. While in custody, Mavrodi was given until January 31, 2006 to read the documents in his fraud case against him (The criminal case consisted of 650 volumes, each 250-270 pages long). At the end of April 2007, Mavrodi was convicted of fraud, and given a sentence of four and a half years. Since he had already spent over four years in custody, he was released less than a month later, on May 22, 2007.
He later went on to creating yet another pyramid scheme called MMM-2011. The MMM scandal led to increased regulation of the Russian stock market, but the legacy of the fraud led many to become extremely suspicious of any joint stock companies.
In 2015 MMM began operating in South Africa with the same business model as MMM-2011, claiming a "30% per month" return through a "social financial network". The group was identified as a possible pyramid scheme by the National Consumer Commission and accounts of clients were later frozen by Capitec Bank. In response to mounting criticism and official investigations by state authorities in 2016 supporters of the South African MMM scheme staged a protest march in Johannesburg.
In 2016, MMM launched a website targeting the Nigerian audience. After operating for less than a year, just when Nigerians were preparing for the festive period, the unexpected happened - MMM Nigeria had suspended withdrawals. This is typical of Ponzi schemes to explode around the holiday season. Existing investors’ withdrawal requests increase while new investments drop. This was exactly what happened with MMM Zimbabwe. In an effort to stave off the inevitable collapse, MMM Zimbabwe froze affiliate withdrawals in August. In September the scheme reopened, however affiliate withdrawal requests were slashed by 80% (20 cents on every dollar in a withdraw request). This lasted about three weeks, before the scheme collapsed altogether. Losses in Zimbabwe were estimated to be in the thousands.
When MMM Nigeria reopened in January 2017, it introduced a new payment method, but no participant has been able to withdraw any money since then. Hmmmm! Like Zimbabwe and South Africa, Like Nigeria!
People worldwide must shine their eyes and think of better ways of making money. Those who fail to create opportunities in the absence of none, entangle themselves unnecessarily in a whirlwind of nothingness. Let me conclude by quoting a Chinese proverb that says: To know the road ahead, ask those coming back. Ask the Russians, the Chinese, the Zimbabweans, and the South Africans. Learn to grow your money progressively and productively.
God Bless Nigeria, And Long Live The Federal Republic Of Nigeria!!!
Shola Babs-Aro-Lambo presently works at The Embassy of Nigeria, Dublin. He is also a management and IT consultant; and a former president of NESALASU, 1989.