After we published a detailed report on the popular Ponzi Scheme or pyramid fraud called MMM, we have received a flurry of replies from our readers, many of whom are current members of MMM, prospective and the general public.
For the upteenth time, we are restating our stand that MMM is a Ponzi Scheme that will soon go burst, it is just a matter of time.
This is because the company does not invest the money donated by members and it gives 30% to anyone who join after 30 days. This is impossible because the interest rate it too high and no bank and even the Central Bank can give such interest to anyone.
MMM is paying the 30% with funds contributed new people that joined the scheme. As soon as the number of people that joining the scheme reduces, MMM will no longer be able to pay people 30% and even principal amount contributed by all members who are already waiting in line to ‘receive help’.
It is also a fraud because, Sergei Mavrodi the owner cannot be trusted not to have have created fake members requesting for help, most MMM members will not know and because nobody is sending money to a central MMM account but directly to members, it is easy for him and his people to create fake identities and members who will be requesting for help just like everyone. The fact that he alone is the creator of the algorithm that dictates who gives and receive help, he cannot not be trusted not to corrupt the process.
This is the more reason why MMM will not last long. It is open to abuse, unregulated and does not have the backing of the government. MMM has failed in China, South Africa and many countries. Sergei Mavrodi is a convicted criminal in Russia, he has been on the run for many years.
If you truly want to invest your money wisely, do not be greedy, start a legitimate business and grow it withyour sweat or go and invest with legally-licenced banks, insurance companies and investment banks. They will not promise you what they cannot deliver.
For the avoindance of doubts, we are reffering you to the Securities and Exchange Commission, SEC, the government agency that regulate all capital markets and collective investment schemes in Nigeria.
Here is what they say about pyramid scheme such as MMM:
Pyramid schemes are investment scams carried out by unregistered and fraudulent “investment Operators” who illegally collect money from the public. Their sole purpose is to defraud the general public of their hard earned money!
They deceive people with their incredibly unrealistic interest rates and returns, making them believe it is an opportunity to earn fast money. Eventually, they are unable to pay returns and they disappear with the money. They sometimes begin to operate again under different names at another location.
A word is enough for the wise.