Less than seven months after MMM Cooperation purportedly launched on the Internet, the Ponzi scheme might be in a ‘pre-collapse’ state, at least for its Nigerian chapter.
Investors of MMM Cooperation were shocked after those on the waiting line to withdraw funds were blocked from doing so.
For starters, MMM Cooperation is copycat of MMM Global and its appendage, MMM Nigeria which collapsed in 2016. Owners and promoters of MMM Cooperation or MMMC as it is fondly called, claimed in the welcome message that the new scheme is in commemoration of MMM Global, a brainchild of the late founder, Sergey Mavrodi.
While there are no proof that owners of MMM Cooperation are direct beneficiaries of Mavrodi’s MMM Global, there website which mimicked the real MMM website has all the branding and digital assets of its ‘parent company’.
However, there are concerns that this scheme could be heading for the rocks so soon.
An inside source at MMM Cooperation said the administrator of the scheme have suspended withdrawals while assuring that it is working on modalities for withdrawals.
It is very typical of Ponzi schemes to give excuses or downplay a grim situation whenever there is a major problem.
As at the time of writing this report, there are no updates as to when withdrawals will be allowed.
A Ponzi scheme analyst with close links to MMM Cooperation promoters said the scheme could have up to 7 million members since it started operations early this year. According to her estimate, Nigerian investors could account for more than 30% of its members.
He concludes that it was impossible for MMM Cooperation to fulfill its return on investment guarantee of up to 50%. Its predecessor, MMM Global only promised about 30% RoI before it collapsed in Nigeria, South Africa, Zimbabwe, Ghana and even China where it promised up to 50%.
In her opinion, MMM Cooperation could come back to reduce its RoI to about 30% per month while sweetening investors with higher referral bonus. However, it is just for a while as all Ponzi schemes end up collapsing as soon as they run out new investors while old investors look to mere cash out.
To prevent millions of Nigerians from further falling victims to schemes such as this, the Nigerian Securities and Exchange Commission, SEC, had in the past gave out warnings to the public about the danger and financial losses they can suffer from participating and investing in Ponzi schemes.
Although the SEC has not issued any latest statement on the resurgence of the scheme as MMM Cooperation, its statement on MMM Global issued in 2016 is still very instructive.
In a press statement issued in September of 2016, the SEC said:
In a press statement released by the SEC, the commission said:
“The attention of the Securities and Exchange Commission, Nigeria (“SEC”) has been drawn to the activities of an online investment scheme tagged ‘MMM Federal Republic of Nigeria (nigeria.mmm.net). The platform has embarked on an aggressive online media campaign to lure the investing public to participate in what it called “mutual aid financial network” with a monthly investment return of 30%”
“The Commission hereby notifies the investing public that the operation of this investment scheme has no tangible business model hence it’s a PONZI SCHEME where returns are paid from other people’s invested sum. Also, its operation is not registered by the Commission”.
“The general public is hereby advised to distance themselves from this online scheme. Please note that anyone that subscribe to this illegal activity does so at his/her own risk”.
Moreover, the huge membership garnered so fat by MMM Cooperation seems many Nigerians took the warnings as well huge losses suffered in 2016 with a pinch of salt.