MMM Global
MMM Global is a Ponzi scheme launched in 2011 by Sergei Mavrodi, with subsidiaries in up to 110 countries; it became widely popular in various African countries like South Africa, Nigeria, Zimbabwe, Kenya and Ghana with some attributing this popularity to poverty and poor government regulation or law enforcement.
History
South Africa
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. and had started up again in late November 2016.Nigeria
In November 2015, MMM launched a website targeting the Nigerian audience, also claiming a "30% per month" return including other acquirable bonuses. The entity was self-described as a "mutual aid fund where ordinary people help each other." 2.4 million people had signed up by late 2016, with the country's unemployed as primary targets. Nigeria's Economic and Financial Crimes Commission confirmed that it was monitoring the scheme.On December 13, shortly after celebrating its first anniversary amid a festive mood from some members, MMM Nigeria announced the freezing of all members' accounts due to what it called "systems overload and the negative attention brought on by the Government and mass media". This led to wide spread panic in the nation and even attempted suicides. On December 14, LASEMA of Lagos State pleaded with Lagosians to dial their emergency number if they spot anyone trying to commit suicide. LASEMA took this action due to the number of suicides MMM caused in Russia
In 2017, the Redeemed Christian Church of God in Nigeria warned all members against participating in MMM It was said that some RCCG church pastors were promoters of the scheme from the beginning more than one year ago when MMM made its entry.
By January 2017, hundreds of other similar Ponzi schemes jumped into the ever-widening Ponzi industry in Nigeria, amid reports that MMM had crashed in December 2016. Some of these schemes include ABCDonor, Twinkas, Ultimate Cycler etc., with rates offered soaring anything up to 200%. All these imitators seek to outdo MMM Nigeria by offering extremely generous rates, creating a cascading effect on the sector.
MMM Nigeria reopened on January 13, 2017, but has been plagued by grievances from participants concerning delayed or unfulfilled payments. This has been attributed to spiraling fear sweeping amongst participants, some of whom have moved to new ponzi schemes.
On February 11, 2017, MMM Nigeria announced the lifting of withdrawal limits on the 2017 mavro while no specific limit for 2016 mavro was stated.
This aimed to encourage new participants to enter, giving old members some assurance of getting back their money. However this has not allayed the fears of some old members especially after MMM told them that to get back their pre-2017 money they should add new money and the more money they add the better the chances of recovering their old money. In its tweet releases, MMM claimed that programmers will be working towards implementing the release of 3x the amount paid in as new countribution from the old mavros. The tweets however don't say when this will be done.
MMM Nigeria has made some charity and humanitarian donations to the Nigeria Society like donations to internally displaced people's camps and hospitalized patients, but critics hold that this is a stunt to regain credibility after disappointing existing investors whose money got stuck in the scheme. This strategy of image-cleaning, according to critics, seeks to hoodwink and attract new unsuspecting recruits and use their money to pay off the stranded existing investors.
Ponzi schemes rely on new contributions to pay existing contributors which make them unreliable since it cannot continue attracting new contributions forever in the required numbers and rates. Even if the whole population become participants this shows there is a limit beyond which no further recruitment is possible or recruitment begins to slow down sharply enough to cripple the scheme's paying ability. Therefore, the scheme is ultimately doomed to fail and it is only a matter of when, not if.
Some believers in MMM however adopt varying responses to critics; "After all nothing lasts forever","MMM is an insurance company without guarantee or insurance" hence sighting many public listed companies, pension/mutual funds that did not payback anything to investors,"it is a gamble,so no guarantees", "It is a Communist ideology the capitalist won't understand".
In view of the rumored suicides of victims and financial losses to victims of up to 18 billion Naira, questions have been raised why there has not been a serious media or government effort to push back against the faceless new schemes multiplying willy-nilly in Nigeria on a daily basis, as most of these barely last more than 3 months with consequent heavy distress to many. It is still not clear to many participants how the media come about the figure of losses. Many old participants still believe that all contributions were made to and fro fellow participants. hence it should not be counted as a loss as the terms of association is clear, "Mutual Donation Aid".
On the 22nd February, 2017 mmmnigeria released a news through personal Office, that all the suggestions of the participants will be considered for implementation: all bonuses acquired in 2016 will be frozen and the growth of 2016 30% mavro stopped.
Zimbabwe
In July 2015, MMM East Africa, launched subsidiary "MMM Global Zimbabwe" targeting the Zimbabwe population. MMM offered its participants "30% per month" return on all investments. It soon became widely popular in urban areas of Zimbabwe. The Reserve Bank of Zimbabwe warned its citizens to stay clear of the program as it could be a fraudulent scheme.On September 2016, MMM Global Zimbabwe issued a freeze on all accounts, speculations suggest that this occurred due to a fall in number of participants. On 5 September 2016, all MMM accounts were unfrozen, and members were encouraged by MMM to continue "investing" their money, however the MMM unfreeze came with a catch; Members would get an 80% loss of their available funds should they decide to withdraw their funds. This made some participants let their funds remain in the program while others withdrew their funds to suffer an 80% loss of their money "invested".
This affected 66,000 Zimbabweans and caused some economic instability.
China
The scheme began in China in 2015 and collapsed in early 2016. In January 2016, the Chinese government banned MMM on the grounds that it was a pyramid scheme and was not registered in the country.Ghana
In November 2016, MMM was launched in Ghana.Kenya
In October 2016, it was reported that MMM entered Kenya and opened a local subsidiary. MMM Kenya offers similar terms to participants as in other countries, including a monthly 30% interest rate to contributors to the scheme.In December 2016, the Central Bank of Kenya, without mentioning MMM Kenya, issued a warning that "virtual currencies such as bitcoins are not legal tender in Kenya" It further said "no protection exists in the event that the platform that exchanges or holds the virtual currency fails or goes out of business."
The entry of MMM Kenya has raised fears of a replay of misfortunes that hit Kenyans in 2007 when 148,784 investors lost 8 billion Ksh to 270 fraudulent pyramids and ponzis. A parliamentary report indicated that there was a spate of suicides, stress-related illnesses and family breakups as a result of the losses and directors of the companies stashed some of the proceeds in tax havens such as in Panama.
In April 2017, CBK warned the public against investing money in pyramids and unlicensed financial institutions, noting that there was a big comeback of new creations of pyramids. It said " “Such entities entice members of the
public to place money with them and
promise quick and abnormally high
returns on their money or acquisition
of non-existent properties.”