There is a new networking “opportunity” that has been making rounds in Nigeria known as simply as MMM. Some Nigerians who have had their fair share of ponzi schemes believe that that MMM is the grand master of all ponzi schemes while others think its a gold mine.
We at iDONSABI decided to go snooping around and collecting views on the MMM Network offer.
Here is what we discovered:
MMM as Seen on Wikipedia:
Note: we have taken the time to bold areas that look a lot like the Nigerian MMM network offer
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 evation 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.
At its peak the company was taking in 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.)
Regular publication in the media of the rising MMM share price led President Boris Yeltsin to issue a decree in June 1994 prohibiting financial institutions from publicising their expected income.
The success of MMM in attracting investors led to the creation of other similar companies, including
Tibet – Tibet (company)
Chara – Chara (company)
Khoper-Invest – Khoper-Invest
Selenga – Selenga (company)
Telemarket – Telemarket
Germes – Germes
All of these companies were characterised by aggressive television advertising and extremely high promised rates of return. One company promised annual returns of 30,000%.
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 Stock Generation Ltd., another pyramid scheme based around trading non-existent companies’ stocks in a form of the “stock exchange game” on the company’s site, stockgeneration.com. 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.
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. See the rest here
MMM Network Offer As Shared on Social Media in Nigeria
This is what the MMM network offer looks like as shared on social media platforms:
THIS IS. ANOTHER OPPORTUNITY TO SUCEED !!!!!!!!! IT DEPENDS ON YOU!!! OPPORTUNITY FOR. YOU. TO. EXPAND. YOUR. Charitable Heart.
DO you know you can donate a token and become Financially free forever !!!!!! DO you wish to establish a new business.
Do you want to complete a house project or build a new one. Family vacation abroad etc. If yes,then you need to DONATE LARGE ANE GET LARGER DONATIONS.
You donate #7400. 5persons donate 7400 back to you. Total donation received #37,000.
You donate #14,800. 25 persons donate #14,800. Back to you. Total donation received #370,000.
You donate #22,200. 125 persons donate #22,200 back to you. Received donations of #2,775,000.
You donate #37,000. 625 persons donate 37,000 back to you. Received donation of 23,125,000.
You donate #74,000. 3125 persons donate #74,000 back to you. Received donations of #231,250,000.
grade 6. You donate #111,000. 15625 persons donate #111,000 back to you.received donations of #1,734,375,000.
Grade 7. You donate 148,000. 78125 persons donate #148,000 back to you. Received donations of #11,562,500,000.
Grade 9. You donate 259,000. 1953125 persons donate #259,000 back to you. Received donations of #505,859,375,000.
Grade 10. You donate #366,300. 9765625 persons donate #366,000 back to you. Received donations #3,577,148,437,500.
Down to GRADE 15. Just by donating and receiving donations….nothing else but just 100% member to member donation platform,payable directly into your local bank account. HURRY. NOW!!!!!!!! All that is needed is just your first Donation….and that’s the only donation directly from your purse,plus your 5 persons to form your team.
Here’s how a user on Nairaland described the MMM Networking…
MMM stands for Mavrodi Mondial Moneybox!!!
Just as the last part of the name states “Moneybox” is actually a cycle or group of people mainly know in the mmm terms as “Participants” come together to help each other to make money.
The era of looking for a job or if you already have a job and you want extra income, mmm is just what is right for you.
This article is going to be a clear understanding of how mmm works and how we can make money via mmm.
What is mmm?
mmm is not an MLM business, its not a HYIP, a company, an investment, or financial institution.
mmm is a mutual network, where people provide money (help) directly to each other in automatic private offices via internet with growing help index called Mavro.
The power/reward of giving lets you receive 30% growth rate monthly on the amount you donated to a participant in the community.
mmm is 5 years plus globally and has over 240 million participants in 118 countries.
So basically this makes us the largest financial donation exchange in the world
How does it work?
So let’s say for instance you provide help of 100k today, at the end of the month you are entitled to earn your 100k + your 30% which makes it = 130 thousand naira collectible at the end of the month.
If you decide to put back the #13,000 into it, you make 30% 0f #13,000,
30% of #13,000 = #3900
#13,000+ #3,900 = #16,900
Now what if you decide to put back the whole new cash growth back into it,
30% of #16,900 = #5,070
#16,900 + #5,070 = #21,970
and so on. The picture below gives a detailed explanation
mmm 30PERCENT INTEREST
How does mmm generate 30% to pay participants?
This is a question that can never stop being asked. I have tried explaining this to severally persons BUT its like “magic” to so many. I understand everyone’s fears that’s why I will break it all down further mathematically below.
100 donations came in from 100 participants @2,000naira each = 200,000naira
In order for the 100 donations to be paid their 30%, that means 60,000naira extra donations must come in.
The BIG QUESTION is then how?
Here it is:-
The 60,000naira would come in through:-
(1) Regular GH and re-PH from the 100 donations done by the participants.
Here is d maths:-
50 participants GH all their earnings + Principal donation = 130,000naira.
Total left over PH balance = 70,000naira
The remaining 50 then needs 60,000naira to get their own 130,000naira paid too.
The first 50 paid 130,000naira total then re-PH back their 100,000naira (maybe keeping back their total profit of 30,000naira)
That then adds up to the 70,000naira available to pay the 50 participants left (130,000naira).
++ So, the cycle continues on and on for as long as the principle of Regular GH and re-PH remains!!! +++
This is just d same Principle Banks work with. That is why it is possible for just a deposit to serve 10 – 20 withdrawals.
And they pay you little interests for using your money to keep the redistribution process going!!
(2.) New donations coming in through participants referring others to the community. This keeps the system consistently growing!! Every business (offline/online) needs new sales to survive..
Always remember that in mmm there is
++ No Company Account!! Mavrodi can’t wake up one day and ghost off with the money since we are not paying to his account.
++ You bank account/bitcoin wallet is mmm’s account.
In mmm it is not a must to refer before you can earn! But if you do refer, you will earn 10% referal bonus on what your referrals provide as help
Here is what one Nigerian had to say about MMM Networking…
by RONALD NZIMORA
In 2001, I was a starry eyed University student, who was desirous of making it big in life and becoming rich.
I was looking for businesses opportunities that would make me a lot of money. I tried different things.
In 2003, November to be precise, I stumbled on internet marketing, through Success Digest magazine.
Over the next few years I would try almost everything published in the paper – affiliate marketing, information marketing, Google Adsense, you name it.
In 2006, one particular money-making scheme came up which attracted hordes of fans. That scheme was/is known as HYIP.
What’s a HYIP? It’s called a High Yield Investment Programme.
Basically how it works is this:
You put in some money, and then every day or week, or month, depending on the particular HYIP website you registered with, you would earn a percentage, maybe 10%, 15%, 20%, 25%, 50% and even 100% again depending on the HYIP site.
It looked so easy. Just put in money and wait for sometime and bam! You get a percentage.
It looked too good to be true but nothing tried, nothing gained, right? So I gathered my school feeding money and bought eGold (remember them?) worth $50 and “invested”.
The following week, my money had “grown” to $100. My HYIP company paid 100% of your money every week. My oh my! I was totally sold!
Now to make more money, I needed to reinvest my money which was now $100 which I promptly did. The following week, I had $200.
So I went round school preaching this stuff. I even preached it far more than the guy who introduced it to me. I got others to “invest” and with each investment they did, I was scheduled to be paid a 10% “commission bonus” for the referral.
I went looking for more money to borrow to invest because my thinking was, if I had gotten $200 with just $50 in two weeks, imagine how much I would get if I invested $500!
The guy who introduced me to it went to his Mum, borrowed her retirement gratuity and invested another =N=500,000, roughly about $5,000 then!
That week he had earned $13,000 including commissions!
I could see my riches coming. My dream cars, my beach house. I prayed to God morning and evening thanking him for remembering me.
It was like a blessing for everyone, and naturally people poured into this scheme.
One day, I got a call from Nonso, the guy who invited me. He sounded desperate, his voice shaky as he asked me if I had checked my HYIP account. I said no.
“What’s the problem, I asked?”
“I can’t see the money in my account anymore”, he said. “My money is gone.”
When he said that, I felt my heart sink, my stomach turned and I suddenly felt sick. If I remember correctly, I think I pissed a little hot urine on myself.
“Where are you?” I asked. He was at a cybercafe town, so I jumped into a bus and went to meet him.
As I was logging into my own account, my mouth was dry but my account opened!
“Ah! Thank God” I said.
Anyways, Nonso had requested for the HYIP company to send him $7,000 out of his $13,000 which was perfectly okay to do. You were allowed to request a payout anytime you want, between Monday – Friday.
However, after he had placed the request, he logged in a few days later, and his balance was no longer there. It had been wiped out. In fact the page that showed your account was no longer opening.
“It must be something wrong with your account I said. Have you emailed them?” He had emailed, but got no reply. Called the numbers on the website, but they were not going through.
So I placed a payout request of $100, and suddenly, my own account balance was wiped out.
Sweat started forming on my brows. I refresh the page again and again, still the same thing. The account balance page was no longer opening.
We went back to school hoping that things would change. It didn’t. It took me several days to come to terms with the fact that my $200 abi $50 was gone forever.
Someone in Iran, Russia, Ukraine, only God knows where had taken my money and it was gone.
Nonso’s mother’s gratuity was gone. All the monies by those I introduced? Gone! I and Nonso became almost like outcasts in the school. Nobody wanted to deal with us anymore as far as business was concerned. We were blamed for the con.
Why am I telling you this story?
Because lately, I have been receiving offers from people to promote a ponzi scheme called MMM.
They tell me it’s a business. That it works. That people have been paid money, blah blah blah.
I want to use this piece to write an article and wash my hands off this matter once and for all.
MMM is a ponzi scheme. Simple and short. I have been in business long enough to smell a scam from a thousands miles away, and this one is a big scam.
It’s the return of the HYIP days of 2006.
Ponzi scams reinvent themselves every few years, change their name, wear “new clothes” and come out as the newest best thing since sliced bread.
In 2008, they returned as wonder banks – Nospetco, Gradual Investments, etc. In 2010 it was Clickviral. In 2012 – 2013, it was “Oil and Gas Investment” companies. Today it’s MMM.
MMM is a scam. It is not a real business.
A real business has A PRODUCT to SELL, a product that adds value to the person buying it. There’s an EXCHANGE of value between both sides – the buyer and the seller.
MMM doesn’t have that. Rather it “pays” you a “commission” to refer people. Where does it get the money to pay these commissions? For how long can this be sustained?
What product does MMM sell? Why does an “investor” take his money and “gift” it to some stranger, and then wait for someone else to choose him and also “gift” him too?
If you don’t get someone to choose you, then you wait and your money “grows”? Grows? How so? With fertilizer? Where will MMM get the money to pay you this percentage from? Will they steal it?
The most alarming thing about this stuff is this mysterious program is based in Russia. Russia? Are you kidding me? Anyone who knows anything knows that Russia is a country full of murderous mobsters who run illegal gambling operations, money laundering and prostitution rings.
They have since forever created similar programs to mop money up, transfers their illegal funds and pay off people to kill their rivals.
Are you unknowingly helping support a Russia mafia boss and putting innocent people in danger while perpetrating money laundering, illegal gambling and prostitution?
I will not be surprised if the EFCC swoops on the people who run these and guess who they will come after? Yes you the big gun who is pushing this everywhere.
And no, you cannot blame Buhari for your misfortune when it happens.
Frankly, it amazes me that people who should be knowledgeable are pimping this MMM stuff.
It’s a scam. And it will collapse like all ponzis do. It’s just a matter of time. If you really care about your audience and want their good, not just money that will enter your pocket by doing a seminar, then you will NEVER promote that shit.
It speaks volumes about the mentality of the general masses that they always gravitate towards a business “opportunity” that requires, “no work” and no “effort”.
NEWSFLASH: The only way to make money is to actually provide something of value to another person in exchange for cash, not to give someone money and then wait for another person to give you.
What nonsense is that?
This is my last say about this MMM and similar cash gifting programs. I do not want any part of it. I do not wish to receive any further enquiry about it from anybody.
And please, next time before you come into my inbox with some frivolous questions about a program, do me and you a favour, fire up Google and do some research about it FIRST.
Yet another nairalander’s view on MMM Network
They’ve been lot of controversies and incredible success stories about the brand new and raging MMM scheme. I just want to give my own unbiased review to all these news flying about.
About the founder and the passed alleged scam. I think what really happened was that the first generation of MMM was a scheme designed and operated on PONZI model, where a central account was operated and managed. A ponzi scheme will certainly always crash in either of these two ways; (1) the organisers disappears with all the monies, or (2) the system grows exponentially so large, it collapse in this own weight. I think the latter (second reason) was what happened to the founder of MMM last time.
Majority of Nigerians just engage in lip service, blindly following their leaders, without thinking and researching information. Critics will shout MMM is scam by giving biased evidence of previous schemes that have crashed, but they never critically researched why these schemes crashed. Above, I gave u two major reasons. Now ask yourself this important question; “HAS ANYONE IN NIGERIAN BEEN SCAMMED BY MMM?” I can’t speak for anyone, but am yet to hear about a verified scam MMM story in Nigeria.
THE FUTURE OF MMM: Now remember I mentioned MMM was borne from an inherited ponzi scheme that crashed on its own weight years ago. Over the years, I think MMM has continually restructure and improve on service delivery. I believe the selling point of MMM today in Nigeria is the “No central account” policy of the scheme. A central account policy is what makes all MLM (Multi Level Marketing) and ponzi schemes susceptible to fraud or imminent system collapse.
MMM will eventually collapse either in the near or distance future, but it will be unfair for someone to tagged the current trending scheme a SCAM when no one has claimed to be unfairly treated or scammed. Always abide by the safe online business policy of investing what you can afford to loose and also, “enter early and leave early”.
Finally, here’s what we at iDONSABI had to say about the MMM Networking Offer
From a mile away, the MMM network offer reeks of ponzi and 419 combined. Why? Well they say all you have to do to pay into participants account and vice-versa and voila! You’re rich! Just like that…no sales of products or services…so where is the gain coming from?
Its like robbing Peter to pay Paul as someone rightly stated. Has anyone ever bothered to ask the following questions “who is the Oga at the top?”, “Is this so called network registered with the Federal Government?”, “What will happen to your money or reputation when one day (soon) the Government wakes up and puts an end to the scheme…like every other ponzi scheme?”
Your money is yours to do with, whatever you wish and yeah I know you or someone else just cashed 200,000 Naira from MMM last week. However, if you sit down to ask yourself some honest questions, you would know that at the end of the day someone, somewhere would pay for this short cut to riches…could be a an old man who put in all his pension, a family who put in their savings with hopes of raising more money to take care of a terminally ill child or even yourself…
Worse, you could be responsible for someone’s suicide like the first MMM scheme….
This is the view of iDONSABI on the MMM social financial network…it would definitely be reviewed with apologies if MMM Network is still a legalised thing in let’s say 5 years time…no, make that 2!
Got other views on the MMM Networking? Why not share in the comments section!