МММ (Mavrodi Mondial Movement) was a Russian company that perpetrated one of the world’s largest Ponzi schemes of all time, in the 1990s. By different estimates from 5 to 10 million people lost their savings. According to contemporary Western press reports, most investors were aware of the fraudulent nature of the scheme but still hoped to profit from it by withdrawing money before it collapsed. In 2011, MMM re-opened as “MMM Global”.
MMM Founder, Sergey Mavrodi allegedly wrote an open letter to the Federal Government of Nigeria explaining how the scheme works, and its benefits to investors. The letter was displayed on the page of all participants of the Scheme. Recall the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) had warned Nigerians against participating in the scheme which it described as a “Ponzi”.The House of Representatives in October also ordered an investigation into the operation of the scheme. According to the letter, Mr Mavrodi implored the government to look at the benefits of the scheme rather than be against it without knowing how it was helping Nigerians. The founder said although MMM produces nothing, it also takes nothing out of the country either.
“The money is just redistributed among the citizens of Nigeria. It gets from those who are richer to poorer ones, in this way of restoring social justice. What”s wrong with that?”
To get a sense of just how widespread this Ponzi scheme was, almost every Nigerian from Lagos to Sokoto knew someone (relative or friend) that was involved in the online pyramid scam. There is no telling the kind of damage that this scam caused, especially in a time when Nigeria’s economy was taking a turn for the worse, affecting the daily livelihoods of millions of Nigeria and ultimately, driving them to fall, victims of schemes. Over 3million Nigerians lost $57 million USD to the scheme.
Speaking at an International Trade Fair, Hadi Suleiman, NDIC’s Deputy Director of Corporate Affairs
expressed regrets that Nigerians patronised the scheme despite repeated warnings from the Central Bank of Nigeria.
The Ponzi scheme is the phenomenon of illegal fund managers, popularly called ‘Wonder Banks’, which have continued to defraud unsuspecting members of the public of their hard earned money.
This phenomenon has been a source for concern because despite our repeated warnings over the years, some members of the public have continued to fall victims of their fraudulent practices.
“We would like to reiterate the fact that these fund managers are illegal.
I want to also draw the attention of some cooperative society which often go beyond their primary mandate by accepting contributions from members as cooperative societies are only recognised to mobilise savings from their members.
He said the use of Bitcoin, Ripples, Litecoin, and Onecoin as currencies for medium of exchange are not authorised by the CBN.
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