Archive Of MMM, Citizens’ Intelligence and Government System (Part 2)

Of MMM, Citizens’ Intelligence and Government System (Part 2)

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Recently, I have seen online, group and paper adverts in magazines, programme books and host of other means of advertizing, publicizing the so called, MMM. I did not even mind because I believe it is one of those multi-level marketing and networking programmes which ask people to invest and at the same time bring another two other people as referrals. However, I became curious when people who I had come across started showing me evidences of being paid thirty percent on their investment. This led me to getting more information about the scheme; a clue into this will help strengthen your knowledge.

MMM according to Wikipedia is a Ponzi Scheme Company. МММ was a Russian company that perpetrated one of the world’s largest Ponzi schemes of all time. It 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. (https://en.wikipedia.org/wiki/MMM_(Ponzi_scheme_company) for details).

“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.

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. 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.

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”. In 2016, MMM launched a website targeting the Nigerian audience. In January 2016 the Chinese government banned MMM on the grounds that it is a pyramid scheme, (Ponzi scheme), and it is not registered in the country (and as a fraudulent scheme cannot be registered).

My inquisitiveness is not just on the returns on investment, but of the idea, the intelligence and government response. I am also very particular about what the company said on its website which says the scheme is a revolution. Hear Mavrodi, “This is a community of ordinary people, selflessly helping each other, a kind of the Global Fund of mutual aid. This is the first sprout of something new in modern soulless and ruthless world of greed and hard cash. The goal here is not the money. The goal is to destroy the world’s unjust financial system…”

Casey Olugbenga Adeleye is the founder/National Coordinator of the Youth Crime Watch of Nigeria African Centre for Citizens Orientation, an NGO in special consultative status with United Nations Economic and Social Council (ECOSOC). He’s also the Chief Strategy Officer, Pan African Institute for Entrepreneurship and Community Development.

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