Ponzi scheme

Have you heard about the MMM investment opportunity? 

My sister is being bugged by someone who can only be described as a snake oil seller. He had visited her shop three times in the last month. He was trying to ‘woe’ her over into this ‘incredible’ opportunity of monthly 30% returns on investment. She was told to invest 20k naira to start with.

By the time she finished describing how these guys work, I remembered that I have read about them operating in South Africa and Zimbabwe and there have been number of reports of criminal investigation against them, on the ground that they cajole people to part with their money with a promise of high returns.

From what I read online, they are not associated with any bank, they claim to be social financial institution whereby money collected from A is given to B with a promise that A gets 30% on their investment and the cycle continues that way. Also, another catch is that A is told to invite friends and family to join the scheme, the more people one is able to ‘drag’ in the higher their returns will be.

My only question to my sister was that, since the guy coming to her has been persistent, if for any reason he disappears tomorrow, where do you go to be sure investment is intact?

We all know that it is extremely hard to trace anyone in Nigeria, and if a company told one upfront that they are not a bank nor investment company and no physical address in the country – one is perhaps better off spending the cash on a nice weekend away.

A brief search online reveals that Mr Sergei Mavrodi who is the head of MMM Global went burst in 2003 with a total of $100M of clients’ fund down the drain.

All I know is that if anything sounds too good to be true and it involves money in Nigeria, the best way is to run away, far away from it because there is no protection whatsoever for the general public in matter such as this.

Apparently this program has been going on all across Nigeria for a few years now, thousand of people are already knee-deep into this with expectation of high returns in near future – I wish these guys good luck.

What I know is that there is enough information on the web nowadays to read historical performance of a company or individual, so far there are a lot of controversies around MMM Global and enough information about his founder’s past in Russia.

This MMM Financial Times interview is revealing, those who are still debating on joining the scheme may find this useful.

16 thoughts on “Ponzi scheme

  1. We have those scams here too, Fola. Do you remember hearing about Bernie Madoff? I get several phone calls a day and they are almost all scams. I think it’s the sign of the times. When the world moves more efficiently with healthy economies, people have real jobs and don’t have to resort to such illicit tactics.

    Liked by 1 person

  2. Hi Folake,

    How are you doing?

    Hmmm… The mental effort required to understand network-based business ventures leaves me dizzy and suspicious. If there’s the faintest whiff of a scam, I switch off my interest.

    I agree with you, if it’s too good to be true, it probably is. 😀

    Liked by 1 person

  3. MMM deals are to be wary about. Some like Sunway have done well and big. But few and far between. Best advice is run…..as these fellas cannot sustain and they ask you to commit and you end up bearing the brunt of it. Flee…flee fast and hide. Hope your sis stays firm.

    Liked by 1 person

  4. Financial literacy should be taught in schools, in the UK the practical knowledge one needs to navigate through the maze of plans and options regarding money and what is a ‘wise choice’ for you is not available. In the UK, many people know they can take out a loan with a credit card(s). Little do they know that their are better ways of utilising one’s money. I am only now waking up to this.
    It may be ‘boring’ but it is a necessity, it can affect marital relationships, your relationships with your family, whether you end up begging on the street or throwing yourself at the mercy of the social benefit system to survive.
    I’m not sure if that is taught in Nigeria or not, but people need to be enabled to make better decisions with reliable and relevant information at an early age.

    Liked by 1 person

    1. Agreed to all points made here.
      No, financial literacy isn’t taught in schools, not to my knowledge. From my experience small business owners tend to have more control over their earnings than salaried folks – salaries are owed up to a year in some extreme cases, so people can’t really plan on what they are uncertain of.

      MMM targets traders who usually live within their means, this is just really bad as many don’t use social media to read up on the company.

      Talking about credit card loan, I have heard so many eye opening stories of our people here in the UK that sometimes one loses empathy. How do you pity a grown woman who is behind on mortgage payment, but managed to take a cc loan of 5k pounds to appease the gods through his servant, the pastor? In the end she was thrown in the street.

      MMM knows Nigeria so well, my sisters in three different states, Osun, Oyo and Lagos have all being approached – all in their shops.

      Thankfully, good Nigerians all around are cautioning people, those who want to hear, will.


  5. Dear Fola,

    Run, DO run, as you’ve rightly suggested from anything – as the Americans say – sounds too good to be true! Or, as old generation late, late father of mine used to tell us in the mid 1950s when we were in elementary school when magicians used to prowl SW Nigeria to trick market women out of their hard-earned money: if someone knows how to DOUBLE money, why does he not do it for his family!

    In our dialect, it’s more robust and so thought-provoking that it planted a very healthy skepticism of so-called MONEY DOUBLERS of that era in me and their modern-era offspring.

    Thanks for this.

    Liked by 1 person

    1. ‘Money doublers’ – s’ogun d’ogoji, abi? (twenty to forty). This is well known scam but reason I found this MMM worrying is that they are quite aggressive in our local markets and neighbourhoods where there is cluster of stalls and shops.

      Let’s hope people will be cautious going forward.


      1. Yeah! The same aggressiveness that saw them drive many women to ruination in my youth and left many of our school mates hungry because the men also had ways of coining kids’ lunch money – pennies back then – off them. Hence that warning feom my father.

        Just warn your Sis and others who may, understandably be susceptible to such salesmanship because of the economic times Nigeria in Nigeria.


        Liked by 1 person

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