MMM Saga - The infamous global Ponzi scheme that's about to hit Ghanaian shores

MMM Saga - The infamous global Ponzi scheme that's about to hit Ghanaian shores

The Mavrodi Mundial Moneybox (MMM) Group has hit Ghanaian shores! In case people haven't heard about this "social financial network", YEN has gathered a few bits of information regarding the international group in an attempt to inform Ghanaians.

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MMM Saga - The infamous global Ponzi scheme that's hit Ghanaian shores

READ ALSO: Most of my friends have left since I turned to Christ - Majid Michel

MMM in Ghana

Now with most of it's African operations reaching their maximum thresholds, MMM Global has turned to Ghana as the next piece of fertile ground for its operations.

MMM Global is not a bank, investment firm, nor is it anything like what Ghanaians call a savings and loan company.

So what is MMM Global?

“MMM gives you a technical platform which helps millions of its members worldwide to connect those who NEED help with those who are willing to PROVIDE help, for FREE. All funds you transfer to another member represent help you provide of your own good will, absolutely gratis,” MMM Ghana's website.

The company promises a whopping 30% interest on "donations" per month, a figure that according to South African financial regulators puts it in the category of a Ponzi scheme.

Even though MMM Global has been banned in China, and is also under investigation in South Africa, MMM Ghana's website still professes that the group's operations are completely legal.

"MMM is absolutely legal and does not break any laws. Because there are only money transfers between private persons and nothing more." MMM Ghana website.

READ ALSO: I'll commit suicide if Ibrahim Mahama is not jailed - Ken Agyapong

How it works

In a nutshell, in order for one to participate one needs to "provided help" before one can get it. Once investors declare their willingness to help, their accounts are credited with the system's internal currency/credit system with the equivalent bonuses.

For example, one declares that they can help with $100, and they get credited with 100 Mavrodi (the domains new currency) in their account. This allows them to be able to request 130 Mavrodi for help, allowing them in turn to received $130…and so on and so forth.

According to the MMM's website(s), the scheme claims that it takes no money from users since there is no central account.

Furthermore, the scheme claims that there are certain bonuses that one earns for bringing other users to the scheme. For example, let's say Nana brings Nii into the scheme. Every time Nii gets credited, Nana will receive 10% of what Nii's been credited with.

With the DKM Microfinance issue still fresh in the minds of Ghanaians people ought to be more circumspect in dealing with murky financial groups.

On the other hand with the scheme operation since the mid 90s, chances are if it continues unchecked Ghanaians may get a taste of what Nigerians, South Africans, and Zimbabweans have had to deal with.

SIDE NOTE: YEN editors noticed a suspicious resemblance between two different MMM users, David Igonor and user Lusisi Kwabena Abrempa.

A little background

According to MMM Ghana's website, MMM is an online platform that connects customers who are in need of financial help with those who can, and are willing to offer it.

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MMM Saga - The infamous global Ponzi scheme that's hit Ghanaian shores

READ ALSO: Asset Retrieval Task Force accusted of theft

MMM was first founded in Russia by Sergei Mavrodi, his brother Vyacheslav Mavrodi, and Olga Melnikova in the 1990s and by 1992 the company was involved in Ponzi schemes. Russian police eventually shut down the company’s activities by 1994, and according to different reports anywhere from 5 to 40 million people lost up to $10 billion by the time the company filed for bankruptcy in 1997.

“A Ponzi scheme is a form of fraud in which belief in the success of a non-existent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.”

The company re-launched in 2011 as MMM Global targeting various emerging markets, over 100 countries in total. As of yet, the scheme has reach the borders of five African countries, namely Nigeria, Kenya, Zambia, South Africa, and now Ghana.

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Zimbabwean users of the scheme were unpleasantly surprised last year in September when their accounts were blocked leaving many who’d invested in the scheme without their hard-earned funds.

“All along things were moving in the right direction and we now have nowhere to claim our investments,” said Mr Tinashe Muza of Harare.

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“When we started putting our funds in the scheme one could get assistance within seven days but things later changed to 14 days and when we were shut out the waiting period was 21 days... Right now we have nowhere to get our money which we invested.”

In Nigeria the company froze all members’ accounts on December 13th, saying that the move was somehow in light of the festive seasons. Even though skeptics believed that it was the precursor to the scheme’s collapse, the company has persuaded its followers that it's a temporary decision.

"The reason for this measure is evident. We need to prevent problems during the New Year season, and then, when everything calms down, this measure will be cancelled," said the administrator to all members.

The Nigerian government has been unambiguous in it’s condemnation of the global Ponzi scheme. It has issued many a warning urging Nigerians not to get involved with MMM.

"We've heard about the activities of MMM, but I want to warn you against it because they are wonder banks that are not regulated. Desist from participating, because they are fraudulent," said Hajiya Kadija Kassim, ‎Head of Consumer Protection Department of the Central Bank of Nigeria.

In South Africa, as of April 2016 the group was under investigation by the Hawks, a unit with the National Consumer Commission while the state also froze the groups assets in the same year.

“If it sounds too good to be true, then it probably is too good to be true and don’t invest,” said commissioner Ebrahim Mohamed.

Although the scheme had been operating in China since its launch in 2011, the Chinese government banned the scheme following numerous warnings, and the scheme’s subsequent collapse in the latter months of 2015.

READ ALSO: Most of my friends have left since I turned to Christ - Majid Michel

Have you or your family and friends been affected by the MMM Ghana scheme?

Share your story with YEN.com.gh and Ghanaians: contact us on Facebook, Twitter @yencomgh, or drop us a line at info@yen.com.gh.

Source: Yen.com.gh

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