UK Newspaper Warn Nigerians to Stay Away from MMM Ponzi Scheme, Wonder Bank

Nigerians have been given a sound and stern warning not to suffer the fate that befell most Zimbabweans recently by staying off MMM Ponzi scheme.

 

Nigerians have been warned that MMM Ponzi scheme everyone is rushing now to invest in might be a disaster in the waiting as it has been revealed that the scheme is run by a convicted Russian fraudster.

 

The warning came from the UK Independent. Read full details below.

 

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Thousands of investors are feared to have lost their money after a pyramid scheme run by a convicted Russian fraudster crashed, somewhat predictably, in Zimbabwe.

 

MMM Global has swept across Africa, with branches promising returns on investment of 30 per cent a month in South Africa, Zimbabwe, Nigeria and some east African states.

 

It is masterminded by the former Russian politician Sergey Mavrodi, who went on the run when the original MMM – standing for Mavrodi Mondial Moneybox – collapsed in the late 1990s, losing investors an estimated $100m.

 

On its website, MMM Global unashamedly advertises itself as a scheme whereby new members “assist” older members by paying a fee to join. Older members are allowed to withdraw money after a certain period of time, and receive bonuses for encouraging others to sign up.

 

Mavrodi himself is reported to have gone into hiding after a separate entity designed to reward investors with the cryptocurrency bitcoin – dubbed the “Republic of Bitcoin” – folded in April this year.

 

And since then, a criminal investigation has been launched into MMM Global’s branch in South Africa, after a probe by the National Consumer Commission “found something” to suggest the scheme was acting illegally.

 

With Zimbabwe’s traditional financial institutions in jeopardy and the country gripped by an economic crisis, thousands turned to MMM Global as an investment that was avowedly independent of government control.

 

That’s despite a warning from the Reserve Bank of Zimbabwe that the scheme was fraudulent. RBZ warned members of the public that existing investors were “paid money not from genuine market investment of their funds, but from contributions made by new investors, until a point when the scheme can no longer attract new investors”.

 

Sure enough, users reported being unable to withdraw any funds earlier this month. One told The Herald newspaper: “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. 

“What it simply means is that the number of people in need of help has outnumbered the number of people joining. Right now we have nowhere to get our money which we invested.” 

 

Despite the cautionary tales of Zimbabwe and South Africa – and indeed the original MMM scheme – a branch is now proving increasingly popular in Nigeria.

The Central Bank of Nigeria has been forced to step in, warning consumers not to deposit money in any institution that is not insured by the Nigeria Deposit Insurance Corporation (NDIC).

 

The bank’s comms director, Isaac Okoroafor, described MMM Global as “a new Ponzi scheme … that is spreading like wildfire”.

“These people always come with very interesting propositions,” Mr Okoroafor said. “These are fraudsters who are just out there to collect people’s money and run away as soon as they hit their target.”

 

MMM Global’s members across Africa continue to defend its legitimacy, publishing screengrabs showing withdrawals as proof the scheme pays out.

 

In South Africa, where a Ponzi scheme is defined as any investment where the return is 20 per cent higher than the repo rate (currently 7 per cent), an anonymous member told business website Fin24:“MMM honestly tell people how it really works and do not promise people any return on the investments.

“As a donation programme, how is it possible to lose your donation? In MMM people ask each other to help them. It depends on the members themselves to maintain the continuation of the process of the provision of help to each other.”

 

A number of South African banks have now started shutting down accounts they believe could be linked to MMM, while in Zimbabwe the trusted mobile money transfer company EcoCash has distanced itself from the scheme, saying it is “not liable for any losses arising from the use of EcoCash to engage in illegal activities such as Ponzi schemes”.

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CBN Issues Stern Warning to Nigerians on MMM...See Details

Nigerians have been given serious warning by the Central Bank of Nigeria over the controversial MMM scheme.

 

The Central Bank of Nigeria has warned Nigerians not to patronize the so-called ‘wonder banks’, as their activities were not regulated by it. The warning was issued on Monday by the Head, Consumer Protection Department, CBN, Hajiya Kadija Kassim.

 

Kassim stated this during a mentoring programme for students of the Government Secondary School, Suleja, Niger State. The programme held simultaneously in over 200 schools as part of activities to mark the World Savings Day.

 

‘MMM Federal Republic of Nigeria (nigeria.mmm.net)’ also called “mutual aid financial network,” is said to come with a monthly investment return of 30 per cent. But, the CBN said anything could happen to people who invested in the scheme as it is not regulated by the apex bank. 

 

Kassim, while responding to a question asked by one of the students, described the scheme as fraudulent since it was not supported by any business model. 

 

She said, “We have 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 their activities because they are fraudulent.”

 

She said the theme of this year’s World Savings Day, ‘Don’t save what is left after spending, but spend what is left after saving’, would assist in creating the needed awareness on the need to save.

 

She added, “The World Savings Day is a tradition created with the objective of stressing the importance of savings for modern economies and individuals alike.

“The primary objective is to increase awareness on financial literacy among various segments of the general public to sensitise them to the importance of saving, earning a livelihood, inculcating a savings habit, and generating employment and entrepreneurship for personal and national development.”

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Nasarawa to install flood warning device

Flood, File copy

Nasarawa state government said on Tuesday that it has concluded arrangements to install automated flood warning devices in all coastal settlements across the state to check flood disaster.

Mr Gabriel Aka’Ka, State’s Commissioner for Environment and Natural Resources, said that the effort was to mitigate the devastating effect of flood disaster in the state.

According to him, the state was hard heat by the flood disaster in 2012 leaving scores dead and property destroyed.

Aka’Ka said that the state government had taken some steps since then to ensure that there was no repeat of the catastrophe.

He said, “Government have created buffer zones for people residing along flood plains to relocate in case of emergency and embarked on intensive public enlightenment aimed at mitigating the effect of flooding.

“Nasarawa state has a long stretch of coastlines along the River Benue with several settlements from Tunga in Awe local government to Umaisha and Loko in Toto local government area.

“We have manual flood gauge mounted in some places in Umaisha and Tunga, and trained community members to monitor water level and evacuate people when necessary to avert flood disaster.

“However, manual gauges are insufficient, hence the need for automated flood warning equipment that will be monitored in a central point for citizens to be rescued promptly if there is a flood disaster.”

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