According to Wikipedia the man behind MMM is Sergey Panteleevich Maavrodi and who is he?
Sergey Panteleevich Mavrodi born August 11, 1955 is a Russian Convict and a former deputy of the State Duma. He is the founder of МММ. MMM was founded in 1989 by Sergey Mavrodi and his two brothers Vyacheslav Mavrodi, and Olga Melnikova. The name of the company was taken from the first letters of the three founders' surnames.
Initially, the company imported computers and office equipment. In January 1992, tax police accused MMM of tax evasion, leading to the collapse of MMM-bank, and causing the company to have difficulty obtaining financing to support its operations. Faced with difficulties in funding its foreign trade, the company switched to the financial sector. It offered American stocks to Russian investors, but met with little success. Later, MMM-Invest was created for the purpose of collecting vouchers during privatisation. This effort was similarly unsuccessful
In 1994 the company created its successful Ponzi scheme. The company started attracting money from private investors, promising annual returns of up to one thousand percent. It is unclear whether a Ponzi scheme was Mavrodi's initial intention, in so far as such extravagant returns might have been possible during the Russian hyperinflation in such commerce as import-export
MMM grew rapidly. In February 1994, the company reported dividends of 1,000%, and started an aggressive TV ad campaign. Since the shares were not quoted on any stock exchange and the company itself determined the share price, it maintained a steady price growth of thousands of percent annually, leading the public to believe its shares were a safe and profitable investment.
An important factor in the scheme's success was word of mouth, but most of the company's success came from its extremely aggressive ad campaign, which appealed to the general public by using "ordinary" characters that viewers could identify with. The most famous of them, a "folk hero" of early 1994, was Lyonya Golubkov. Another notable marketing effort was a giveaway of free Metro trips to all Moscow citizens on a particular day. MMM also was one of the first well-known companies in Russia with a logotype and slogans ("Flying from shadow to the light" and others).
At its peak the company was taking in more than 100 billion rubles (about 50 million USD) each day from the sale of its shares to the public. Thus, the cashflow turnover at the MMM central office in Moscow was so high that it could not be estimated. The management started to count money in roomfuls (1 roomful of money, 2 roomfuls of money, etc.).
Regular publication in the media of the rising MMM share price led President Boris Yeltsin to issue a decree in June 1994 prohibiting financial institutions from publicising their expected income.
The success of MMM in attracting investors led to the creation of other similar companies, including Tibet, Chara, Khoper-Invest, Selenga, Telemarket, and Germes. All of these companies were characterised by aggressive television advertising and extremely high promised rates of return. One company promised annual returns of 30,000%.
On July 22, 1994, the police closed the offices of MMM for tax evasion. The company attempted to continue the scheme for a few days after 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.
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.
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.
While it was believed that Sergei Mavrodi left Russia and moved to the United States, it is possible that he stayed in Moscow, using his money to change apartments regularly and employ a group of former special agents.
In 2007 Sergei Mavrodi was found guilty in a Russian court of defrauding 10,000 investors out of 110 million rubles ($4.3 million). Mavrodi claims he is not the beneficiary of the donations and he is not used to flamboyant lifestyle. His true charges of which he was later convicted of is tax fraud though he claimed that MMM scheme is not a business, but a mutual donation program of which there is no law against such. There were interviews after his release where he claimed MMM is behind the bitcoin price rally.
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.
The MMM scandal led to increased regulation of the Russian stock market, but the legacy of the fraud led many to become extremely suspicious of any joint stock companies.
Stock Generation
With the help of a distant relative he started, Stock Generation Ltd in 1998, another pyramid scheme based around trading non-existent companies' stocks in a form of the "stock exchange game" on the company's site, stockgeneration.com. Despite a bold-letter warning on the main page that the site was not a real stock exchange, between 20,000 and 275,000 people, according to various estimates, fell for the promised 200% returns and lost their money. According to U.S. Securities and Exchange Commission, losses of victims were at least USD 5.5 million.[6]
Stock Generation,[11][12] allegedly a classic pyramid scheme presented as a "virtual stock market game". The website ran from 1998 to early 2000. The Massachusetts district court initially found that U.S. Securities and Exchange Commission was unable to cite Stock Generation's founders and owners for securities violations. However, the United States Court of Appeals reversed this decision in 2001, concluding that the SEC alleged sufficient facts to state a triable claim. In 2003 the SEC obtained permanent injunctions against SG Ltd. and relief defendants SG Perfect and SG Trading, which profited from the disbursement of funds fraudulently gained by SG Ltd
MMM-2011
Movrodi lunch another scheme called MMM-2011 after he was released from prison for cheating 15 million Russians in the 90s. According to him, this is a global benefit fund where people voluntarily help each other financially.
Some 15 million of easy money lovers have fallen into the tempting net of MMM-2011 since it was created. Sergei Mavrodi is worried because things are not going too well. In 1994, 15 million depositors joined his racket in six months. At the time, Russia’s leading television channels advertized his project. At present, he has to distribute leaflets by mail and rely on the spread of rumours because he has no access to the mass media and his billboards get removed. In fact, local authorities and advertising agencies show common sense by taking these preventive measures. Although the Federal Antimonopoly Service sent a conclusion to the Interior Ministry by its Expert Council urging it to recognize MMM-2011 as a financial pyramid, the Prosecutors Office sees no reason to admit Mavrodi’s activity illegal. Here is an opinion from a lawyer at the Russian Legal Service, Konstantin Gusov.
“Russia’s criminal legislation does not allow punishing any body for deliberate fraud in the absence of the suffered. Unless at least one affected person complains that Sergei Mavrodi’s project inflicted losses upon him or did not provide him with expected money, the law enforcement agencies cannot find any way to fight against this phenomenon. In short, all people know that this will end in failure but are prompted to wait until it happens,” Konstantin Gusov said.
Even in this case, the cheated citizens cannot hope for getting back their money. This time, experienced Sergei Mavrodi has taken steps to safeguard himself. On his site, he warns that people voluntarily join the MMM-2011, that payments will be made as long as new clients are attracted and that the exchange rate of MAVRO is determined by himself according to his will. In these circumstances, the civil code will not help, says the founder of the Moscow Human Rights Centre, Mikhail Salkin.
“The civil code does not defend deals based on betting, some games or gambling. In this case, when the value of the currency is fixed by a citizen according to his will, the civil code will not defend those who have suffered. It will be useless to file a case demanding the return of money deposited and paying interests. Moreover, the citizens have no written or oral agreement with anybody,” Mikhail Salkin said.
South Africa
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".The group was identified as a possible pyramid scheme by the National Consumer Commission and accounts of clients were later frozen by Capitec Bank. In response to mounting criticism and official investigations by state authorities in 2016, supporters of the South African MMM scheme staged a protest march in Johannesburg. and had started up again in late November 2016.
May 1st 2016 In a notice posted to participants of the scheme, the group said that “persecution against MMM organized by the mass media” has provoked a panic which has forced the scheme to “start all over again”.
The group’s administration said that the scheme’s currency – “Mavros”, named after the scheme’s founder, convicted Russian fraudster, Sergey Mavrodi – had been frozen and were impossible to use.
The group blamed the collapse of the system on media reports and South African banks, which it alleges have hurt and robbed “millions” of people who were part of the MMM scheme.
The scheme said it has started over with a clean sweep, with a plan to compensate users for any Mavro funds which were frozen.
The “old” version of the Mavro currency will be ‘bought out’ through trades of the “new” version of the currency, where equal value would be paid out to participants over six months, using 10% of total trade – effectively placing a debt burden on all participants.
The notice popped up on participants’ dashboards over the weekend (1 May 2016), but was no longer appearing by Tuesday, according to users. The notice was captured and posted to social media, however:
Dear participants!
Unfortunately, the persecution against MMM organized by the mass media has provoked a panic. We have been working in South Africa for almost 2 years and we have millions of members. During all that time, we had no complaints and accusations from participants, everything was paid to everyone in time and in full amount, by 30% per month. We held charity events and helped children. We did a lot of useful things for people! Well, who was suffering from this?
The bankers and the adherents of the current unjust financial system. That is why they planned and brought all these crazy investigations and persecution in the mass media. “The only thing which prevents the investigation is the fact that non of the participants reported to the police”. If there are no complaints, and everybody is happy, then what is the investigation for? What is the subject? Did not they understand the consequences? Did not they understand that their irresponsible actions would hurt people? Millions of people! Well, try oppressing any bank, even the most reliable one, in the same way, and see what will happen tomorrow.
However, it is futile to explain that to them. MMM prevents banks from robbing people, that is the only reason why all this is happening. And nobody cares about people. If we managed to pay millions of participants 30% per month for two years (and would still be paying, if the mass media did not lie about MMM!), why do banks not do the same? Why do they offer only a few percents a year? Make your own conclusions. Thought everything is clear right now. You are simply robbed, we have always been saying it. The modern financial system is predatory by nature. It is not for ordinary people, it is for the bankers. Its purpose is financial slavery! And it achieves this purpose perfectly.
In general, in this situation, we have to start all over again. We have no choice. You can see on your own what is happening.
Hence,
1. The current (“old”) Mavros are frozen. Any operations with them are impossible.
2. With the development of the system, we will send 10% of the total inflow (of all the PHs) to pay for the “old” Mavro. According to the experience of other countries, we can definitely say that in the normal course of events, all the old Mavro debts will be paid off in about six months.
3. “New” Mavros (Mavro bought from the moment of this announcement) are introduced. You can use them on a common basis: to ‘acquire’ and ‘withdraw’ them at any time.
All of this, of course, is not very nice, but it’s not the end of the world. We will quickly pay off “old” Mavro debts, no doubt about it. You just have to wait. (And anyway, you can thank your precious media and banks for this “gift”!). The best thing you can do is just to start participating again, that is all. And you will quickly return everything, even with a benefit. Moreover, now is the most favorable time to participate and invite: in fact, everything starts from the beginning. So do not miss your chance! :-))
We hope for your understanding, Administration.
Nigeria
In November 2015, MMM launched a website targeting the Nigerian audience, also claiming a "30% per month" return including other acquirable bonuses. The entity was self-described as a "mutual aid fund where ordinary people help each other." 2.4 million people had signed up by late 2016, with the country's unemployed as primary targets. Nigeria's Economic and Financial Crimes Commission has confirmed that they are monitoring the scheme.[11] On the 13th of December, MMM announced the freezing of all members' accounts due to systems overload and the negative attention brought on by the Government and mass media, leading to wide spread panic in the Nation and even attempted suicides.
All is not well in the MMM Nigeria community with the news of a pause mode, according to comments gotten from members of the ponzi scheme, “the yuletide period is a time money is seriously needed to meet up with festive demand, but MMM have decided to keep us stranded”.
See other vote of no confidence from a whatsapp group:
Sheddyblaze said: “What is happening, this is not d mmm we use to know,with the recent changes it causing more harm than good, I thought its a forum of mutual understanding not knowing there are deciders, am very sorry to say is their prophecy not actually coming to pass? How can the admin just decided to freeze our money ? So is now a must to help? Some of us are beginners and creating this kind of panic won’t help,d admin should go back and revise his/her decision cause when we PH there was no freezing not to so there shouldn’t be any freezing during getting helped please. If people don’t GH do u expect me to PH? Never , that’s what we are saying.”
Isitor: “One month freezing of confirmed mavro. Does that mean one’s money on confirmation will stay again for one month. Or that one’s money is only withdraw-able by one month.?
Lexluthor: “The frenzy they are trying to prevent will eventually happen if and when they defrost the mavros. Every participant with money in the system will hit the GH button as fast as lightning.. And with this news, the larger society intending to PH will take a chill pill.. So when there’s no PH, how do you GH? The site says use your spare money, yet encourages us to keep PH at an optimal level this period. If the said spare money has been frozen, are we expected to PH with new “not spare” money? Where’s the sense in the decision mbok? IMHO, It would’ve been better if they froze the 30% increase and release the capital sum, that way the looming panic will be contained..”
Victoria: “This is really scaring o, I’m suppose to GH today and also PH. I hope I get paid o and to even PH now, I’m really afraid”.
In another whatsapp group, MMM Nexus Solution, members of the ponzi scheme, many who are Guilders, have launched their displeasure over the new development. Many have lamented that they don’t know how to communicate the development to their downliners (Those they persuaded to stake their money in the ponzi scheme).
They also argued that this decision of the scheme’s management will trigger the downfall of the scheme. They said most people will hence, be skeptical in staking their money while a good number of them said such decision is selfish and would have been better if it was conveyed to members before now. One of the members with the name, Rosy, said thus: ” This rule is obnoxious, unscrupulous, provocative, insensitive….they did not advise them well, evil prophesy coming to pass.”
Another, Samroyal said: “it shouldn’t have been now when both the media and govt are predicting that it will soon collapse thereby trying to discourage pple from it.” Another member lamented thus; ” One of my down lines was supposed to pay 50k today and he has just called me to tell me he isn’t paying again till this is sorted out. Exactly my point.
If millions GH in January, how will the system manage that, bearing in mind that this act of suspension of GH this period will discourage many people from joining; who will pay the January GH?” And yet another member lamented thus: “I am a member of NBA Abuja branch, tomorrow, we have a seminar on lottery, gaming, casino, MMM etc hosted by Nat lottery Comm. I have been a strong MMM advocate amongst Abuja lawyers, what do i tell them tomorrow?”
MMM Nigeria have faced much criticism from experts, and some are saying the scheme will crash December 14th, others have July 2017 as the crash date. But one thing is certain here, with this move to trap members money, we may very well start seeing the beginning of the end of MMM Ponzi scheme.
This is happening coincidentally at a time the second largest Ponzi Scheme in Nigeria Ultimate Cycler website crashed since December 2nd, although Peter Walfing the founder gave Sunday 11th December as the relaunch date but as of the time of this report ultimatecycler.com is still down.
These travails does not come as a surprise to the Nigerian media, government agencies and the larger Nigerian audience as the warnings from CBN, SEC and NDIC on dangers of investing on ponzi schemes have all fell on deaf ears.
On the 14th of December, LASEMA (Lagos State Emergency Management Agency) of Lagos State pleaded with Lagosians to dial their emergency number if they spot anyone trying to commit suicide. LASEMA took this action due to the number of suicides MMM caused in Russia MMM Nigeria reopened on 13th January, 2017 with new rules According to Nigerian Bulletin, MMM programmers are working earnestly with a new model which will be announced and implemented at a later date.
This, the MMM Admin. claims will help keep the system balanced:
“To keep the GH(Get Help) and PH(Provide Help) balanced. No matter whether people join us or not.. and it will be sustainable.
“When it will be implemented, we will be notified. We can PH and we should keep our downlines updated.”
Recall that the ponzi scheme froze the accounts of its mavros, as the particicipants are popularly called, on December 12, 2016, in order “to help prevent any problems during the new year season. And also to tackle the media frenzy that has been going on in the country”, MMM said in a circular sent out to all users of the scheme. The latest statement on the new guidelines further reads:
About the growth of bonuses
We have to see towards it… half of guiders’ supporters said it should keep growing. Guiders misbehaving will be dealt with. And the only way to get them is by getting evidence.
Unfreezing of Mavro will be probably January 14 or might be sooner.
About proof of payment
We will use a new strategy for fake proof of payments:
We will start checking orders when it turns yellow, that is…
Change of guiders button will be done this week or any time soon. Phone number verification would be implemented soon… via sms notification.
Guiders school: Soon we will start automized guiders school and make it well organised.
False news around:
We should demonstrate to others that our community is working and not give heed or ear to what people say about the system… It solely depends on us the leaders.
We can also talk to people to PH and let them know that their mavro will keep growing.Recall that the Central Bank of Nigeria(CBN), the Securities and Exchange Commission(SEC) and Nigeria Deposit Insurance Corporation (NDIC) had warned NIgerians against using the scheme.
