Disclaimer: This Post you are about to read here on PeoplesGist.com is not a sponsored nor featured post to Build nor Destroy MMM, rather it was for the purpose of sharing some hidden ideas.
What Is MMM?
According to their official website Nigeria-mmm.net,
MMM is not a bank, MMM does not collect your money, MMM is not an online business, HYIP, investment or MLM program. MMM is a community where people help each other.
MMM gives you a technical platform which helps millions of participants worldwide to connect those who NEED help to those who are ready to PROVIDE help, for FREE. All transferred funds to another participant are your help given by your own good will to another one, absolutely gratis.
If you are completely confident and certain in your actions and make your mind to participate, we kindly ask you to study carefully all warnings and instructions first. In cases of any matter regarding the topic Our online consultants are ready to help and answer all of your questions.
How Does It Work?
MMM is a community of people providing each other financial help on the principle of gratuitousness, reciprocity and benevolence.
In MMM you don’t have to make contracts or pledge your property. In MMM there are no lenders and no debtors. Everything is very simple: one participant asks for help — another one helps.
The only thing that MMM demands from its participants is to be honest and kind to each other. You ask for financial help when you need it, you give financial help when you are able to do it.
How Does It Works Technically?
You declare the willingness to give help (click in your Personal Office (hereinafter PO) "Provide Help"), after which your account will be rewarded with mavro (internal “currency”/scores of the System). Mavros will start growing from the moment of offering the contribution at the rate of 30% per month. (Calculation of reward occurs twice a week, on Tuesdays and Thursdays at 00:00 GMT.) This sum in Mavro shows how much you can request for yourself.
Say you have announced willingness to assist with $ 100. You will be rewarded in your PO with 100 mavro. And they will immediately start growing! A month later, these 100 will become 130 mavro. Accordingly, you will be able to request assistance for $ 130.
However, it is not necessary at all to wait for a month. Help can be requested at any time. But only after confirmation of your mavro. What does "after confirmation" mean? It means only after you actually transfer money, i.e. really give assistance to another participant. (But not just declare willingness. :-)) Request for providing help comes to you in your personal office. If you do not do it within 48 hours, you will be removed from the system. (For all eternity. :-))
History Of MMM
MMM 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.
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.
MMM created its successful Ponzi scheme in 1994. 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, inasmuch 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. 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.
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. With the help of a distant relative he started Stock Generation Ltd., 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.
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.
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.
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.
In 2016, MMM launched a website targeting the Nigerian audience
MMM Nigeria Scam Or Real?
According to a reader on PeoplesGist.com named Drizzymadbet, he sent this ideas via our mail and below is what he came up wit about MMM Nigeria.
It is obvious that many Nigerians are getting aware of this current Pyramid scheme trending in Nigeria called MMM Nigeria (http://ift.tt/2aYwTJE) which promises 30% Return on Investment(ROI) after 30 days.
I called the business a Pyramid/Ponzi scheme, Yes I did, Why would drizzymadbet call it a Pyramid/Ponzi Scheme ? First let’s examine what a Ponzi/Pyramid scheme is one should be wary of MMM Nigeria
A Ponzi scheme (also a Ponzi game or a Ponzi) is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources. Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent.
Initially the promoter will pay out high returns to attract more investors, and to lure current investors into putting in additional money. Other investors begin to participate, leading to a cascade effect. The "return" to the initial investors is paid out of the investments of new entrants, and not out of profits. Often the high returns encourage investors to leave their money in the scheme, with the result that the promoter does not have to pay out very much to investors; he simply has to send them statements showing how much they have earned. This maintains the deception that the scheme is an investment with high returns.
Unraveling Of A Ponzi Scheme
When a Ponzi scheme is not stopped by the authorities, it sooner or later falls apart for one of the following reasons.
1. The promoter vanishes, taking all the remaining investment money.
2. Since the scheme requires a continual stream of investments to fund higher returns, once investment slows down, the scheme collapses as the promoter starts having problems paying the promised returns (the higher the returns, the greater the risk of the Ponzi scheme collapsing). Such liquidity crises often trigger panics, as more people start asking for their money, similar to a bank run.
3. External market forces, such as a sharp decline in the economy (for example, the Madoff investment scandal during the market downturn of 2008), cause many investors to withdraw part or all of their funds.
Why do I Drizzymadbet believe that MMM Nigeria is a pyramid/Ponzi scheme lets look at the following reasons.
1. The promise of a 30 % ROI is outrageous and not in terms with standard rates of investment (Example one makes a profit of 30,000 naira for every 100,000 naira invested in the system in 30 days , excluding additions that comes from referral, signing up and testimonial bonuses) No legal financial company can offer you that investment plan.
2. Such “Return on Investments” been paid to older clients are money received from new clients and the circle continues, the 30% is never made from company profits. That is why there is aggressive ad campaign from the company(MMM Nigeria) paying massive additional bonuses to recruiters that they call guiders to conduct seminars and deceive gullible Nigerians into joining the scheme to keep the system alive.
3. The CEO of the company(MMM Nigeria) Seigei Marvrodi is a convicted fraudster and had run similar fraud schemes in Russia where he defrauded investors over a hundred billion dollars (http://ift.tt/2aYxz1K(Ponzi_Scheme_Company).
According to another Reader on PeoplesGist.com, He also sent his own ideas via our mail and below is all he could say about it...
MMM Nigeria!
Scam or Real?
Once a friend me that "if it's too good to be true... na set up"
That being said... I have had a lot of people talk to me about "MMM-Nigeria" through word of mouth, broadcast posts and via almost all available social media platforms. All trying to sell this new idea of a "financial apocalypse" (whatever that phrase means).
I just don't get it! How do people keep falling for the same scam over and over again simply because it's been branded anew.
My fellow Nigerians, I know times are hard but please kindly consider thoroughly where and how you seek "Financial Apocalypse"
I did a few research on "MMM" and found these links...
From what I gathered from these links... it's probably true that they are selling "Financial Apocalypse"
By definition "Financial" relates to money or how money is managed
While "Apocalypse" translates to an event involving destruction or damage on an awesome or catastrophic scale.
Bringing these two words together to form the phrase, "Financial Apocalypse" leaves me to wonder whose finance exactly will be destroyed in a catastrophic scale?
Be wise people!...