Mavrodi’s heart attack, death, atrocities and MMM

Mavrodi’s heart attack, death, atrocities and MMM

Tuesday, March 27, 2018 12:32 pm

Mavrodi before his death

By Ademola Adegbamigbe

Sergei Mavrodi, founder of Mavrodi Mondial Movement (MMM), a Ponzi scheme, who wore a large pair of transparent glasses behind which his pencil line eyes peeped, had the harmless mien of a Jesuit monk. He could even be mistaken for the Dalai Lama of Tibet! Yet, behind that peace-looking front was a scheming, fraudulent inner man. People who trusted or got in contact with his MMM rued the day of their decision! Now the man has succumbed to the grim reaper, the “leveller” of the rich, poor, law abiding and desperadoes.

Mavrodi died in Moscow on Monday 26 March 2018. According Moskovsky Komsomolets, he was taken to a city hospital from a bus stop overnight Monday “after he felt weakness and pain in the chest area.”

Is there a link among his heart attack, guilt and the atrocities he committed through his pyramidal financial arrangements that left many gnashing their teeth in debt or hopelessly plunging to death? This is a question that religious people, philosophers and inhabitants of those oriental monasteries will be busy tackling about for a long time.

When he introduced his scheme to Nigeria, many citizens, looking for short cut to riches or escape from the inclement economic weather, jumped at it. That was despite the warning by the Central Bank of Nigeria that Mavrodi was going to sell them down the river.

However, his foot soldiers proselytizing for him in Nigeria fed Mavrodi with details of the warning. From his lair, he had the cheek to fire a letter at President Muhammadu Buhari.

In the words of Mavrodi: “So far MMM has come under a constant attack from you. In this regard, I would like to ask you a few simple questions. Since you are concerned with the interests of millions of your fellow citizens, I hope that you would be so kind to answer them.

“What are you trying to get? Do you want the MMM System to collapse and millions of people to suffer? Who will support them then if now MMM is their only means of livelihood? Will you? You even don’t pay wages to people? Or might you not care about them? Might you be using a trendy topic to make a good name for yourselves? What will you say to a mother who will have no money to buy food for her child? Will you let her child die for the sake of the higher interests of the economy?

“You say that MMM is a scam. What is the scam here, if all members are warned in advance about all the risks, the possible and impossible ones? They know there are no investments at all. The warning is a red text on a yellow background placed on most prominent place of the website.

“You say that MMM is bad. Why? Yes, it produces nothing, but nothing gets out of the country either. The money is just redistributed among the citizens of Nigeria. It gets from those who are richer to poorer ones, in this way restoring social justice. What’s wrong with that?

“You have repeatedly stated that “it should be investigated!.. researched!..” It means you know nothing about this System yet; you even haven’t understood how it works.

“And finally. If you know what is right for people, why is the life so bad in the country?”

MMM, as Mavrodi argued, “has been working in Nigeria for a year, and according to your estimates, the total number of members now is about 3 million people”.

To many Nigerians, Mavrodi was right and Buhari and his government wrong. Thus, like dogs that are bound to get lost after refusing the whistling of their hunter owner, many fell for the scheme and lost a lot of money-some borrowed funds, life savings or money kept in their care. In fact, N11.9 billion went down the drain, according to Nigeria Electronic Fraud Forum, NeFF.

Many international media revealed that In 2007, Sergei Mavrodi was convicted in a Russian court of defrauding 10,000 investors out of 110 million rubles ($4.3 million). However, he claimed Mavrodi he wad “not the beneficiary of the donations and he is not used to flamboyant lifestyle.

On 23 September 2016, TheNEWS with materials from independent of U.K., published a story, “Ponzi Scheme: How MMM was discredited in South Africa, Zimbabwe, but now deceives Nigerians to invest.” Below is the story, showing that Mavrodi was an international fugitive, a fraudster who had become a persona non grata in Zimbabwe, South Africa and even Russia. How he managed to escape justice in his country where he died beats the imagination!

 The founder of the MMM financial pyramid scheme Sergey Mavrodi, holding a copy of his banned book ‘Temptation’ in Moscow in May 2008. Mavrodi’s schemes stole life savings from more than a million Russians in the early 1990s AFP/Getty

The founder of the MMM financial pyramid scheme Sergey Mavrodi, holding a copy of his banned book ‘Temptation’ in Moscow in May 2008. Mavrodi’s schemes stole life savings from more than a million Russians in the early 1990s AFP/Getty

“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.

 Not a pyramid: MMM’s website describes the scheme as a circular system where members ‘give help by transferring the money to each other directly’ (Screengrab)

Not a pyramid: MMM’s website describes the scheme as a circular system where members ‘give help by transferring the money to each other directly’ (Screengrab)

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”.

“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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