Several reactions have trailed the death of Russian businessman and founder of the popular Ponzi scheme, MMM, with many accusing him of being in possession of the money Nigerians invested in scheme which crashed in December, 2016, an allegation which is far from the truth.
Mavrodi was reported to have complained of weakness and heart ache for which he was rushed to the hospital where he died hours later.
The 62-year-old has been mired with controversies on the legitimacy of the pyramid scheme with Governments of many Countries, warning their citizens to desist from it.
Establishment of MMM
In 1989, Mavrodi established MMM, which was then known as Mavrodi Mondial Moneybox; a financial pyramid in which early investors received their profits from subsequent investors.
It also promised returns of 20 per cent to 75 per cent a month, as well as lotteries and bonuses for investors.
But it did not take long before it went bankrupt and Mavrodi went into hiding because the new investors were no more forthcoming, resulting in a financial loss of an estimated $100 million from close to 10 million people.
On its website, MMM Global 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.
In 1994, he was elected a member of Russian Parliament after he had promised his investors a taxpayer bailout if they elected him to the Duma.
The strategy was to give him immunity from prosecution, but it failed as he was imprisoned after the immunity was revoked.
A Moscow court found him guilty of financial fraud in 2007 and sentenced him to 41/2 years in a penal colony.
Re-launch
In 2011, he launched another pyramid scheme called MMM-2011, calling on investors to purchase so-called Mavro currency units in a bid to get rid of the “unfair” financial system.
“My goal is a financial apocalypse, a destruction of the global financial system. I consider the current financial system unfair; it’s not fair that some people own billions while others have nothing. The system must be destroyed and something else must be built in its place. That’s precisely what I’m working on.”
MMM-2011 was able to function openly as Ponzi schemes and financial pyramids are not illegal under Russian law, but the project was however halted after a few months.
By 2016, he had established the scheme in various Countries like India, China, Western Europe, Canada and Latin America.
The Ponzi scheme was also launched in South Africa, Zimbabwe, Nigeria and some East African Nations, promising returns on investment of 30 per cent a month.
Beginning of Problems
In 2015, the South African National Consumer Commission launched an investigation after it found that something about the scheme seemed illegal.
“We found something, but we’re not going to disclose that… We’re still working with the Hawks. A pyramid scheme (is) fraudulent, fraud is a criminal matter and that can only be investigated by the police.
“There is an inquiry that has been opened. We’re having a slight challenge in the fact that the scheme is being run through the internet.”
The South African MMM later collapsed, saying it could not keep up.
“We regret to inform you that we have to close down the Republic of Bitcoin. It was an experiment, and, unfortunately, it failed.
“We turned out not to able to pay 100% per month.”
It met the same fate in Zimbabwe 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”.
According to one of the locals who invested;
“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.”
The accounts were frozen in September 2016.
Nigeria
The Central Bank of Nigeria was forced to step in, warning consumers not to deposit money in any institution that is not insured by the Nigeria Deposit Insurance Corporation (NDIC).
According to its Communications Director, Isaac Okoroafor, “These people always come with very interesting propositions.
“These are fraudsters who are just out there to collect people’s money and run away as soon as they hit their target.”
Accounts were initially frozen in December 2016, with a promise that it would re-open.
It later re-opened in January 2017, but noted that old investors could not access their investment as the system had crashed.
Reactions?
Here are some reactions captured from Twitter when Mmavrodi died:
@DaminaboEric
MMM, Sergey Mavrodi founder dies of attack in Moscow…
So Amadioha Can Kill Someone In Moscow?
@newscantell
Someone said Sergey Mavrodi died because he was afraid of Nigerians coming to Russia for world cup in June. Man just had to die of heart attack.
He wasn’t a great man but he allowed us know which Nigerian bank is fast and reliable.
I can’t forget the MMM drama.
@no_rookie
MMM founer Sergey Mavrodi is dead. Died of heart attack. U cant eat Nigerians money just like that, ask Abacha
@OgbeniDipo
Sergey Mavrodi, the life-long professional con artist who scams greedy and gullible people is dead.
@O_ssai
Sergey Mavrodi, founder of MMM has been scamming people all over the world without repercussions… just small money he scammed in Nigeria last year…. Dude is dead now.
@dat_ph_boi
Sergey Mavrodi don kick bucket!!
When Baba Durojegbe’s money got hung on that MMM i knew he wasnt going to allow the thing pass like that.
If u know, you know!!
@preeddyboiswags
MMM founer Sergey Mavrodi is dead. Died of heart attack. U cant eat Nigerians money just like that, ask Abacha #mmm
@VoiceOfPerez
MMM founder, Sergey Mavrodi dies of heart attack at 62. How many Nigerian got stroke and died when they got swindled on the false hope his network gave them?
Did Mavrodi “eat” Nigerians’ money
There is no evidence till date that Sergey Mavrodi himself was involved in MMM Nigeria. The system, as flawed as it was, worked by itself as one person convinced another and one “helped” another. Mavrodi himself has caimed that his idea is being demonized by the financial establishment as he was not a wealthy person.
MMM Nigeri was not part of MMM Global as evidence shows that the website was registered by a certain Pastor Ernest Chigozie Mbanefo who, despite evidence, denied it but said the scheme will keep running “till Jesus comes”
Having come under investigation severally, Mavrodi was not accused of actually collecting money himself but of creating a system which was definately going to crash. This argument is however severally countered by those who say conventional financial systems crash too, only they are bailed out by tax payers money.
Mavrodi argued that he wants to destroy the world’s financial system he considers unfair. He was not the first person with this opinion as America’s Founding father Thomas Jefferson is on record to have said in a letter to John Taylor in 1816
“And I sincerely believe with you, that banking establishments are more dangerous than standing armies; & that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale”
