The founder of alleged ponzi scheme MMM, Sergey Mavrodi has written to the Nigerian Government in what critics see as a desperate item to save the scheme from an imminent collapse. In an unprecedented move for the scheme in Nigeria, the letter attempts to warn the government of the “dire consequences” of a collapse of the scheme considering the hike in rhetoric from the National Assembly against the scheme.
We read through the letter and observed the following red flags. Our comments follows;
1.”What are you trying to get? Do you want the MMM System to collapse and millions of people to suffer?”
Comment:This was the very first sentence of the letter. Here he confirms that the scheme is facing an imminent collapse if the scheme continues to come under “constant attack”. It’s a confirmation that the risk of not getting your money back when you contribute is very high.
2.“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.”
Comment: In the second red flag, he basically admits MMM is highly risky and that it is by no means an investment. If the scheme is not an investment then it means there is no profit being created and thus a 30% interest being paid to contributors is purely built on nothing. It simple means that participants of the scheme are robbing Peter to pay Paul and will continue to do so so far there are more Peters to rob.Once Peter’s stop showing up then the Paul’s lose all their money.
3. “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?”
Again, he buttresses the point that critics of MMM have been saying. This scheme produces nothing and creates no value. This surely means it adds nothing to the GDP, cannot be taxed and is not sustainable in the medium to longterm. He also confirms that the scheme takes from the rich and pays the poor. It’s ironic that the rich who contributes money to the scheme still gets their money out at a 30% thus an even higher quantum of Naira upon withdrawal.
4. “As for your statement that “everything will collapse soon”. The system has been working in Nigeria for a year, and according to your estimates, the total number of members now is about 3 million people. In Nigeria the population is approximately 195 million. Can you calculate? Will it be “soon”?”
In this final parting shot, he boasts that the scheme has about 3 million people currently participating in it and has potential to grow as Nigeria has a population of about 195 million people. He sure has a point there considering how gullible and greedy some Nigerians can be. However, what he forgets to add is whether this number is still growing as it was 3-6 months ago? Certainly not every one of them still contributes! Also, the scheme doesn’t just rely on numbers it also depends a lot on the amount each participant is contributing. If the pool of the so-called “rich people”(,who are likely getting discouraged due to the negative press being created by the scheme) reduces in numbers then this endangers the scheme even more.
Finally, the letter from Sergey Mavrodi is a hand writing on the wall for those who have money currently stuck in MMM and those who plan to put money in it. This is a desperate attempt to allay the concerns of desperate operators of the scheme. This move might back fire as this is now a clear indication to the government that their role of protecting its citizens is being usurped by a force that is within their grasp. It is unlikely that any reasonable government will see this letter and stay mute. If authorities were looking for any reason to investigate this scheme, the this letter provides one. At least, the EFCC, SSS and other agencies cannot now claim that no one has complained. The founder himself just did!!
Hater of mmm, may u not see sleep as long as mmm last.
Who so ever that’s involved in this will live to see the positive impacts from mmm in the life’s of the Nigerian citizens and Africa, mmm has come to stay,and nothing will happen to mmm, because mmm is from the host of heaven, God said I will make a way for you where there is no way, mmm is an Angel that God has sent to his people in this present time of recession to prove himself to upgrade and uplift lives, and more over mmm has not just only participants from Nigeria it has some indigenes of heaven in it, I mean ambassadors of heaven hear on earth, so there is no fear mmm can only collapse if they participants seized to pH’ and only GH, just like the BANK the depositors money is been given to the withdrawers, if all the account holders or patronisers of GTB bank or even any bank goes to withdraw all their Money on a single day week month or even a year and there are no depositors what will happen?
To all mmm participants do not fear because this are all tricks to put fear in your hearts,
Nothing can make mmm to collapse exept you the participants, mmm is not mavrodi, mmm is not the website, mmm is you, you are the mmm, you are the only one with the ability and capacity to make mmm collapse, and not to collapse, mmm has come to stay, They past is history, Tomorrow is misery Today is a gift, make use of what God has given to you don’t give in to fear, don’t allow fear to make you to deviate from mmm, F.E.A.R ,false, experiences, appearing, real, it’s all false, mmm is strong with you mmm is stronger.. ….Cheers u are not born to be poor or suffer in life, mmm is a platform created with the love and fear of God,for people to help each other and also to develop trust on one another.
from: Hon Conveyor.
LONG LIVE MMM.
Wow!
Wow! Just wow!!
Hello. a fan of Nairametrics here,
I don’t think the purpose of the letter is mainly to allay the fears of people on the fence about investing or those on the fence.
while it also does that, I believe his main purpose in writing this letter is to blame the government for the collapse of the scheme when it eventually occurs.
You need to understand this guy has been in this business for years, he has started many ponzi schemes and after they crashed he improved on the model in the next one.
He is quite smart i have to admit, he is playing on peoples desperation and greed like you mentioned, and this letter is just a final step so that when he moves to the next country and the citizens there too start investigating the scheme to find out if its a scam, they will see records of the “warnings” he gave to the Nigerian govt. and how in the end it was the govt that caused the scheme to fail.
That plus the main selling point that its a risk but also everything else in life is also a risk just kickstarts a whole new money making cycle for him again.
A few of the things that never fail to drop my jaw 1. the venomous vehemence with which faithfuls defend(ed) the scheme 2. the sheer ignorance/blind disregard of the red flags of the scheme 3. the fallacious ascription of the scheme to ideas like “love”, “help”, “God”, “financial security”. 4. the blatant demonstration of a complete lack of understanding of the scheme or an indifference to this understanding. The trouble is whether the scheme is unfrozen or not, a crash is certain to happen and whenever it does, several people will suffer because their funds have been shared out as “returns” to older members, leaving them with nothing. You don’t need to be genius to know this. I am sorry for those who have lost money and I hope they survive, learn and grow from the experience.