MMM is a pyramid that will soon burst – Senate warns Nigerians
The Senate Committee on Banking, Insurance and other Financial
Institutions has warned that the ponzi investment scheme, MMM, is a
pyramid that would soon burst.
It then called on Nigerians to be wary of the investment model that
originated from Russia. MMM involves directing clients to make money
available for an anonymous person with a promise of 30 per cent return
within a month.
But speaking in an interview with Saturday Vanguard, Chairman of the
committee, Senator Rafiu Adebayo Ibrahim and other members of the
committee alerted Nigerians to the dangers of investing in MMM.
“Any Financial institutions of any kind that is not under the
regulation of a Regulator such as MMM is a pyramid that will soon burst.
We engaged the CBN and they have issued a statement in the recent past.
So Nigeria should be wise and know that there is no free money
anywhere. One wonders which investment can yield 30% flat any where in
the world,” he said.
For Senator Gbolahan Dada, APC, Ogun West, “It is important for
members of the Public to know this fact. MMM was a Russian company
founded in 1989. The company was established by Sergei Mavrodi, his
brother named Vyacheslav Mavrodi, and Olga Melnikova. The name of the
company was taken from the first letters of the three founders’
surnames. MMM could be called a wonder bank. Over 5 to 40 million people
lost up to $10billion in the 90s when it was introduced. The company
was shut down by Russian Police in 1994 and declared bankruptcy in 1997.
“It is unfortunate that some unscrupulous Nigerians are capitalizing
on the current economic hardships to defraud unsuspecting Nigerians by
encouraging them to part with their hard earned money with
mouth-watering interest or returns.
“MMM does not contribute or add value to the economy because the
records of such transactions are not kept and not made open to the
public or regulatory authorities. It is a product of fraud and nothing
good comes from fraud.
“The operator pays returns to the investors from new capital acquired
from new investors and not from legitimately earned profits. The
operators entice investors with mouth watering offers. The short term
returns are abnormally high and unusually consistent. They may struggle
to pay the first returns but would bolt away with subsequent capital or
deposits made by investors.”