Many will be familiar with this mmm and the testimony people share about it make it seem to be real yeah am going to say it is real also but It will soon crash ,am going to share mmm history and how they operate in some countries in past years so sit back and read .
History of mmm
МММ was a Russian company that perpetrated one of the world’s largest Ponzi schemes of all time, in the 1990s. By different estimates from 5 to 40 million people lost up to $10 billion. The exact figures are not known even to the founders.
How mmm work in Russia
.
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.
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.
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 .
Also stock generation .
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 ofvictims were at least USD 5.5 million.
In south Africa
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.
Convicted Russian fraudster launches financial scheme in SA
Sergei Mavrodi, a convicted Russian criminal who served jail time for fraud, appears to be successfully running the same pyramid scheme that swindled thousands of Russians out of their hard earned rubles here in South Africa.
According to The Moscow Times , Mavrodi was found guilty in 2007 of defrauding 10 000 investors out of 110 million rubles, worth some $4.3 million at the time.
Mavrodi, described by TIME Magazine as “Russia’s Bernie Madoff”, developed MMM as, “a crude financial pyramid scheme”, in the 1990s.
Having cheated millions of Russians of their savings, writes TIME, he served a four-year sentence for fraud and then in 2011 reappeared plugging MMM-2011.
MMM-2011’s business model appears very similar to MMM South Africa, a “social financial network” promising 30%-per-month returns. It claims it is not a high-yield investment programme (HYIP), but simply “a community of ordinary people, selflessly helping each other, a kind of the Global Fund of mutual aid”.
“This is the first sprout of something new in the modern soulless and ruthless world of greed and hard cash. The goal here is not the money. The goal is to destroy the world’s unjust financial system. Financial Apocalypse!” the company declares on its local website.
MMM claims to do nothing more than connect its participants, who then transfer money to each other directly “without intermediaries”. Once creating a Personal Office (PO), participants are given “Mavro” – the internal currency of the system – equal to whatever amount they have invested (a minimum of R100), which then grows at a rate of 30% per month, according to MMM.
This translates to 360% per annum. The Consumer Protection Act (CPA) describes as a “multiplication scheme” (i.e. a Ponzi scheme) anything that promises an investor an effective annual interest rate 20% above the repo rate, which is currently at 6%.
Participants must transfer money to another MMM member’s bank account before they are paid their Mavro. No explanation is given as to how these investments earn such high rates of interest. “There is no central account in MMM, to collect all the money of participants (and from where they could be stolen easily). All the money transfers are made directly between participants,” MMM claims.
Members can also earn registration bonuses, referral bonuses,manager’s bonuses and bonuses for appearing in video testimonials.
Established in 2011, MMM claims to have a presence in 107 countries and more than 138 million participants around the world.
Its website lists only nine countries, including Kazakhstan, India, Bangladesh and the Philippines.
This journalist received an unsolicited SMS from MMM last week, advertising its 30%-a-month returns. It appeared to come from a number in Cambodia.
Sergei speaks to South Africa via YouTube
MMM South Africa’s Facebook page has more than 22 000 likes and is used to disseminate weekly news from Mavrodi: YouTube videos of him discussing the business model in Russia with English subtitles.
In his most recent YouTube video, released last week, Mavrodi remarks, “Everything is wonderful in South Africa. The dynamics of the development are high. The participants and managers are active… However, I remind that it doesn’t mean we should relax and do nothing. We have to work hard, apply all efforts, develop the system, and everything will be even better… Nevertheless, I repeat that generally everything is wonderful, and you see it. Everybody is paid. So the dynamic of the development are growing constantly (sic).”
Mavrodi appears to sign off all his YouTube clips with the message, “I believe that the financial apocalypse is inevitable. Together We Change the World.”
Based on these videos and an extensive ideological explanation on its website, MMM appears to be a reaction to the established financial system and its exclusion of the majority of workers to the unjust benefit of a select minority.
In 2011, Russia Today reported that MMM-2011 was a “classic Ponzi scheme” that was set to collapse, “leaving thousands of families penniless”.
“The South African Reserve Bank (Sarb) does not comment on or provide any details pertaining to past, current or potential investigations we may be involved in as part of our mandate,” said Hlengani Mathebula, head of group strategy and communications at the Sarb.
Moneyweb could not reach representatives of MMM in South Africa via email or cellphone.
In Nigeria
In November 2015, MMM launched a website targeting the Nigerian
audience, also claiming a “30% per month” return including other acquirable bonuses.The entity was self-described as a “mutual
aid fund where ordinary people help each other.” 2.4 million
people had signed up by late 2016, with the country’s unemployed
as primary targets. Nigeria’s Economic and Financial Crimes
Commission has confirmed that they are monitoring the scheme
Capitec bank closes 2000 MMM
bank accounts
Capitec CEO Gerrie Fourie told Fin24 in an interview on Friday that the accounts were closed to protect the bank’s clients.
“We actually closed over 2 000 accounts that (were) involved in the scheme. Some of the clients became extremely violent and we had to bring in security guards.” Fourie said.
He also said that after the bank was made aware of the scheme the MMM accounts were monitored and then frozen in early 2015.
The MMM Ponzi scheme has been in the headlines a lot recently.
Founder Sergey Mavrodi announced that MMM Global scheme was
shutting down because it was not able to pay out the benefits.
“We regret to inform you that we have to close down the Republic of Bitcoin. It was an experiment, and, unfortunately, it failed,” said MMM Global on Facebook. “We turned out not to able to pay 100% per month.” The scheme’s local branch, MMM South Africa, is one of the companies that are being investigated by the SA Police Service Specialised Commercial Crimes Unit establish whether they contravened the Consumer Protection Act.
The annual report of the South African Reserve Bank’s (SARB) bank supervision department recently released a document showing that the Total number of organisations under review for operating as illegal deposit-takers – also known as pyramid schemes – rose to 41 in 2015 compared to 25 in 2013.
The regulator has closed down 71 schemes since 2011
So nigerians be a egghead not a airhead