No one has ever dug deep into the origines of MMM global which came into nigeria when we were in a difficult economic situation, when prices of goods were never stable and always going up, salaries being slashed, allowances being removed for civil servants, state work force being cut down to reduce expenses and private firms either firing workers and citing their salaries and then MMM global came promising Nigerians a 30% increase of their money which may read 100% at the end of the month. Many stories were said, many doubted and many laughed it off but for those who invested they finally had somting to show as prove that it actually works and in turn many Nigerians put in lots of money into MMM global thus anyone in Nigeria saying MMM global is a scam may not have much of an audience.
So for a briff moment let’s look at the inner corridors of MMM global, to shock a few MMM global started off as an office equipment importer which was founded in 1989 in Russia by Sergei Mavrodihis brother Vyacheslav Mavrodi, and Olga Melnikova
and thus the initials MMM whas gotten out of the first letters of their surname. Their story gets very interesting when in 1992 Russian tax police accused MMM of tax evasion”a deliberate decision of a tax payer or a company not to pay tax”, just for the record tax evasion can land any big cooperation or any big individual in a well organised society into hot waters. Well this lead to MMM-bank clapasing and MMM had serious problem obtaing financial support for it’s operations, well, MMM did two things,first they switched into the financial sector Offering American stocks to Russian investors and secondly MMM-invest was created for the purpose of collecting vouchers during privatisation, well as history has it the two steps failed.MMM broke the bank in 1994 when they promised investors a 100% on annual returs and thus, MMM grew so big that in February 1994 MMM reported dividends of a staggering 1000% Which lead to an aggerasive television advertisement campaing where they used “ordinary” characters that viewers could identify with. The most famous of them, a “folkhero” of early 1994, was Lyonya Golubkov.
Guess ? My fellow nigerians ,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.
Another effort which attracted the public was their give away trips to all Moscow citizens on a particular day.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%.
All was going roosey ontil on the 22nd of July 1994 the police closed all offices of MMM for tax evasion At that point, Invest-Consulting, one of the company’s subsidiaInvest-Consultinghan 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. Well history has it that 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.
With all going sour and with the help of a distant relative they 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 Commillion, losses of victims were at least USD 5.5 million.
After a long chase Mavrodi was caught and arrested in 2003. While in costody, he was given audience january 31, 2006 to read the document of 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. He later went on to creating yet another pyramid scheme called MMM-2011.
With the level of scandal against MMM, it lead to thougher regulations in the Russian stock market and many Russian individuals were very skeptical about any joint stock companies.
After a long sabbatical as I would call it, MMM global started operations in 2015 with the same business format of 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.
Opening the year of 2016, in January precisely, the Chinese government banned MMM global on all grounds claiming it was a scheme.
In 2016 MMM global lunched a website targeting the Nigerian audience.
Guys feel free to share your views.