News December 15, 2016 at 03:14 pm

More Than 2 Million Nigerians Set To Lose Money in Russian Ponzi Scheme

Fredrick Ngugi | Contributor

Fredrick Ngugi December 15, 2016 at 03:14 pm

December 15, 2016 at 03:14 pm | News

Sergei Mavrodi (middle), the founder of Mavrodi Mondial Moneybox in a Russian court. Photo Credit: Mail Guardian

More than two million Nigerians will lose their money in the Russian Ponzi scheme known as Mavrodi Mondial Moneybox (MMM)  after it abruptly suspended its operations in Nigeria citing heavy workload on its system. In a message sent to its members via Twitter on Monday, the scheme announced that all of its operations have been suspended for a month.

The scheme has been operating as a mutual aid fund, requesting members to help each other with cash donations for guaranteed returns of 30 percent per month. It has depended on members to pay each other without running a central bank account or physical address.

Registered members are directed by the schemes operators to donate money to fellow members and after a month they get back the amount they donated plus a 30 percent interest, all of which is paid by other users, Quartz reports.

Bad Publicity

MMM, whose popularity in Nigeria has grown exponentially over the last year, blames the Nigerian government for its woes.

In an effort to protect Nigerians from fraudulent money schemes, the Nigerian government has of late stepped up its efforts to discourage people from participating in MMM and other similar schemes.

The Nigerian Central Bank and the country’s Economic and Financial Crimes Commission have been running numerous campaigns against the Russian scheme and are currently investigating its operations in Nigeria.

Although most MMM members in Nigeria have heeded the government’s warning and stopped making payments, those who were due to receive their returns for the past month won’t be able to do so as the system is no longer operational.

Inconsistent Alerts

Since the scheme announced its plan to suspend its operations, confused members have taken to Twitter to express their shock and frustration with some accusing the scheme operators of giving contradictory details about the closure.

Scheme operators maintain that the one-month suspension is just a measure to ensure the system is stable and sustainable.

Some people also claim that MMM’s operations in South Africa went through a similar freeze last year and after 30 days everything was back to normal.

Despite numerous warnings, millions of Africans continue to lose their hard-earned money to get-rich-quick pyramid and Ponzi schemes.

What’s even worse is the fact that most of these victims are poor Africans who borrow loans from banks to invest in the schemes with the hope of making quick profits.

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