© 2018 - International Centre for Investigative Reporting
FLASHBACK: How Mavrodi’s MMM caused three million Nigerians heartache
Sergei Mavrodi, 63-year-old Russian businessman and founder of the Mavrodi Mundial Moneybox (MMM) Pyramid scheme, died of heart attack on Monday.
Mavrodi was hospitalized on Saturday night from a bus stop located at Polikarpova Street, after an ambulance had been called by a passer-by after he complained of weakness and pain in his chest. In the end, the doctors could not save him. Not like many Nigerians would have wished them to, anyway. Such was the heartache that he caused millions of them.
HEARTBREAK FOR MILLIONS
Mavrodi’s MMM financial pyramid was a popular Ponzi scheme and Russian company estimated to have caused some five to 10 million people losing their savings — the bulk of them from Nigeria. The scheme promised returns of 20% to 75% per month, alongside bonuses from referrals and lotteries. However, it collapsed as soon as the number of new clients stopped growing.
Between 2011 and 2016, Mavrodi launched the schemes in India, China, South Africa, Zimbabwe, and Nigeria, but the company’s operations were subsequently folded or were shut down in many countries, including Nigeria. Its effects in Nigeria, where it recorded great success — likely because of a combination of greed and hard-hitting economic recession — still remain fresh in the memories of many.
With Christmas approaching in 2016, MMM placed a one-month ban on all withdrawals, starting from December 13. It blamed the action on “a heavy workload on system”. The freezing of accounts reportedly affected about three million Nigerians, and happened just a day after Sergey Mavrodi said the scheme had done a lot to improve the welfare of Nigerians and redistribute wealth.
N18 BILLION DOWN THE DRAIN
The Nigerian Deposit Insurance Corporation (NDIC) said the estimated three million Nigerians who participated lost N18 billion when the company suspended payment to investors.
MMM’s heartbreaking message had stated: “Dear members, as usual in the New Year season, the system is experiencing heavy workload. Moreover, it has to deal with the constant frenzy provoked by authorities in the mass media.
“The things are still going well; the participants feel calm; everyone gets paid – as you can see, there haven’t been any payment delays or other problems yet – but!… It is better to avoid taking risk, Moreover, there are just three weeks left to the New Year.
“On the basis of the above mentioned therefore, all confirmed Mavros will be frozen for a month. The reason for this measure is evident. We need to prevent any problems during the New Year and then, when everything calms down, this measure will be cancelled, which we will definitely do. We hope for your understanding, Administration.”
DISAPPOINTMENT, AGONY, SUICIDE
In January 2017, the company resumed payment, starting with paybacks “to the poor and the economically disadvantaged”. But this was not before tragedy had befallen many Nigerians who participated with what was not “spare money” as advised. Many had invested all their savings, and thus had their hopes suddenly dashed.
Gloria Samson, a woman based in Benue state who had participated in the scheme, in fact took her life after the mass freezing of accounts, leaving behind a husband and two children. On December 28, she bade her children bye, apologised for any wrongdoing she might have committed against them, but never returned alive. She was later discovered to have drowned herself in the Benue River, and was said to have invested a N400,000 loan into the ponzi scheme.
In the November preceding that time, Tobechukwu Okeke, a student of Agricultural Engineering at the University of Nigeria, Nsukka, was also found to have hung himself in his room. His neighbours suggested he was in some debt and had lost money to the scheme. His last Facebook posts also showed he was involved in the scheme and was inviting others to join.
In August, the scheme crashed a second time. Then a third followed in October, with Andrew Marc, the Top Guider, announcing on his Facebook page that there was no more ‘Provide Help’ (PH) in the system.
In September, a woman, identified simply as Ogochukwu, was reported to have fled her residence after losing the sum of N4.5m (a monthly contribution by members of a group), to the scheme. Ogochukwu, who resided on Anuoluwapo Street in Ejigbo area of Lagos State, fled to Anambra State, fearing retaliation from the hundreds of artisans and motorcycle operators whose money she had invested.
Considering the widespread impact of the ponzi scheme in Nigeria, including not only the loss of hard-earned money but also the lives of loved ones, there can be no doubt Nigerians will not be forgetting the founder, Sergei Mavrodi, anytime soon – even in death.