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.”