Thousands of risk-taking Zimbabweans lost their hard earned dollars two days ago when self acclaimed financial freedom platform MMM global Zimbabwe crashed.
The social financial network, which relied on an accelerating number of new members to pay off the old, abruptly terminated its services last week leaving participants stranded.
The scheme advertises itself as a mutual aid fund under which recruited members contribute money to assist others and are promised investment returns of 30 percent per month. Some of the people left counting their losses told The Herald that they received emails that the scheme had been suspended until September 15.
It was gathered that the Reserve Bank of Zimbabwe, the equivalent of Nigeria’s Central Bank, warned people that the scheme was fraudulent and there was no legal recourse in the event they lost their money. Yet some people wen ahead and invested.
However, an MMM global consultant, who identified himself as Lucas from the Zimbabwe arm of the group said it was only a pause and not a collapse.
He said, “I have received a lot of inquiries from MMM participants in Nigeria about a news article that appeared in some section of the media. The general question from Nigeria is “has MMM Zimbabwe crashed?” Please note that MMM E.Africa where Zimbabwe falls under has not and will not crash. The only notable thing to write about is the Pause mode effected from 10 August and lifted on 6 September. It was to build PH reserves. It has since been lifted and the GH train is slowly and surely moving. Also note MMM E.Africa is not linked to MMM Nigeria, and whatever happened, is happening and will happen in MMM E.Africa has no influence or effect whatsoever to MMM Nigeria.”
In May, 2016 South African blog businesstech.co.za reported that the scheme failed in the country too. The group had reportedly claimed that the scheme closed up because of media and government persecution.
In January, this year, Chinese investors were warned by the Chinese Government about MMM Global and MMM China. The Chinese government believe that those schemes — and sites like them — are illegal. In 2015, Yury Chikhanchin, the Director of the Federal Financial Monitoring Service in Russia warned about the future collapse of the MMM Pyramid Scheme of Sergei Mavrodi in China.
The scheme was reportedly setup by one Sergei Mavrodi, a Russian criminal and a former deputy of the State Duma. According to reports, Sergei Mavrodi was in 2007 found guilty in a Russian court of defrauding 10,000 investors out of 110 million rubles ($4.3 million).
Nigerian central bank has also warned Nigerians against the scheme.