Lots of Zimbabweans are in a financial trauma as you read this, all thanks to the popular Ponzi scheme called MMM.
Thousands of people living in Zimbabwe, among them civil servants, vendors and more, were said to have lost thousands of dollars to fraudulent online pyramid scheme MMM Global Zimbabwe after the system collapsed recently. The social financial network, which relied on an accelerating number of new members to pay off the old, abruptly terminated its services without any prior notice last week leaving participants stranded.
Ihareportsreports that these Zimbabweans joined the online investment scheme with the sole aim of “getting rich quickly”. It was said that the Reserve Bank of Zimbabwe warned its people about the system, saying the scheme was fraudulent.
The scheme prides 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.
MMM stands for Mavrodi Mondial Moneybox and takes its name from its founder, Sergei Panteleevich Mavrodi of Russia. He founded MMM in 1989 and the scheme was declared bankrupt three years later leading to the disappearance of Mavrodi until his arrest in 2003.
While some people who were skeptical about the scheme started with small amounts, it is believed some poured in thousands of dollars anticipating higher returns. The RBZ said the schemes were fraudulent as existing investors were ‘paid money not from genuine market investment of their funds, but from contributions made by new investors, until a point when the scheme can no longer attract new investors.”