Mavrodi Mondial Moneybox (MMM) - it is an Old Russian Ponzi or Pyramid Scheme
Mavrodi managed to escape arrest until 2003, when he was captured and convicted for holding a fake passport and tax-related offences. After he was released from prison he started MMM branches in Russia, Ukraine, the Baltic States, and African, claiming he wanted to "destroy the global financial system." He claims that MMM is a "community of ordinary people, selflessly helping each other, a kind of the Global Fund of mutual aid."
In 2011 he announced the establishment of an investment pyramid called MMM-2011, that was declared bankrupt in 2012. By that time, he started project MMM-2012, a financial scheme that collapsed shortly after it was created.
MMM claims that participants who donate money are eligible to request for the amount donated plus 30% interest after a month. But, without any of form of investments, products or services, how do MMM make money in order to pay back participants with interest? The truth is, money from new participants or members is used to pay old participants. And, once MMM is unable to recruit new participants, the scheme will crash, causing participants to lose their money.
Once of MMM's most popular websites is: www.nigeria-mmm.net.
Online users are asked not to register or participate in any activities on any of Mavrodi Mondial Moneybox’s websites. And, participants who have already registered are asked to stop sending money.
What is a Ponzi or Pyramid Scheme?
A Ponzi or pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products or services. As recruiting multiplies, recruiting becomes quickly impossible, and most members are unable to profit; as such, pyramid schemes are unsustainable and often illegal.
In a pyramid scheme, an organization compels individuals to join and make a payment. In exchange, the organization promises its new members a share of the money taken from every additional member that they recruit. The directors of the organization (those at the top of the pyramid) also receive a share of these payments. For the directors, the scheme is potentially lucrative - whether or not they do any work, the organization's membership has a strong incentive to continue recruiting and funneling money to the top of the pyramid.
Such organizations seldom involve sales of products or services with value. Without creating any goods or services, the only ways for a pyramid scheme to generate revenue are to recruit more members or solicit more money from current members. Eventually, recruiting is no longer possible and most members are unable to profit from the scheme.
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