The founder of the MMM series of financial pyramid schemes, Sergei Mavrodi, has died in Moscow. According to media reports, Mavrodi was taken to a city hospital from a bus stop overnight Monday after he felt weakness and pain in the chest area, The emergency team has failed to save his life.“He died this morning,” the report said.
In 2007 Sergei Mavrodi was convicted in a Russian court of defrauding 10,000 investors out of 110 million rubles ($4.3 million).
Mavrodi claimed he is not the beneficiary of the donations and he is not used to flamboyant lifestyle.
His true charges of which he was later convicted of is tax fraud though he claimed that MMM scheme is not a business, but a mutual donation program of which there is no law against such.
in November 2016 , Sergey Mavrodi wrote an open letter to the Federal Government to justify the importance of his popular Ponzi scheme in which an estimated three million Nigerians lost a whopping N18 billion.
In the letter, he noted that the MMM “has been working in Nigeria for a year, the total number of members now is about three million people”.
“You say that MMM is bad. Why? Yes, it produces nothing, but nothing gets out of the country either. The money is just redistributed among the citizens of Nigeria. It gets from those who are richer to poorer ones, in this way restoring social justice. What’s wrong with that?
“You have repeatedly stated that “it should be investigated!.. researched!..” It means you know nothing about this System yet; you even haven’t understood how it works.
“And finally. If you know what is right for people, why is the life so bad in the country?”
Over three million Nigerians were participating in MMM before December 2016 when its organisers suspended payment to investors due to its system “experiencing heavy workload.”
By the time the scheme returned in January, few new investors joined and the millions waiting for their payments were left disappointed with majority never paid.
The Nigeria Deposit Insurance Corporation (NDIC) described the scheme as “phenomenon of illegal fund managers, popularly called “Wonder Banks” which have continued to defraud unsuspecting members of the public of their hard earned money.
Both the Central Bank of Nigeria (CBN) and Securities and Exchange Commission (SEC) warned investing public then over the scheme.
According to SEC, the venture had no tangible business model, describing it as a Ponzi scheme, where returns would be paid from other peoples’ invested funds.
