Thursday 19 January 2017

MMM Nigeria Ponzi Scheme And The Curse of ‘Herd Mentality’

MMM Nigeria
What Is A Ponzi Scheme? Business Dictionary aptly defines a Ponzi scheme as a SCAM in which a GULLIBLE group is enticed with the promise of very high returns in a very short time, but is actually based on paying off the early 'investors' from the cash from (hopefully ever increasing number of) new 'investors.' Investopedia reconciles a Ponzi scheme with a pyramid scheme in that both are based on using new ‘investors' funds to pay earlier participants. Essentially, such schemes are synonymous with ‘’Robbing Peter to Pay Paul’’. A typical Ponzi scheme flops when the cash outflow exceeds the cash inflow. Ponzi scheme is named after Charles Ponzi (1882-1949), an Italian immigrant to the United States who, during 1919-20 collected more than fifteen million dollars from some 40,000 enthusiastic depositors by promising to double their investment in 90 days.

From the above explanation, anyone still in doubt that MMM Nigeria and similar platforms are patent Ponzi schemes?

MMM Nigeria Crises

Since resuming operations on 13 January 2017 from a one month ‘coma’ (recall that MMM Nigeria shut down operations on 14 December 2016), the Ponzi scheme keeps vacillating, changing the goalpost at the middle of the match. Despite participants providing help with hundreds of thousands and millions of Naira, MMM Nigeria says only ‘poor’’ participants will be processed in the interim. Subsequently, N31,000 was set as the maximum withdrawal limit. Monies of those who ‘’provided help’’ (PH) running into hundreds of thousands of Naira are ‘trapped’ in the system thereby fuelling aspersions and frenzy.

Frank MMM Warnings, Disclaimers
Beggar’s belief how folks stake hundreds of thousands, millions of Naira on a Ponzi scheme in the guise of changing the world despite SALIENT warnings, disclaimers on the MMM website which include:

1.     There are no guarantees and promises! Neither explicit nor implicit.
2.     There are neither investments nor business! Participants help each other, sending each other money directly and without intermediaries. That’s all!
3.     There are no securities transactions, no relationship with the professional participants of the securities market; you do not acquire any securities. (Do you need them? :-))
4.     There are no rules. In principle! The only rule is no rules. At all! Even if you follow all of the instructions, you still may "lose". "Win" might not be paid. Without any reasons or explanations.
5.     And in general, you can lose all your money. Always remember about this and participate only with spare money. Or do not participate at all! Amen.

Despite the fact that MMM founder - Sergei Mavrodi is a convicted Russian fraudster, series of point-blank warnings on MMM Nigeria website and repeated warnings by Nigeria’s Securities and Exchange Commission (SEC), seemingly educated but gullible, greedy, diehard adherents of MMM (Mavrodians as they call themselves) vouch for the schemes legitimacy, credibility and champion it as ‘god sent’. When reminded of the inherent risks, dyed-in-the-wool Mavrodians retort - ‘’I stand with MMM’’, ‘’is it your money’’, ‘’you are jealous’’. I now see how easy it is to sell ice to the Eskimos. Mavrodians claim they want to ‘’change the world’’ by providing help (as philanthropists wey dem be) to total strangers. Question is, in the absence of the 30% interest that MMM pays, how many participants will ‘’provide help’’ of say two million naira to a stranger? Where does the 30% ‘interest come from? Brazen greed camouflaged as benevolence!

MMM’s Trail of Sorrow, Tears And Blood
One Tobechukwu Okeke, a final year student of Agricultural Engineering of the University of Nigeria, Nsukka (UNN), who is also reported to be an MMM participant committed suicide. A Benue State indigene identified as Adekole reportedly attempted suicide after losing N750, 000 meant for his forthcoming wedding to the MMM Ponzi scheme. The Vice Chancellor of Osun State University, Prof. Labode Popoola, asserted that some students of the school invested their tuition fees in MMM leading to the over N2bn debt students owe the school.

Factors Fuelling Ponzi, Sports Betting Schemes in Nigeria
One of our problems in Nigeria is that original ideas are not common. Open a barber shop today in your street and start to rake in turnover, multiple shops spring up soonest offering the same service. This is why there’s proliferation of Ponzi schemes, sport betting platforms in Nigeria. In some families, parents and children are involved and "compare notes’’. Indirectly, such parents tell their wards that money can be earned without some effort (physical or intellectual)? Remind me if the likes of Bill Gates, Mark Zuckerberg, Dangote, Mike Adenuga, Cosmas Maduka (Coscharis) became billionaires through Ponzi schemes, sports betting? High rate of unemployment, job losses, economic recession, ignorance and herd mentality are some of the factors blamed for the proliferation of Ponzi and sports betting platforms in Nigeria.

Variants of Ponzi, Sports Betting Platforms Doing Business in Nigeria
As we say, Nigerians no dey carry last! My research unveiled about 18 get-rich-quick, ‘’Rob Peter To Pay Paul’’ Ponzi schemes ‘doing business in Nigeria’. They include: MMM Nigeria (, MMM Express, MMMBTC Online, NNN Nigeria ( Get Help Worldwide, GHW (, Zar fund (, E-cooperative online, Givers forum (, Crowd rising (, Icharity (, Ultimate cycler (, MegaCycler, RevoSquad, MutualGrant, Invest Cash Out (ICO), Digital Portal Club, TwinKas, DonationHub, MySureCash, ExEarn, amongst others. Similarly, sports betting platforms in Nigeria include: Nairabet, Merrybet and Bet9ja, Bet365Naija, LovingBet, BetColony, WinnersGoldenBet, StakersDen, 360Bet, 1960Bet, Surebet247, Baba Ijebu, amongst others.
NNN Nigeria
Ultimate Cycler

What is 'Herd Instinct or Mentality?'
A herd instinct or mentality is a phenomenon symptomatic of a lack of individual thoughtfulness, decision-making, causing people to think and act in the same way as the majority of those around them. Powerful emotions of fear, superstition, greed and envy, peer pressure, co-workers, community and religious leaders, media spin; anonymity of social media and the internet subconsciously drive people to herd instinct. Herd mentality is also referred to as: Bandwagon effect, Collective intelligence, Conformity, Crowd psychology, Group intelligence, Groupthink, Herd behavior, Monkey see, monkey do, Peer pressure, group or mass hysteria.
Zar Fund
Herd mentality in Finance, Sporting Events
In finance, a herd instinct relates to instances where investors settle for the same or similar investments primarily because many others are investing in such. Participating in MMM can be likened to herd mentality. Herd instinct could be blamed for bubbles in the stock market. As Daniel J. Howard, a marketing professor at Southern Methodist University, aptly puts it, “Stock market bubbles and crashes are caused by herd mentality. It’s scary to me because we make our own heaven, and we make our own hell.” Another area where this phenomenon exists is in sporting events. Some people support some clubs or teams because of one sentiment or the other - their friends, colleague’s or family members  support them or even because the club is an underdog.
iCharity Club
Herd Mentality in Politics
There’s also an element of herd mentality in politics. Sometimes people are sympathetic to certain politicians, candidates not because of their credentials, attributes but because of emotions, sentiments or simply because other people around them support such candidates or because such a candidate is been intimidated by the opposition. Many Nigerians were sympathetic to Rotimi Amaechi then not because he’s a saint but because they perceived he was been hounded by the Jonathan administration. People were surprised how Ayo Fayose trounced sitting governor – Kayode Fayemi despite the later seen to be more cerebral. During the debate as to whether or not APC presidential candidate - General Muhammadu Buhari possessed requisite minimum academic qualification - O’ levels to contest the 2015 presidential elections, some Nigerians boasted they would still vote for Buhari even if he presents a NEPA bill as his school certificate. Now they know better. Despite the plethora of faux pas credited to him including his infamous “grab them by the pussy” gaffe made by Trump, diehard supporters –women and men resolutely stood by him. Herd mentality possibly swayed the Brexit referendum despite overwhelming evidence that exiting the EU would affect the UK.


MMM Nigeria is fast losing the confidence, trust many participants reposed in the scheme. Mavrodians are increasingly reluctant to ‘’provide help’’ (PH) and potential converts are cagey. The die is cast. The end is imminent. As my Yoruba pals will say, MMM = Mokun Mogbe Modaran. Early entrants and MMM guilders made a killing when the going was good. Many guilders reportedly got streams of help (GH), outrageous bonuses running into millions of naira from their downline but seldom provided help (PH). Taking risks isn’t bad but being foolhardy is. Beware of herd mentality. Wisdom is knowing when to move on. In Igbo we say, – ‘’onye aghogburu ka agbara’’.

Written By:

© Don Okereke
(Security Consultant/Analyst, Writer)
Twitter: @DonOkereke

Holistic Security Background Checks Limited for Bespoke Criminal Record Checks, Employment Verifications, Due Diligence & Private Investigation, Background Checks in Nigeria, Security Training And Consultancy, Risk Management and Advisory Services etc.

1 comment:

Albert Stark said...

Thanks for sharing this article. I have been looking for something like this for a long time. There are only a few articles available on this topic in detail.