Undying spirit -Unfazed by MMM’s crash, Nigerians embrace more Ponzi schemes

IT happened like a bolt out of the blues. For months, the patrons have smiled to the banks with huge returns on their contributions. And in homes and religious places, it became a veritable subject of sermons for quick and easy money.

But, just as it started, the operators suddenly suspended its operations in Nigeria and threw the contributors into a world of agony. The timing- the Christmas and New Year celebrations were approaching- made it more painful for the patrons.

And everywhere you turned, the popular money-doubling scheme, Mavrodi Mundial Moneybox, better known as MMM, became the talking point. Expectedly, it was a bleak Yuletide celebration for many of the contributors.

Reports across the country had it that some heartbroken contributors who could not contain the agony and pain of the disappointment, coupled with the fear of losing their contributions took their own lives.

There was a report of a final year student of Agricultural Engineering at the University of Nigeria, Nsukka (UNN), who reportedly committed suicide. He was found dangling from a rope in his room at Odenigwe, a community in Nsukka, Enugu State.

According to eyewitnesses, the deceased left a note behind where he apologised to his family. His last Facebook posts allegedly showed he had been involved in the controversial MMM scheme, as he used his page to advertise the scheme. His last post, in September allegedly read: “MMM is enriching lives of millions of Nigerians every day. If you care to join or you have any questions, please send me a message or comment below.”

Some of his neighbours were also quoted as saying that the young man was in debt, some said he was tired of schooling, while others attributed his suicide to the loss of money in a network business he invested into.

In Benue State, a man allegedly attempted to commit suicide by ingesting insecticide on hearing that MMM had frozen accounts of participants in the Ponzi scheme, two weeks to his wedding.

According to reports, the man, identified as Adakole, reportedly invested N300, 000 meant for his wedding in the scheme. Adoke was said to have opted to take his life and consumed the substance over fears that he had lost his investments.

However, despite the shock and pains suffered by the contributors of the scheme, other similar Ponzi schemes have sprung up across the country, with the people surprisingly trooping to join.

Against the backdrop of the economic recession in the country, these different unorthodox financial schemes have continued to thrive, with promises of huge returns on the patrons’ contributions.

The MMM scheme promises a 30 per cent return on investment to members. In their transactions, MMM participants operate with Bitcoin.

But new schemes that have sprung up to fill the vacuum expected to be created by MMM have upped the scale, promising up to 100 percent on operators’ investments.

Astra is an undergraduate of the Open University. Though she is not married, Astra gets a monthly stipend of about N50, 000 from her fiancé as an allowance.

From her monthly N50,000 allowance, Astra contributes N20,000 to Twinkas, another Ponzi scheme. Every 10 days, she earns N40,000, a hundred percent profit return on her contribution.

“I am a student and I don’t work. But my fiancé gives me a monthly allowance. From the money, I contribute N20,000. I get paid N40,000 after 10 days. That is a good return on my investment.”

Encouraged by the mouth-watering return, Astra said she reinvests her main capital of N20,000 and keeps the interest.

“What I do is to keep my interest of N20, 000 and reinvest my N20, 000 capital,” Astra said smiling.

Every 30 days, Astra makes an irresistible profit of N60, 000 on her initial capital of N20, 000. Surprisingly, she said the scary story of the MMM scheme has not affected her in any way. The huge number of contributors to the scheme, she said, assures her of its safety.

“You have different types of contributions, starting from N5000 to N100, 000. Each time I click on any of the contribution options, I see more than 92, 000 contributors. What that means is that, even if it is going to collapse, I would have gotten my own money back. So, I am always encouraged to continue each time I see the number of contributors.”

A similar scheme, My Liberty Family (MLF), was launched with fanfare in the last quarter of 2016 at a hotel in GRA Ikeja, during which the media and would be investors were invited.  It was touted as an economic and wealth creation platform structured to produce financially enabled virtual family members.

The Chief Executive Officer of MLF Multiservices Limited, Pastor Francis Ben-Adesokan, reportedly said of it: “MLF is not a get-rich-quick platform, we are not selling any product, but what we are doing now has been in existence, it is just like Ajo in Yoruba and Esusu in Ibo. But the difference is that, this is online. Here is a virtual family, but the truth is that, things are done virtual to catch up with the trend so that anyone anywhere can participate.”

Explaining further, he said, “when you choose to be a member of My Liberty Family, you would be asked to fulfill an obligation to certain members of your virtual family tree from whose lineage you are coming into the family system. And finally, you would be asked to select either of two options. Both carry different financial rewards.”

Ben-Adesokan said the system allows intending members to grow his/her family tree without any additional effort, “On your part aside from supporting certain family members with the specified amount, this option allows you to receive financial support in excess of N5 million from other virtual family members. This can be within 7 months of your existing in the family, it could be earlier or later, but guaranteed.

“Also, you can join the family with the intention to reproduce three of your kind within 21 days of your existence in the family structure. This option carries a lot of financial benefits; you receive financial incentive at every level of your growth and you are programmed to receive financial support in excess of N10 million from other virtual family members. This can be within five months or seven months of your membership.”

He said in the B Platform, membership is N37,000 while membership for C Platform is N47, 000.

“These three structures are opened to all under the same options 1 and 2 already specified above.

“You can choose to belong in the three structures if you wish or start with one. The three run independent of the others and you are given separate identity numbers. The differences in trees are in the financial obligations required which of course imparts on the financial incentives entitled to.

“If you are a member of B-Family Tree, you would need to support your immediate e-family members with a total of N37, 000. What this does for you is to put you on the path to receiving up to N40 million from the other members within the B Family Tree. C Family Tree is inspired by N47,000 for N50 million in total financial support,” Pastor Ben-Adesokan said.

According to him, trying to source money can be a difficult task, but MLF is here to help people.

“With us, failure and poverty are unacceptable. As a family philosophy, we believe that if anyone within the family is lacking, we will be affected by their sense of lack. Therefore, the prosperity of all in our family is our advantage and we all must contribute our portions to everyone’s success story.”

A similar scheme, Swissgolden, is fast gaining popularity among Nigerians on social media. Findings by The Nation revealed that Gold is a new cover for a Pyramid/Ponzi scheme in Europe and the United States.

With their marketing programme, only a small amount of gold is actually sold by Swissgolden. The vast majority of the money is made by people investing in the scheme.

The catch phrase is that Swissgolden gives investors the possibility to build a very lucrative business since gold is a unique product that never depreciates. It offers investors the opportunity to double their money in a month with no risk.

Enitan Olukemi, one of the promoters of the scheme in Nigeria, said she chose the scheme because the profit is huge.

Refusing to see it as a ponzi scheme, she said: “The profit is huge and you invest only once and never stop earning. Also, it is registered in the UK and Switzerland, so there is insurance. Also, if you try the investment and it does not work, refund is provided by the company either in gold bars or equivalent cash. It is a business/investment in gold, so long as gold remains valuable.”

Oladeji Salau is not fazed by the MMM debacle. He is a contributor to Online Cooperative, a similar money-making scheme.

Salau said he started the scheme with the sum of N1000 and has earned the sum of N40, 000 within the first month of joining the group.

On how it works, Salau said: “It is a win-win programme. You start by contributing N1000, after which you would be expected to introduce four people to the scheme.

“To start, you would be given a link to open. Shortly after that, you’ll be asked to pay the sum of N1000 within 24 hours. You would start earning the moment you bring four people on board. From that point on, your earning would continue to increase as long as those you introduce bring more contributors.”

Asked what the motivation is, Salau said he is encouraged to join because he is sure of the safety of his money.

“This is very easy. For me, I have already earned N40,000 on my N1000. And there is more room for me to earn more,” he said with pride.

Operators of Helping Hands International (H2i) describes the scheme as an empowerment-based- membership programme. According to them, it is a global opportunity borne out of the passion for total human capacity development and for helping the less-privileged.

According to Mrs. Luzviminda Mac-Elvis, the Founder and CEO, “my vision is to help the helpless and empower the weak. Helping Hands International (H2i) is my vision and with it we shall change the world, one at a time,” she said.

The organisation, according to reports, has had much success in Nigeria, with membership and centres in each state of the country.

For the scheme, members join with N6, 600 and afterwards stand to benefit donation from a pool after introducing two people. There are stages of growth. The Masters and Ministers, as they are called, are said to enjoy property support services and loans of up to $12,000. They have five stages, namely Associate, Master, Super Master, Minister and Prime Minister.”

Wikipedia describes a Ponzi scheme as a fraudulent investment operation where the operator, an individual or organisation, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources.

Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent.

How Ponzi schemes work

Operators of Ponzi schemes operate through the following steps:

  1. Convince a few investors to place money into the investment.
  2. After the specified time, return the investment money to the investors plus the specified interest rate or return.

iii.            Use success of earlier investors to convince more investors to place their money into the system. Typically, the vast majority of the earlier investors will return.

  1. Repeat steps 1 through 3 a number of times. During step 2 at one of the cycles, break the pattern; in some cases, instead of returning the investment money and paying the promised return, escape with the money and start a new life.

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